As filed with the Securities and Exchange Commission on February 28, 1997
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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OMNICOM GROUP INC.
(Exact name of registrant as specified in its charter)
New York 13-1514814
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
- --------------------------------------------------------------------------------
437 Madison Avenue
New York, New York 10022
(212) 415-3600
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
BARRY J. WAGNER, ESQ. Please send copies of all
Secretary communications and notices to:
Omnicom Group Inc. MICHAEL D. DITZIAN, ESQ.
437 Madison Avenue Davis & Gilbert
New York, New York l0022 1740 Broadway
(Name, address, including zip code, and New York, New York 10019
telephone number, including area code, (212) 468-4800
of agent for service)
Approximate date of commencement of proposed sale to public: From time to time
after the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective Registration Statement for the same offering [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act Registration Statement number of the Earlier effective Registration
Statement for the same offering [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================
Proposed Proposed
maximum maximum
Title of securities Amount to be offering price aggregate offering Amount of
to be registered registered per share(1) price(1) registration fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
41/4% Convertible Subordinated
Debentures due 2007.............. $218,500,000 100% $218,500,000 $66,212.13
- -------------------------------------------------------------------------------------------------------------------
Common Stock, $.50 par value....... 3,468,254(3) N/A N/A N/A
===================================================================================================================
</TABLE>
(1) Estimated solely for the purposes of calculating the registration fee.
(2) Pursuant to Rule 457(i) there is no filing fee with respect to the shares
of Common Stock issuable upon conversion of the Debentures because no
additional consideration will be received in connection with the exercise
of the conversion privilege.
(3) Plus such additional indeterminate number of shares as may become issuable
upon conversion of the Debentures being registered hereunder by means of
adjustment of the conversion price.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE>
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation, or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED FEBRUARY 28, 1997
PROSPECTUS
OMNICOM GROUP INC.
$218,500,000 Principal Amount of 4 1/4% Convertible
Subordinated Debentures due 2007
(Interest payable January 3 and July 3)
3,468,254 Shares of Common Stock
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This Prospectus relates to (i) $218,500,000 aggregate principal amount of 4
1/4% Convertible Subordinated Debentures due 2007 (the "Debentures") of Omnicom
Group Inc., a New York corporation ("Omnicom" or the "Company"), and (ii)
3,468,254 shares of common stock, par value $.50 per share (the "Common Stock"),
of the Company which are initially issuable upon conversion of the Debentures
plus such additional indeterminate number of shares of Common Stock as may
become issuable upon conversion of the Debentures as a result of adjustments to
the conversion price (the "Shares"). The Debentures and the Shares that are
being registered hereby are to be offered for the account of the holders thereof
(the "Selling Securityholders"). The Debentures were initially acquired from the
Company by Morgan Stanley & Co. Incorporated (the "Initial Purchaser") in
January 1997 in connection with a private offering. See "Description of the
Debentures."
The Debentures are convertible into Common Stock of the Company at any time
after April 3, 1997 and prior to maturity, unless previously redeemed or repaid,
at a conversion price of $63 per share, subject to adjustments in certain
events. Interest on the Debentures is payable on January 3 and July 3 of each
year commencing July 3, 1997 at a rate of 4 1/4% per annum of the principal
amount. The Debentures may be repaid at the option of the holder on January 3,
2003. On February 24, 1997, the closing price of the Common Stock as reported on
the New York Stock Exchange (the "NYSE") was $48.75 per share. The Common Stock
is traded under the symbol "OMC."
The Debentures do not provide for a sinking fund. The Debentures are
redeemable at the option of the Company, in whole or in part, at the redemption
prices set forth in this Prospectus, together with accrued interest, except that
no redemption may be made prior to December 29, 2000. Upon a Fundamental Change
(as defined herein), each holder of Debentures shall have the right, at the
holder's option, to require the Company to repay such holder's Debentures at the
repayment prices set forth in this Prospectus, subject to adjustments in certain
events, together with accrued interest. See "Description of Debentures --
Optional Redemption by the Company" and " -- Repayment at Option of Holders."
The Debentures are unsecured obligations of the Company and are
subordinated to all present and future Senior Indebtedness (as defined herein)
of the Company and will be effectively subordinated to all indebtedness and
liabilities of subsidiaries of the Company. The Indenture (as defined herein)
does not restrict the incurrence of any other indebtedness or liabilities by the
Company or its subsidiaries. See "Description of Debentures -- Subordination of
Debentures."
The Initial Purchaser has advised the Company that it intends to make a
market in the Debentures. The Initial Purchaser, however, is not obligated to do
so and any such market making may be discontinued at any time without notice, in
the sole discretion of the Initial Purchaser. The Company does not intend to
apply to list any of the Debentures on any securities exchange. No assurance can
be given that any market for the Debentures will develop or be maintained.
The Debentures and the Shares are being registered to permit public
secondary trading of the Debentures and, upon conversion, the underlying Common
Stock, by the holders thereof from time to time after the date of this
Prospectus. The Company has agreed among other things, to bear all expenses
(other than underwriting discounts and commissions and fees and expenses of
counsel and other advisors to the holders of the Debentures or the underlying
Common Stock) in connection with the registration and sale of the Debentures and
the underlying Common Stock covered by this Prospectus; provided, however, the
Company has not agreed to provide, or incur any expenses in connection with,
accountants' "cold comfort" letters, opinions of counsel, or to enter into
underwriting agreements, such as would be customary in an underwritten offering.
The Company will not receive any of the proceeds from sales of Debentures
or the Shares by the Selling Securityholders. The Debentures and the Shares may
be offered in negotiated transactions or otherwise at market prices prevailing
at the time of sale or at negotiated prices. See "Plan of Distribution." The
Selling Securityholders may be deemed to be "underwriters" as defined in the
Securities Act of 1933, as amended (the "Securities Act"). If any broker-dealers
are used by the Selling Securityholders, any commissions paid to broker-dealers
and, if broker-dealers purchase any Debentures or Shares as principals, any
profits received by such broker-dealers on the resale of the Debentures or
Shares may be deemed to be underwriting discounts or commissions under the
Securities Act. In addition, any profits realized by the Selling Securityholders
may be deemed to be underwriting commissions.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ___________, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
Available Information ..................................................... 3
Incorporation of Certain Documents by Reference ........................... 3
The Company ............................................................... 4
Use of Proceeds ........................................................... 4
Ratio of Earnings to Fixed Charges ........................................ 4
Description of Debentures ................................................. 4
General ............................................................... 5
Conversion of Debentures .............................................. 5
Optional Redemption by the Company .................................... 7
Repayment at Option of Holders ........................................ 8
Subordination of Debentures ........................................... 10
Form, Denomination and Registration ................................... 11
Events of Default and Remedies ........................................ 12
Modification of the Indenture ......................................... 13
Registration Rights of the Debentureholders ........................... 13
Information Concerning the Trustee .................................... 14
Description of Capital Stock .............................................. 14
Certain Federal Income Tax Considerations ................................. 14
Tax Consequences to United States Holders ............................. 15
Tax Consequences to United States Alien Holders ....................... 17
Selling Securityholders ................................................... 19
Plan of Distribution ...................................................... 20
Legal Matters ............................................................. 21
Experts ................................................................... 21
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<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act with
respect to the Debentures and the Shares offered hereby. This Prospectus does
not contain all the information set forth in the Registration Statement and the
exhibits and schedules thereto. For further information with respect to the
Company and the Debentures and the Shares offered hereby, reference is made to
the Registration Statement and to the exhibits and schedules filed therewith.
Statements contained in this Prospectus as to the contents of any contract or
other document are not necessarily complete and in each instance reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Copies of such reports, proxy statements, the Registration Statement
and exhibits thereto and other information may be inspected without charge at
the offices of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the regional offices of the Commission located at
7 World Trade Center, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661, and copies of such
documents may be obtained from the Public Reference Section of the Commission at
its Washington, D.C. or regional offices upon the payment of the fees prescribed
by the Commission. The Commission maintains a World Wide Web site on the
Internet at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission, including the Company. In addition, reports, proxy
statements and other information concerning the Company may be inspected and
copied at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
and are incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996;
(c) the Company's Report on Form 8-K dated January 3, 1997 and
relating to the issuance of certain of the Debentures pursuant to the
exemption provided by Regulation S under the Securities Act; and
(d) the Company's definitive Proxy Statement dated April 8, 1996 for
the annual meeting of shareholders held May 20, 1996.
All documents filed with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering being made hereby shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in any document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, upon
written or oral request of such person, a copy of any and all of the documents
that have been or may be incorporated by reference herein (other than exhibits
to such documents which are not specifically incorporated by reference into such
documents). Written or telephone requests for such copies should be directed to
Barry J. Wagner, Secretary, Omnicom Group Inc., 437 Madison Avenue, New York,
New York 10022; telephone number (212) 415-3600.
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<PAGE>
THE COMPANY
The Company, through its wholly and partially-owned companies (hereinafter
collectively referred to as the "Omnicom Group"), operates advertising agencies
which plan, create, produce and place advertising in various media such as
television, radio, newspaper and magazines. The Omnicom Group offers its clients
such additional services as marketing consultation, consumer market research,
design and production of merchandising and sales promotion programs and
materials, direct mail advertising, corporate identification, and public
relations. The Omnicom Group offers these services to clients worldwide on a
local, national, pan-regional or global basis. Operations cover the major
regions of North America, the United Kingdom, Continental Europe, the Middle
East, Africa, Latin America, the Far East and Australia. In 1995 and 1994, 53%
and 51%, respectively, of the Omnicom Group's billings came from its non-U.S.
operations.
According to the unaudited industry-wide figures published in 1996 in the
trade journal, Advertising Age, Omnicom was ranked as the second largest
advertising agency group worldwide.
The Omnicom Group operates as three separate, independent agency networks:
The BBDO Worldwide Network, the DDB Needham Worldwide Network and the TBWA
International Network. The Company also operates Goodby, Silverstein & Partners,
Inc. as an independent agency, and certain marketing service and specialty
advertising companies through its Diversified Agency Services division ("DAS").
In addition, a new division has been formed to manage the Omnicom Group's
minority interests in six interactive marketing agencies.
The principal executive offices of the Company are located at 437 Madison
Avenue, New York New York 10022. Its telephone number is (212) 415-3600.
USE OF PROCEEDS
The Company will not receive any of the proceeds from sales of the
Debentures or the Shares by the Selling Securityholders.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Company for the periods indicated:
Year Ended December 31, Nine Months Ended
---------------------------------- September 30,
1991 1992 1993 1994 1995 1996
----- ----- ----- ----- ------ -----------------
Ratio of earnings
to fixed charges..... 2.37 2.28 2.32 3.15 3.59 3.80
The ratio of earnings to fixed charges is computed by dividing fixed
charges into earnings before income taxes plus fixed charges. Fixed charges
consist of interest expense and that portion of net rental expense deemed
representative of the interest factor.
DESCRIPTION OF DEBENTURES
The Debentures were issued under an indenture, dated as of January 3,1997
(the "Indenture"), between the Company and The Chase Manhattan Bank, as trustee
(the "Trustee"). Copies of the Indenture and the Registration Rights Agreement
(as defined below) are available from the Trustee upon request by a registered
holder of the Debentures. The following summaries of certain provisions of the
Debentures, the Indenture and the Registration Rights Agreement do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to, all the provisions of the Debentures, the Indenture and the
Registration Rights Agreement, including the definitions therein of certain
terms which are not otherwise defined in this Prospectus. Wherever particular
provisions or defined terms of the Indenture (or of the Form of Debentures which
is a part thereof) or the Registration Rights Agreement are referred to, such
provisions or defined terms are incorporated herein by reference.
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General
The Debentures represent unsecured general obligations of the Company
subordinate in right of payment to certain other obligations of the Company as
described under "Subordination of Debentures" and convertible into Common Stock
as described under "Conversion of Debentures." The Debentures are limited to
$218,500,000 aggregate principal amount, are issuable only in denominations of
$1,000 or multiples thereof and unless redeemed, repaid or converted prior
thereto, will mature on January 3, 2007 at their principal amount.
The Indenture does not contain any restrictions on the payment of
dividends, the repurchase of securities of the Company or any financial
covenants.
Interest is payable semiannually on January 3 and July 3 at a rate of 4
1/4% per annum of the principal amount, commencing July 3, 1997, to holders of
record at the close of business on the preceding December 19 and June 18,
respectively. Interest on the Debentures will accrue at the rate per annum of 6%
from the original issue date to the repayment date or redemption date. The
Debentures will be treated for tax purposes as having been issued with original
issue discount. See "Certain Federal Income Tax Considerations."
Conversion of Debentures
The holders of Debentures will be entitled at any time on or after April 3,
1997 through the close of business on January 2, 2007, subject to prior
redemption or repayment, to convert any Debentures or portions thereof (in
denominations of $1,000 or multiples thereof) into Common Stock of the Company,
at the conversion price set forth on the cover page of this Prospectus, subject
to adjustment as described below. Except as described below, no payment or other
adjustment will be made on conversion of any Debentures for interest accrued
thereon or for dividends on any Common Stock issued upon such conversion. If any
Debentures not called for redemption are converted after a record date for the
payment of interest and prior to the next succeeding interest payment date, such
Debentures must be accompanied by funds equal to the interest payable on such
succeeding interest payment date on the principal amount so converted. Holders
who convert Debentures on or after December 26, 2000 but before January 3, 2001
in advance of the redemption of such Debentures on a redemption date occurring
on or after December 29, 2000 but on or before January 3, 2001, will receive, in
addition to the Common Stock otherwise payable upon such conversion, accrued
interest to January 3, 2001 on the principal amount of Debentures so converted.
The Company is not required to issue fractional shares of Common Stock upon
conversion of Debentures and, in lieu thereof, will pay a cash adjustment based
upon the market price of Common Stock on the close of business on the last
business day prior to the date of conversion. In the case of Debentures called
for redemption or submitted for payment, conversion rights will expire at the
close of business on the Business Day (as defined in the Indenture) immediately
preceding the redemption or repayment date, unless the Company defaults in
making the payment due upon redemption or repayment. A Debenture in respect of
which a holder is exercising its option to require repayment on January 3, 2003
or upon a Fundamental Change may be converted only if such holder withdraws its
election to exercise its option to require repayment in accordance with the
terms of the Indenture. The Company's delivery of the fixed number of shares of
Common Stock into which the Debentures are convertible will be deemed to satisfy
the Company's obligation to pay the principal amount of the Debentures and all
accrued interest and original issue discount that has not previously been (or is
not simultaneously being) paid. The Common Stock is treated as issued first in
payment of accrued interest and original issue discount and then in payment of
principal. Thus, accrued interest and original issue discount are treated as
paid rather than cancelled, extinguished or forfeited.
The initial conversion price of $63 per share of Common Stock is subject to
adjustment as set forth in the Indenture in certain events, including:
(i) the issuance of Common Stock of the Company as a dividend or
distribution on the Common Stock;
(ii) certain subdivisions and combinations of the Common Stock;
(iii) the issuance to all holders of Common Stock of certain rights or
warrants entitling them to subscribe for or purchase Common Stock at less
than the Current Market Price (as defined in the Indenture);
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(iv) the distribution to all holders of Common Stock of capital stock
(other than Common Stock) or evidences of indebtedness of the Company or of
assets (including securities, but excluding those rights, warrants,
dividends and distributions referred to above or paid in cash);
(v) distributions consisting of cash, excluding any quarterly cash
dividend on the Common Stock to the extent that the aggregate cash dividend
per share of Common Stock in any quarter does not exceed the greater of (x)
the amount per share of Common Stock of the next preceding quarterly cash
dividend on the Common Stock to the extent that such preceding quarterly
dividend did not require an adjustment of the conversion price pursuant to
this clause (v) (as adjusted to reflect subdivisions or combinations of the
Common Stock), and (y) 3.75 percent of the average of the last reported
sales price of the Common Stock during the ten trading days immediately
prior to the date of declaration of such dividend, and excluding any
dividend or distribution in connection with the liquidation, dissolution or
winding up of the Company. If an adjustment is required to be made as set
forth in this clause (v) as a result of a distribution that is a quarterly
dividend, such adjustment will be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to
be excluded pursuant to this clause (v). If an adjustment is required to be
made as set forth in this clause (v) as a result of a distribution that is
not a quarterly dividend, such adjustment would be based upon the full
amount of the distribution;
(vi) payment in respect of a tender offer or exchange offer by the
Company or any subsidiary of the Company for the Common Stock to the extent
that the cash and value of any other consideration included in such payment
per share of Common Stock exceeds the Current Market Price per share of
Common Stock on the trading day next succeeding the last date on which
tenders or exchanges may be made pursuant to such tender or exchange offer;
(vii) payment in respect of a tender offer or exchange offer by a
person other than the Company or any subsidiary of the Company in which, as
of the closing date of the offer, the Board of Directors is not
recommending rejection of the offer. The adjustment referred to in this
clause (vii) will only be made if the tender offer or exchange offer is for
an amount which increases the offeror's ownership of Common Stock to more
than 25% of the total shares of Common Stock outstanding, and if the cash
and value of any other consideration included in such payment per share of
Common Stock exceeds the Current Market Price per share of Common Stock on
the business day next succeeding the last date on which tenders or
exchanges may be made pursuant to such tender or exchange offer. The
adjustment referred to in this clause (vii) will generally not be made,
however, if, as of the closing of the offer, the offering documents with
respect to such offer disclose a plan or an intention to cause the Company
to engage in a consolidation or merger of the Company or a sale of all or
substantially all of the Company's assets; and
(viii) the issuance of Common Stock or securities convertible into, or
exchangeable for, Common Stock at a price per share (or having a conversion
or exchange price per share) that is less than the then Current Market
Price of the Common Stock (but excluding, among other things, issuances:
(a) pursuant to any bona fide plan for the benefit of employees, directors,
consultants or other individuals in connection with employee incentive
plans, of the Company now or hereafter in effect; (b) to acquire all or any
portion of a business in an arm' s-length transaction between the Company
and an unaffiliated third party including, if applicable, issuances upon
exercise of options or warrants assumed in connection with such an
acquisition; (c) in a bona fide public offering pursuant to a firm
commitment underwriting or sales at the market pursuant to a continuous
offering stock program; (d) pursuant to the exercise of warrants, rights
(including, without limitation, earnout rights) or options, or upon the
conversion of convertible securities, which are issued and outstanding on
the date hereof, or which may be issued in the future at fair value and
with an exercise price or conversion price at least equal to the Current
Market Price of the Common Stock at the time of issuance of such warrant,
right, option or convertible security; and (e) pursuant to a dividend
reinvestment plan or other plan hereafter adopted for the reinvestment of
dividends or interest provided that such Common Stock is issued at a price
at least equal to 95% of the market price of the Common Stock at the time
of such issuance).
In the case of (i) any reclassification of the Common Stock, or (ii) a
consolidation, merger or combination involving the Company or a sale or
conveyance to another corporation of the property and assets of the Company as
an entirety or substantially as an entirety, in each case as a result of which
holders of Common Stock shall be entitled to receive stock, other securities,
other property or assets (including cash) with respect to or in exchange for
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such Common Stock, the holders of the Debentures then outstanding will generally
be entitled thereafter to convert such Debentures into the kind and amount of
shares of stock, other securities or other property or assets which they would
have owned or been entitled to receive upon such reclassification,
consolidation, merger, combination, sale or conveyance had such Debentures been
converted into Common Stock immediately prior to such reclassification,
consolidation, merger, combination, sale or conveyance assuming that a holder of
Debentures would not have exercised any rights of election as to the stock,
other securities or other property or assets receivable in connection therewith.
In the event of a taxable distribution to holders of Common Stock or in
certain other circumstances requiring conversion price adjustments, the holders
of Debentures may, in certain circumstances, be deemed to have received a
distribution subject to United States income tax as a dividend; in certain other
circumstances, the absence of such an adjustment may result in a taxable
dividend to the holders of Common Stock. See "Certain Federal Income Tax
Considerations" below.
Before taking any action which would cause an adjustment decreasing the
conversion price below the then par value, if any, of the Common Stock, the
Company will take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully-paid
and non-assessable shares of Common Stock at the conversion price as so
adjusted.
The Company from time to time may to the extent permitted by law reduce the
conversion price by any amount for any period of at least 20 days, in which case
the Company shall give at least 15 days' notice of such reduction, if the Board
of Directors has made a determination that such reduction would be in the best
interests of the Company, which determination shall be conclusive. The Company
may, at its option, make such reductions in the conversion price, in addition to
those set forth above, as the Board of Directors deems advisable to avoid or
diminish any income tax to holders of Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes. See "Certain Federal Income Tax
Considerations."
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the conversion price then in
effect; provided that any adjustments which by reason of this provision are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. Except as stated above, the conversion price will not be
adjusted for the issuance of Common Stock or any securities convertible into or
exchangeable for Common Stock or carrying the right to purchase any of the
foregoing.
Optional Redemption by the Company
Except as provided below, the Debentures may not be redeemed prior to
December 29, 2000. The Debentures are not entitled to any sinking fund.
The Debentures will be redeemable at any time on or after December 29,
2000, on at least 30 but not more than 60 days' notice, at the option of the
Company, as a whole or in part, at the following prices (expressed as
percentages of the principal amount), together with accrued interest to and
including the date fixed for redemption, if redeemed during the three month
period beginning:
Date Percentage
---- ---------
January 3, 2001 108.324%
April 3, 2001 108.890%
July 3, 2001 109.448%
October 3, 2001 110.031%
January 3, 2002 110.607%
April 3, 2002 111.207%
July 3, 2002 111.801%
October 3, 2002 112.418%
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<PAGE>
and 100% if redeemed on or after January 3, 2003; provided that any semiannual
payment of interest becoming due on the date fixed for redemption shall be paid
to the holders of record on the relevant record date of the Debentures being
redeemed. If the date fixed for redemption is on or after December 29, 2000 but
before January 3, 2001, the redemption price shall be at 108.324% of the
principal amount with accrued interest to January 3, 2001.
If less than all of the outstanding Debentures are to be redeemed, the
Trustee shall select the Debentures to be redeemed in principal amounts of
$1,000 or 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 converts a portion of such
Debentures, such converted portion shall be deemed to be of the portion selected
for redemption. Debentures must be presented for redemption. If the Company
shall acquire any of the Debentures, such acquisition shall not operate as or be
deemed for any purpose to be a redemption or satisfaction of the indebtedness
represented by such Debentures unless and until the same are delivered to the
Trustee for cancellation.
Repayment at Option of Holders
Notwithstanding the Company's right of redemption, the holder of a
Debenture may elect to have that Debenture or portions thereof (in the principal
amount of $1,000 or any multiple thereof) repaid by the Company on January 3,
2003 (the "Holder Repayment Date"). Any such repayment shall be at a repayment
price of $112.418% of the principal amount thereof with accrued interest to the
Holder Repayment Date on the repaid Debentures. For a Debenture to be so repaid
at the option of the holder, the Company must receive at the office of one of
the Company's paying agents a notice (the "Holder Redemption Notice"), which is
not subsequently withdrawn, at any time from the opening of business on the date
that is 20 Business Days (as defined in the Indenture) prior to the Holder
Repayment Date until the close of business on the Business Day immediately
preceding the Holder Repayment Date.
Any Holder Repayment Notice may be withdrawn, in whole or in part, by the
holder by a written notice of withdrawal delivered to the paying agent prior to
the close of business on the Business Day immediately preceding the Holder
Repayment Date. All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Debenture for repayment shall be determined by
the Company, whose determination shall be final and binding.
Payment of the repayment price for a Debenture for which a Holder Repayment
Notice has been delivered and not withdrawn is conditioned upon book-entry
transfer or delivery of such Debenture (together with necessary endorsements) to
the paying agent at its office at 55 Water Street, Room 234, North Building, New
York, NY 10041, or any other office of the paying agent maintained for such
purpose, at any time (whether prior to, on or after the Holder Repayment Date)
after delivery of such Holder Repayment Notice. Payment of the repayment price
for such Debenture will be made promptly following the later of the Holder
Repayment Date or the time of book-entry transfer or delivery of such Debenture.
If the paying agent holds, in accordance with the terms of the Indenture, money
sufficient to pay the repayment price of such Debenture on the Holder Repayment
Date, then on and after such date, such Debenture will cease to be outstanding,
and interest on such Debenture shall cease to accrue, and all other rights of
the holder shall terminate (other than the right to receive the repayment price
at the time of book-entry transfer or delivery of the Debentures).
If a Fundamental Change (as defined below) occurs at any time while
Debentures are outstanding, each holder of Debentures shall have the right, at
such holder's option, to require the Company to repay such holder with respect
to all (and not less than all) such holder's Debentures on the date (the
"Fundamental Change Repayment Date ") that is the 45th day (or if such 45th day
is not a Business Day, the next succeeding Business Day) after the date of the
first publication of the Company's notice of such Fundamental Change. Such
repayment shall be made at the following prices (expressed as percentages of the
principal amount) in the event of a Fundamental Change occurring during the
three-month period beginning:
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Date Percentage
----- ----------
January 3, 1997 100.427%
April 3, 1997 100.875%
July 3, 1997 101.315%
October 3, 1997 101.777%
January 3, 1998 102.230%
April 3, 1998 102.705%
July 3, 1998 103.172%
October 3, 1998 103.661%
January 3, 1999 104.142%
April 3, 1999 104.646%
July 3, 1999 105.142%
October 3, 1999 105.660%
January 3, 2000 106.171%
April 3, 2000 106.705%
July 3, 2000 107.231%
and at a repayment price of 107.781% of the principal amount if a Fundamental
Change occurs on or after October 3, 2000 but before December 31, 2000, and
thereafter at the redemption price set forth under `'Optional Redemption by the
Company" which would be applicable to a redemption at the option of the Company;
provided in each case that if the Applicable Price (as defined below) is less
than the Reference Market Price (as defined below), the Company shall repay such
Debentures at a price equal to the foregoing repayment price multiplied by the
fraction obtained by dividing the Applicable Price by the Reference Market
Price. In each case, the Company shall also pay accrued interest, if any, on
such Debentures to the Fundamental Change Repayment Date; provided that, if such
Fundamental Change Repayment Date is January 3 or July 3, then the interest
payable on such date shall be paid to the holder of record of the Debentures on
the next preceding record date. The Company shall mail to all holders of record
of the Debentures a notice of the occurrence of a Fundamental Change and of the
repayment right arising as a result thereof on or before the tenth day after the
occurrence of such Fundamental Change. The Company shall promptly furnish the
Trustee a copy of such notice. For a Debenture to be repaid at the option of the
holder resulting from a Fundamental Change, the Company must receive at the
office of one of the Company's paying agents a notice (the "Fundamental Change
Repayment Notice"), which is not subsequently withdrawn, at any time from the
opening of business on the date that is on or before the 43rd day after the date
of the notice from the Company (or if such 43rd day is not a Business Day, the
immediately preceding Business Day).
Any Fundamental Change Repayment 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 Business Day immediately preceding the Fundamental Change
Repayment Date. The notice of withdrawal shall state the principal amount at
maturity and the certificate numbers of the Debentures as to which the
withdrawal notice relates. All questions as to the validity, eligibility
(including time of receipt) and acceptance of any Debentures for repayment shall
be determined by the Company, whose determination shall be final and binding.
Payment of the repayment price for a Debenture for which a Fundamental
Change Repayment Notice has been delivered and not withdrawn is conditioned upon
book-entry transfer or delivery of such Debenture (together with necessary
endorsements) to the paying agent at its office at 55 Water Street, Room 234,
North Building, New York, NY 10041, or any other office of the paying agent
maintained for such purpose, at any time (whether prior to, on or after the
Fundamental Change Repayment Date) after delivery of such Fundamental Change
Repayment Notice. Payment of the repayment price for such Debenture will be made
promptly following the later of the Fundamental Change Repayment Date or the
time of book-entry transfer or delivery of such Debenture. If the paying agent
holds, in accordance with the terms of the Indenture, money sufficient to pay
the repayment price of such Debenture on the Fundamental Change Repayment Date,
then on and after such date such Debenture will cease to be outstanding, and
interest on such Debenture shall cease to accrued, and all other rights of the
holder shall terminate (other than the right to receive the repayment price upon
the time of book-entry transfer or delivery of the Debentures).
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The term "Fundamental Change" means the occurrence of any transaction or
event in connection with which all or substantially all Common Stock shall be
exchanged for, converted into, acquired for or constitute the right to receive
consideration (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) which is not all or substantially all common stock listed (or, upon
consummation of or immediately following such transaction or event, which will
be listed) on a national securities exchange in the United States or approved
for quotation on the Nasdaq National Market or any similar system of automated
dissemination of quotations of securities prices in the United States. The term
"Applicable Price" means (i) in the event of a Fundamental Change in which the
holders of the Common Stock receive only cash, the amount of cash received by
the holder of one share of Common Stock and (ii) in the event of any other
Fundamental Change, the arithmetic average of the last reported sale price for
the Common Stock during the ten trading days immediately prior to the record
date for the determination of the holders of Common Stock entitled to receive
cash, securities, property or other assets in connection with such Fundamental
Change, or, if there is no such record date, the date upon which the holders of
the Common Stock shall have the right to receive such cash, securities, property
or other assets in connection with the Fundamental Change. The term "Reference
Market Price" shall initially mean $30.92 and in the event of any adjustment to
the conversion price, the Reference Market Price shall also be adjusted so that
the ratio of the Reference Market Price to the conversion price after giving
effect to any such adjustment shall always be the same as the ratio of $30.92 to
the conversion price specified on the cover page of this Prospectus (without
regard to adjustment thereto).
The Company will comply with the provisions, to the extent applicable, of
Rule 13e-4 and any other tender offer rules under the Exchange Act which may
then be applicable in connection with the repayment rights of Debentureholders
in the event of a Fundamental Change. The repayment rights of the holders of
Debentures could discourage a potential acquiror of the Company. The Fundamental
Change repayment feature, however, is not the result of management's knowledge
of any specific effort to obtain control of the Company by means of a merger,
tender offer, solicitation or otherwise, or part of a plan by management to
adopt a series of anti-takeover provisions.
Subordination of Debentures
The indebtedness evidenced by the Debentures is subordinate to the prior
payment in full of all Senior Indebtedness (as defined in the Indenture). During
the continuance beyond any applicable grace period of any default in the payment
of principal, premium, interest or any other payment due on any Senior
Indebtedness, no payment of principal of, or premium, if any, or interest on the
Debentures shall be made by the Company. In addition, upon any distribution of
assets of the Company upon any dissolution, winding up, liquidation or
reorganization, the payment of the principal of, or premium, if any, and
interest on the Debentures is to be subordinated to the extent provided in the
Indenture in right of payment to the prior payment in full of all Senior
Indebtedness. By reason of such subordination provisions, in the event of the
Company's dissolution, holders of Senior Indebtedness may receive more, ratably,
and holders of the Debentures may receive less, ratably, than the other
creditors of the Company. Such subordination will not prevent the occurrence of
any Event of Default under the Indenture.
The term "Senior Indebtedness" means the principal of, premium, if any,
interest on, and any other payment due pursuant to any of the following: whether
outstanding on the date of the Indenture or thereafter incurred or created:
(a) all indebtedness of the Company for money borrowed (including any
indebtedness secured by a mortgage or other lien which is (i) given to
secure all or part of the purchase price of property subject thereto,
whether given to the vendor of such property or to another, or (ii)
existing on property at the time of acquisition thereof);
(b) all indebtedness of the Company evidenced by notes, debentures,
bonds or other securities sold by the Company for money;
(c) all lease obligations of the Company which are capitalized on the
books of the Company in accordance with generally accepted accounting
principles;
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(d) all indebtedness of others of the kinds described in either of the
preceding clauses (a) or (b) or all lease obligations of others of the kind
described in the preceding clause (c) assumed by or guaranteed in any
manner by the Company or in effect guaranteed by the Company through an
agreement to purchase, contingent or otherwise; and
(e) all renewals, extensions or refundings of indebtedness of the
kinds described in any of the preceding clauses (a), (b) or (d) and all
renewals or extensions of leases of the kinds described in either of the
preceding clauses (c) or (d);
unless, in the case of any particular indebtedness, lease, renewal, extension or
refunding, the instrument or lease creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such indebtedness,
lease, renewal, extension or refunding is not superior in right of payment to,
or is pari passu with, the Debentures. Notwithstanding the foregoing, Senior
Indebtedness shall not include any indebtedness or lease obligation of any kind
of the Company to any subsidiary of the Company, a majority of the voting stock
of which is owned by the Company.
As of September 30, 1996, the Company had $489,282,000 of Senior
Indebtedness outstanding. The amount of Senior Indebtedness may change in the
future. The Indenture contains no limitations on the incurrence of Senior
Indebtedness.
Form, Denomination and Registration
The Debentures are issued in fully registered form in denominations of
$1,000 principal amount and multiples thereof.
Global Debenture, Book-Entry Form. Debentures are issuable in fully
registered form without coupons, in denominations of $1,000 principal amount and
multiples thereof. Debentures sold by the Selling Securityholders pursuant to
the Registration Statement of which this Prospectus forms a part will be
represented by a global Debenture (the "Global Debenture"), except as set forth
below under "Certificated Debentures." The Global Debenture will be deposited
with, or on behalf of, The Depository Trust Company, New York, New York ("DTC")
and registered in the name of Cede & Co. ("Cede") as DTC's nominee. Beneficial
interests in the Global Debenture will be exchangeable for definitive
Certificated Debentures only in accordance with the terms of the Indenture.
Purchasers of the Debentures offered hereby may hold their interests in the
Global Debenture directly through DTC or indirectly through organizations which
are participants in DTC (the "Participants"). Transfers between Participants
will be effected in the ordinary way in accordance with DTC rules and will be
settled in clearing house funds.
Persons who are not Participants may beneficially own interests in the
Global Debenture held by DTC only through Participants, or certain banks,
brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"). So long as Cede, as the nominee of DTC, is
the registered owner of the Global Debenture, Cede for all purposes will be
considered the sole holder of the Global Debenture. Except as provided below,
owners of beneficial interests in the Global Debenture will not be entitled to
have certificates registered in their names, will not receive or be entitled to
receive physical delivery of certificates in definitive form, and will not be
considered the holders thereof.
Payment of interest on and the redemption price of the Global Debenture
will be made to Cede, the nominee for DTC, as the registered owner of the Global
Debenture by wire transfer of immediately available funds on each interest
payment date or the redemption or repayment date, as the case may be. Neither
the Company, the Trustee nor any paying agent will 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 Debenture or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company has been informed by DTC that, with respect to any payment of
interest on, or the redemption or repayment price of, the Global Debenture,
DTC's practice is to credit Participants' accounts on the payment date therefor
with payments in amounts proportionate to their respective beneficial interests
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in the principal amount represented by the Global Debenture as shown on the
records of DTC, unless DTC has reason to believe that it will not receive
payment on such payment date. Payments by Participants to owners of beneficial
interests in the principal amount represented by the Global Debenture held
through such Participants will be the responsibility of such Participants, as is
now the case with securities held for the accounts of customers registered in
"street name."
Holders who elect to have their Debentures repaid or to convert their
Debentures into Common Stock should contact their brokers or other Participants
or Indirect Participants to obtain information on procedures, including proper
forms and cut-off times, for submitting such request.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having a beneficial interest in the principal amount represented by the Global
Debenture to pledge such interest to persons or entitles that do not participate
in the DTC system, or otherwise take actions in respect of such interest may be
affected by the lack of a physical certificate evidencing such interest.
Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under the Indenture) will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations. DTC has advised the Company that it will take any action permitted
to be taken by a holder of Debentures (including, without limitation, the
presentation of Debentures for exchange as described below), only at the
direction of one or more Participants to whose account with DTC interests in the
Global Debenture are credited, and only in respect of the principal amount of
the Debentures represented by the Global Debenture as to which such Participant
or Participants has or have given such direction.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance and settlement
of securities transactions between Participants through electronic book-entry
changes to the accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may include
certain other organizations such as the Initial Purchaser. Certain of such
Participants (or their representatives), together with other entities, own DTC.
Indirect access to the DTC system is available to others such as banks, brokers,
dealers and trust companies that clear through, or maintain a custodial
relationship with, a Participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Debenture among Participants, it is under
no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days, the Company will cause Debentures to be issued in
definitive form in exchange for the Global Debenture.
Certificated Debentures. Holders of Debentures registered hereunder may
take physical delivery of the Debentures in definitive registered form. In
addition, Holders may request that certificated Debentures be issued in exchange
for Debentures represented by the Global Debenture. Furthermore, certificated
Debentures may be issued in exchange for Debentures represented by the Global
Debenture, if no successor depositary is appointed by the Company as set forth
above under "Global Debenture, Book-Entry Form."
Events of Default and Remedies
An Event of Default is defined in the Indenture as being: default in
payment of the principal of or premium, if any, on any of the Debentures
(including any repayment of Debentures as provided under "Repayment at Option of
the Holders" above); default for 30 days in payment of any installment of
interest on the Debentures; default by the Company for 45 days after notice in
the observance or performance of any other covenant in the Indenture; or certain
events involving bankruptcy, insolvency or reorganization of the Company. The
Indenture provides that the Trustee may withhold notice to the holders of the
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Debentures of any default (except in payment of principal of, or premium, if
any, or interest on the Debentures) if the Trustee considers it in the interests
of the holders of the Debentures to do so.
The Indenture provides that if an Event of Default shall have occurred and
be continuing, the Trustee or the holders of not less than 25% in principal
amount of the Debentures then outstanding may declare the principal of all the
Debentures to be due and payable immediately, but if the Company shall cure all
defaults (except the nonpayment of interest and premium, if any, on and
principal of any Debentures which shall have become due by acceleration) and
certain other conditions are met, such declaration may be annulled and past
defaults may be waived by the holders of a majority of the principal amount of
the Debentures then outstanding.
The holders of a majority in principal amount of the Debentures then
outstanding shall have the right to direct the time, method and place of
conducting any proceedings for any remedy available to the Trustee, subject to
certain limitations specified in the Indenture.
Modification of the Indenture
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than 66-2/3% in principal amount of
the Debentures at the time outstanding, to modify the Indenture or any
supplemental indenture or the rights of the holders of the Debentures, except
that no such modification shall (i) extend the fixed maturity of any Debenture,
reduce the rate or extend the time for payment of interest thereon, reduce the
principal amount thereof or premium, if any, thereon, reduce any amount payable
upon redemption thereof, change the obligation of the Company to make repayment
of any Debenture as described under "Repayment at Option of Holders" above,
impair or affect the right of a holder to institute suit for the payment
thereof, change the currency in which the Debentures are payable or impair the
right to convert the Debentures into Common Stock subject to the terms set forth
in the Indenture, without the consent of each holder of a Debenture so affected,
or (ii) reduce the aforesaid percentage of Debentures whose holders are required
to consent to any such modification, without the consent of the holders of all
of the Debentures then outstanding.
Registration Rights of the Debentureholders
Pursuant to the terms of the Registration Rights Agreement dated as of
January 3, 1997 between the Company and the Initial Purchaser (the "Registration
Rights Agreement"), the Company has filed with the Commission a shelf
registration statement, of which this Prospectus forms a part, covering resales
by holders of the Debentures and the Common Stock issuable upon conversion of
the Debentures. The Company has agreed to use reasonable efforts to keep the
registration statement effective until the earlier of (i) the sale pursuant to
the shelf registration statement of all the securities registered thereunder and
(ii) the expiration of the holding period applicable to such securities under
Rule 144(k) under the Securities Act, or any successor provision. The
Registration Rights Agreement provides that the Company may suspend the use of
this Prospectus for a period not to exceed 30 days in any three-month period, or
not to exceed an aggregate of 60 days in any 12-month period under certain
circumstances relating to pending corporate developments, public filings with
the Commission and similar events. The Company has agreed to pay predetermined
liquidated damages to those holders of Debentures and those holders of Common
Stock issued upon conversion of the Debentures who have requested to sell
pursuant to the registration statement if the Prospectus is unavailable for
periods in excess of those permitted above. The Company has further agreed, if
such unavailability continues for an additional thirty-day period, to pay
predetermined liquidated damages to all holders of Debentures and all holders of
Common Stock issued upon conversion of the Debentures, whether or not such
holder has requested to sell pursuant to the Registration Statement. The
Registration Rights Agreement provides for Selling Securityholders to (i) be
named as a Selling Securityholder in a supplement to this Prospectus and (ii)
deliver this Prospectus together with the relevant Prospectus Supplement to
purchasers, and further provides for Selling Securityholders to be bound by
those provisions of the Registration Rights Agreement which are applicable to
the Selling Securityholders (including indemnification provisions). The Company
has agreed to pay all expenses of the Registration Statement, provide to each
Selling Securityholder copies of this Prospectus and the relevant Prospectus
Supplement, notify each Selling Securityholder when the Registration Statement
has become effective and take certain other actions as are required to permit,
subject to the foregoing, unrestricted resales of the Debentures or Common
Stock.
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Information Concerning the Trustee
The Chase Manhattan Bank, the Trustee under the Indenture, has been
appointed by the Company as paying agent, conversion agent, registrar and
custodian with regard to the Debentures.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 150,000,000 shares of
$0.50 par value Common Stock, of which 80,428,571 shares were outstanding on
December 31, 1996, and 7,500,000 shares of $1.00 par value Preferred Stock, none
of which is outstanding.
Each share of Common Stock entitles the holder thereof to one vote on all
matters submitted to a vote of shareholders. All shares of Common Stock have
equal rights and are entitled to such dividends as may be declared by the Board
of Directors out of funds legally available therefor and to share ratably upon
liquidation in the assets available for distribution to stockholders. The
Company is not aware of any restrictions on its present or future ability to pay
dividends. However, in connection with certain borrowing facilities entered into
by the Company and its subsidiaries, the Company is subject to certain
restrictions on the ratio of net cash flow to consolidated indebtedness, the
ratio of total consolidated indebtedness to total consolidated capitalization
and on its ability to make investments in and loans to affiliates and
unconsolidated subsidiaries. The Common Stock is not subject to call or
assessment, has no preemptive conversion or cumulative voting rights and is not
subject to redemption. The Company's shareholders elect a classified board of
directors, and may not remove a director except by an affirmative two-thirds
vote of all outstanding shares. A two-thirds vote is also required for the
Company's shareholders to amend the Company's by-laws or certain provisions of
its charter documents, and to change the number of directors comprising the full
board.
The Company may issue Preferred Stock in series having whatever rights and
preferences the Board of Directors may determine. One or more series of
Preferred Stock may be made convertible into Common Stock at rates determined by
the Board of Directors, and Preferred Stock may be given priority over the
Common Stock in payment of dividends, rights on liquidation, voting and other
rights. The Company has no current plans to issue any Preferred Stock. Preferred
Stock may be issued from time to time upon authorization of the Company Board of
Directors without action of the shareholders.
The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholders Services L.L.C., 450 West 33rd Street, 15th Floor, New York, NY
10001.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Kevin R. Conzelmann, Tax Counsel to the Company, the
following summary accurately describes the principal United States federal
income tax consequences of ownership and disposition of the Debentures. This
summary is based on the Internal Revenue Code of 1986, as amended to the date
hereof (the "Code"), administrative pronouncements, judicial decisions and
existing and proposed Treasury Regulations, changes to any of which subsequent
to the date of this Prospectus may affect the tax consequences described herein
(possibly on a retroactive basis). This summary discusses only Debentures held
as capital assets within the meaning of Section 1221 of the Code. It does not
discuss all of the tax consequences that may be relevant in light of a holder's
particular circumstances or to holders subject to special rules, such as certain
financial institutions, insurance companies, dealers in securities and
tax-exempt organizations or persons holding Debentures as a hedge or as part of
a straddle. Persons considering the purchase of Debentures should consult their
tax advisors with regard to the application of the United States federal income
tax laws to their particular situations as well as any tax consequences arising
under the laws of any state, local or foreign taxing jurisdiction.
As used herein, the term "United States Holder" means an owner of a
Debenture that is (i) for United States federal income tax purposes a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof, or (iii) an estate or trust the income of which
is subject to United States federal income taxation regardless of its source.
The term also includes certain former citizens of the United States.
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As used herein, the term "United States Alien Holder" means an owner of a
Debenture that is, for United States federal income tax purposes, (i) a
nonresident alien individual, (ii) a foreign corporation, (iii) a nonresident
alien fiduciary of a foreign estate or trust or (iv) a foreign partnership one
or more of the members of which is, for United States federal income tax
purposes, a nonresident alien individual, a foreign corporation or a nonresident
alien fiduciary of a foreign estate or trust.
Tax Consequences to United States Holders
Qualified Stated Interest
Interest on the Debentures is fixed through January 3, 2007 at a 41/4%
rate. Such interest constitutes "qualified stated interest" which will be
taxable to a holder as ordinary interest income at the time it accrues or is
received in accordance with the holder's method of accounting for federal income
tax purposes. The original issue discount ("OID") rules which are applicable to
the Debentures are described under "Original Issue Discount" below.
Original Issue Discount
In general, subject to a de minimis rule, a debt obligation that is issued
for an amount less than its stated redemption price at maturity will be
considered to have been issued with OID for federal income tax purposes.
The "issue price" of a Debenture will equal the first price to the public
(not including bond houses, brokers or similar persons acting as underwriters,
placement agents or wholesalers) at which a substantial amount of the Debentures
is sold for cash. Under the applicable regulations, the "stated redemption
price" at maturity of a Debenture will equal 112.418% of the principal amount,
the price at which a holder may put the Debenture back to the Company on January
3, 2003, and the maturity date of the Debenture will be deemed to be January 3,
2003.
The Company expects that the OID with respect to the Debentures will exceed
the amount determined under the de minimis rule, because the difference between
the Debenture's stated redemption price at maturity and its issue price will
exceed the de minimis amount.
A holder of a Debenture will be required to include OID in income for
federal income tax purposes as it accrues for the period from issuance to
January 3, 2003, in accordance with a constant yield method based on a
compounding of interest whether or not he exercises the put option. Under this
method, a holder generally will be required to include in income increasingly
greater amounts of OID in successive accrual periods.
If the put option is not exercised, the Debenture will be treated as if the
Debenture were reissued (solely for purposes of the OID rules) on January 3,
2003 for an amount equal to the Debenture's adjusted issue price on that date. A
holder will not recognize gain or loss by reason of such deemed reissuance.
The Company will furnish annually to the IRS and to holders of the
Debentures information regarding qualified stated interest and OID as required
under applicable Treasury regulations.
Conversion of Debentures into Common Stock
In general, no gain or loss will be recognized for federal income tax
purposes on a conversion of the Debentures into shares of Common Stock. However,
a holder who did not acquire the Debentures at a "market discount" as described
below will recognize a capital gain or loss, as the case may be, equal to the
difference, if any, between cash paid in lieu of a fractional share and the
portion of the adjusted basis of the Debenture allocable to such fractional
share.
A holder's basis in the Common Stock received upon conversion will be the
same as such holder's basis in such Debenture at the time of conversion,
excluding the basis allocated to any fractional share as described above.
However, the holding period of a fractional interest in each full share of
Common Stock will commence on the day of conversion. Although there is no
authority precisely on point, the Company believes that the fractional interest
in each full share of Common Stock that will have such a holding period in the
hands of a holder will be equal to the ratio determined by dividing (x) the sum
of any unpaid accrued interest and the amount of original issue discount accrued
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on or after the date on which the holder acquired the Debenture by (y) the fair
market value of the Common Stock on the date of conversion. The remainder of the
interest in each full share of Common Stock will have a holding period
commencing on the day after the date on which the holder acquired the Debenture.
The conversion price of the Debentures is subject to adjustment under
certain circumstances. Holders of the Debentures may be deemed to receive a
dividend to the extent of the Company's current or accumulated earnings and
profits if the conversion price is adjusted to reflect a taxable distribution of
property to holders of Common Stock or in certain other circumstances requiring
conversion price adjustments. Such deemed dividend would be includible in gross
income although the holder would not receive any cash.
Sale, Exchange or Retirement of the Debentures
Upon the sale, exchange or retirement of a Debenture, a holder will
recognize taxable gain or loss equal to the difference between the amount
realized and such holder's adjusted tax basis in the Debenture. For these
purposes, the amount realized does not include any amount attributable to
accrued qualified stated interest on the Debenture. A holder's adjusted tax
basis in a Debenture will equal the cost of the Debenture to such holder,
increased by the amount of any market discount and OID previously included in
income by the holder with respect to such Debenture and reduced by any amortized
bond premium.
Gain or loss realized on the sale, exchange or retirement of a Debenture
will be capital gain or loss (except to the extent of any accrued market
discount not previously included in the holder's taxable income), and will be
long-term capital gain or loss if the Debenture has been held for more than one
year.
Market Discount
If a holder purchases a Debenture for an amount that is less than its
"revised issue price" the amount of the difference will be treated as "market
discount" for federal income tax purposes, unless such difference is less than a
specified de minimis amount. The "revised issue price" of a Debenture is the sum
of the issue price of the Debenture and the aggregate amount of original issue
discount includible in gross income of all previous holders without regard to
the rules for amortization of acquisition premium.
Under the market discount rules of the Code, a holder will be required to
treat any gain on the sale, exchange, retirement or other disposition of, a
Debenture as ordinary income to the extent of the market discount which has not
previously been included in income (pursuant to an election by the holder to
include such market discount in income as it accrues) and is treated as having
accrued on such Debenture at such time. If such Debenture is disposed of in a
nontaxable transaction other than as provided in Code Sections 1276(c) and (d)
(e.g. by gift) accrued market discount will be includible as ordinary income to
the holder as if such holder had sold the Debenture at its then fair market
value. If a holder converts such Debenture into Common Stock of the Company, the
amount of accrued market discount on the date of conversion will be treated as
accrued market discount on such Common Stock, and any gain subsequently
recognized by such holder on disposition of the Common Stock will be treated as
ordinary interest income up to the amount of accrued market discount on the date
of conversion.
The market discount rules also provide that a holder of any Debenture who
acquired it at a market discount may be required to defer the deduction of a
portion of the interest on any indebtedness incurred or maintained to purchase
or carry the Debenture until market discount is recognizable upon a disposition
of the Debenture. Such a deferral is not required, however, if the holder elects
to include accrued market discount in income currently.
Acquisition Premium
A holder who purchases a Debenture for an amount that is greater than its
revised issue price but less than its stated redemption price at maturity (as
defined above) will be considered to have purchased such Debenture at an
"acquisition premium". Under the acquisition premium rules of the Code, the
amount of original issue discount which such holder must include in its gross
income with respect to such Debenture for any taxable year will be reduced by
the portion of such acquisition premium properly allocable to such year.
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Amortizable Bond Premium
Under proposed Treasury Regulations, a holder will be considered to have
purchased a Debenture with "amortizable bond premium" if, after subtracting the
portion of its purchase price attributable to the Debenture's conversion
feature, the remainder is greater than the redemption price on the October 3,
2002 call date (112.418% of the principal amount of the Debenture). In such
event, the holder may elect to amortize such premium in accordance with
applicable Code provisions and regulations; such holders are urged to consult
their tax advisors as to the application of the rules governing calculation of
the amortization. A holder who elects to amortize bond premium must reduce his
tax basis in the Debenture by the amount of the premium amortized in any year.
An election to amortize bond premium applies to all taxable debt obligations
then owned and thereafter acquired by the taxpayer and may be revoked only with
the consent of the Internal Revenue Service.
Backup Withholding and Information Reporting
Certain noncorporate holders may be subject to backup withholding at a rate
of 31% on payments of principal, premium and interest (including OID if any) on,
and the proceeds of disposition of, a Debenture. Backup withholding will apply
only if the holder (i) fails to furnish its Taxpayer Identification Number
("TIN") which, for an individual, would be the individual's Social Security
number, (ii) furnishes an incorrect TIN, (iii) is notified by the Internal
Revenue Service that it has failed to report properly payments of interest and
dividends or (iv) under certain circumstances, fails to certify, under penalty
of perjury, that it has furnished a correct TIN and has not been notified by the
Internal Revenue Service that it is subject to backup withholding for failure to
report interest and dividend payments. Holders should consult their tax advisors
regarding their qualification for exemption from backup withholding and the
procedure for obtaining such an exemption if applicable.
The amount of any backup withholding from a payment to a holder will be
allowed as a credit against such holder's United States federal income tax
liability and may entitle such holder to a refund, provided that the required
information is furnished to the Internal Revenue Service.
Tax Consequences to United States Alien Holders
Underpresent United States federal law, and subject to the discussion below
concerning backup withholding:
(a) payments of principal, interest (including OID) and premium on the
Debentures by the Company or any paying agent to any United States Alien
Holder will not be subject to United States federal withholding tax,
provided that, in the case of interest (including OID), (i) such holder
does not own, actually or constructively, 10% or more of the total combined
voting power of all classes of stock of the Company entitled to vote, is
not a controlled foreign corporation related, directly or indirectly, to
the Company through stock ownership, and is not a bank receiving interest
described in Section 881(c)(3)(A) of the Code and (ii) the statement
requirement set forth in Section 871(h) or Section 881(c) of the Code has
been satisfied with respect to the beneficial owner, as discussed below;
(b) a United States Alien Holder of a Debenture or Common Stock will
not be subject to United States federal income tax on gain realized on the
sale, exchange or other disposition of such Debenture, unless (i) such
holder is an individual who is present in the United States for 183 days or
more in the taxable year of disposition, and either (a) such individual has
a "tax home" (as defined in Code Section 911(d)(3)) in the United States
(unless such gain is attributable to a fixed place of business in a foreign
country maintained by such individual and has been subject to foreign tax
of at least 10%) or (b) the gain is attributable to an office or other
fixed place of business maintained by such individual in the United States
or (ii) such gain is effectively connected with the conduct by such holder
of a trade or business in the United States.
(c) Dividends paid on shares of Common Stock held by a United States
Alien Holder will be subject to withholding tax at a rate of 30% or such
lower rate as may be provided by an applicable tax treaty, but will not be
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subject to any additional information reporting or backup withholding
provided that such dividends are paid to an address outside of the United
States. However, if the dividends are effectively connected with the
conduct of a trade or business in the United States by the United States
Alien Holder, such dividends will instead be subject to regular United
States federal income tax and will be exempt from the 30% withholding tax.
(d) Under Section 2105(b) of the United States federal estate tax law,
a Debenture held by an individual who is not (i) a citizen, (ii) a former
citizen who is treated as a citizen for tax purposes, or (iii) a resident
of the United States at the time of his death will not be subject to United
States federal estate tax as a result of such individual's death, provided
that the individual does not own, actually or constructively, 10% or more
of the total combined voting power of all classes of stock of the Company
entitled to vote and, at the time of such individual's death, payments with
respect to such Debenture would not have been effectively connected to the
conduct by such individual of a trade or business in the United States.
(e) Shares of Common Stock held by an individual at the time of his
death (or theretofore transferred subject to certain retained rights or
powers) will be subject to United States federal estate tax unless
otherwise provided by an applicable tax treaty.
Sections 871(h) and 881(c) of the Code require that, in order to qualify
for the portfolio interest exemption from withholding tax described in paragraph
(a) above, either the beneficial owner of the Debenture, or a securities
clearing organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution") and that is holding the Debenture on behalf of such beneficial
owner, file a statement with the withholding agent to the effect that the
beneficial owner of the Debenture is not a United States Holder. Under temporary
United States Treasury Regulations, such requirement will be fulfilled if the
beneficial owner of a Debenture certifies on Internal Revenue Service Form W-8,
under penalties of perjury, that it is not a United States Holder and provides
its name and address, and any Financial Institution holding the Debenture on
behalf of the beneficial owner files a statement with the withholding agent to
the effect that it has received such a statement from the holder (and furnishes
the withholding agent with a copy thereof).
If a United States Alien Holder of a Debenture is engaged in a trade or
business in the United States, and if interest (including OID) on the Debenture
is effectively connected with the conduct of such trade or business, the United
States Alien Holder, although exempt from the withholding tax discussed in the
preceding paragraph, will generally be subject to regular United States income
tax on interest (including any OID or market discount) and on any gain realized
on the sale, exchange or other disposition of a Debenture in the same manner as
if it were a United States Holder. See "Tax Consequences to United States
Holders" above. In lieu of the certificate described in the preceding paragraph,
such a holder will be required to provide to the Company a properly executed
Internal Revenue Service Form 4224 in order to claim an exemption from
withholding tax. In addition, if such United States Alien Holder is a foreign
corporation, it may be subject to a branch profits tax equal to 30% (or such
lower rate provided by an applicable treaty) of its effectively connected
earnings and profits for the taxable year, subject to certain adjustments. For
purposes of the branch profits tax, interest (including OID or market discount)
on and any gain recognized on the sale, exchange or other disposition of a
Debenture will be included in the effectively connected earnings and profits of
such United States Alien Holder if such interest or gain, as the case may be, is
effectively connected with the conduct by the United States Alien Holder of a
trade or business in the United States.
Backup Withholding and Information Reporting
Under current Treasury Regulations, backup withholding at a rate of 31%
will not apply to payments of principal, premium or interest made outside the
United States by the Company or any paying agent thereof on a Debenture if the
certifications required by Sections 871(h) and 881(c) are received, provided
that the Company or such paying agent, as the case may be, does not have actual
knowledge that the payee is a United States person.
Under current Treasury Regulations, payments on the sale, exchange or other
disposition of a Debenture made to or through a foreign office of a broker
generally will not be subject to backup withholding. However, if such broker is
a United States person, a controlled foreign corporation for United States tax
purposes or a foreign person 50% or more of whose gross income is effectively
connected with a United States trade or business for a specified three-year
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period, information reporting will be required unless the broker has in its
records documentary evidence that the beneficial owner is not a United States
person and certain other conditions are met or the beneficial owner otherwise
establishes an exemption. Under proposed Treasury Regulations, backup
withholding may apply to any payment which such broker is required to report if
such broker has actual knowledge that the payee is a United States person.
Payments to or through the United States office of a broker will be subject to
backup withholding and information reporting unless the holder certifies, under
penalties of perjury, that it is not a United States person or otherwise
establishes an exemption.
United States Alien Holders of Debentures should consult their tax advisors
regarding the application of information reporting and backup withholding in
their particular situations, the availability of an exemption therefrom, and the
procedure for obtaining such an exemption, if available. Any amounts withheld
from a payment to a United States Alien Holder under the backup withholding
rules will be allowed as a credit against such Holder's United States federal
income tax liability and may entitle such holder to a refund, provided that the
required information is furnished to the IRS.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
DEBENTURES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS AND THE POSSIBLE EFFECT INCLUDING POSSIBLE RETROACTIVE EFFECT OF
CHANGES IN UNITED STATES FEDERAL OR OTHER TAX LAWS.
ON APRIL 15, 1996, THE INTERNAL REVENUE SERVICE PROPOSED REGULATIONS (THE
"PROPOSED REGULATIONS") THAT COULD AFFECT THE PROCEDURES TO BE FOLLOWED BY A
UNITED STATES ALIEN HOLDER IN ESTABLISHING SUCH UNITED STATES ALIEN HOLDER'S
STATUS FOR PURPOSES OF INFORMATION REPORTING, BACKUP WITHHOLDING, AND CLAIMING A
REDUCTION IN WITHHOLDING BASED ON AN INCOME TAX TREATY. THE PROPOSED REGULATIONS
WOULD GENERALLY BE EFFECTIVE FOR PAYMENTS MADE AFTER DECEMBER 31, 1997. UNITED
STATES ALIEN HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE EFFECT, IF
ANY, OF THE PROPOSED REGULATIONS ON THEIR PURCHASE, OWNERSHIP, AND DISPOSITION
OF THE DEBENTURES.
SELLING SECURITYHOLDERS
The Debentures were originally acquired on January 3, 1997 from the Company
by the Initial Purchaser. The Initial Purchaser advised the Company that the
Initial Purchaser has resold the Debentures in transactions exempt from the
registration requirements of the Securities Act to "qualified institutional
buyers" (as defined in Rule 144A of the Securities Act), certain institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3), or (7) under the
Securities Act) and outside the United States to non-U.S. persons in offshore
transactions in reliance on Regulation S under the Securities Act. These
subsequent purchasers, or their transferees, pledgees, donees or successors, may
from time to time offer and sell any or all of the Debentures and/or Shares
pursuant to this Prospectus.
The Debentures and the Shares are being registered pursuant to the
Registration Rights Agreement which provides that the Company file a
registration statement with regard to the Debentures and the Shares within 90
days of the date of original issuance of the Debentures and keep such
registration statement effective until the earlier of (i) the sale pursuant to
the registration statement of all the securities registered thereunder and (ii)
the expiration of the holding period applicable to such securities under Rule
144(k) under the Securities Act or any successor provision. Although none of the
Selling Securityholders has advised the Company that it currently intends to
sell all or any of the Debentures or Shares pursuant to this Prospectus, the
Selling Securityholders may choose to sell the Debentures and/or Shares from
time to time upon notice to the Company. See "Plan of Distribution."
Prior to any use of this Prospectus in connection with an offering of the
Debentures and/or Shares, this Prospectus will be supplemented to set forth the
name and number of shares beneficially owned by the Selling Securityholder
intending to sell such Debentures and/or Shares and the number of Debentures
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and/or Shares to be offered. The Prospectus Supplement will also disclose
whether any Selling Securityholder selling in connection with such Prospectus
Supplement has held any position or office with, been employed by or otherwise
has had a material relationship with, the Company or any of its affiliates
during the three years prior to the date of the Prospectus Supplement.
PLAN OF DISTRIBUTION
The Debentures and the Shares are being registered to permit public
secondary trading of such securities by the holders thereof from time to time
after the date of this Prospectus. The Company has agreed, among other things,
to bear all expenses (other than underwriting discounts and selling commissions
and fees and expenses of counsel and other advisors to holders of the Debentures
and the underlying Common Stock) in connection with the registration and sale of
the Debentures and the Shares covered by this Prospectus; provided, however, the
Company has not agreed to provide, or incur any expenses in connection with,
accountants' "cold comfort" letters, opinions of counsel, or to enter into
underwriting agreements, such as would be customary in an underwritten offering.
The Company will not receive any of the proceeds from the offering of
Debentures and the Shares by the Selling Securityholders. The Selling
Securityholders may sell all or a portion of the Debentures and Shares
beneficially owned by them and offered hereby from time to time in one or more
transactions on any exchange on which the securities are listed at then
prevailing market prices. The Selling Securityholders may also make private
sales directly or through a broker or brokers on terms to be determined at the
time of such sales.
The outstanding Common Stock is publicly traded on the New York Stock
Exchange. The Initial Purchaser has advised the Company that it is making and
currently intends to continue making a market in the Debentures; however, it is
not obligated to do so and any such market-making may be discontinued at any
time without notice in the sole discretion of the Initial Purchaser. The Company
does not intend to apply to list any of the Debentures on any securities
exchange. Accordingly, no assurance can be given as to the liquidity of, or
trading markets for, the Debentures.
In order to comply with the securities laws of certain states, if
applicable, the Debentures and Shares will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states the Debentures and Shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption from
the registration or qualification requirement is available and is complied with.
The Selling Securityholders and any broker-dealers or agents that
participate with the Selling Securityholders in the distribution of the
Debentures or the Shares may be deemed to be "underwriters" within the meaning
of the Securities Act, in which event any commissions received by such
broker-dealers or agents and any profits realized by the Selling Securityholders
on the resales of the Debentures or the Shares purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act.
In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144, Rule 144A or any other available exemption from
registration under the Securities Act may be sold under Rule 144, Rule 144A or
such other available exemption rather than pursuant to this Prospectus. There is
no assurance that any Selling Securityholder will sell any or all of the
Debentures or Shares described herein, and any Selling Securityholder may
transfer, devise or gift such securities by other means not described herein.
The Debentures were originally sold by the Company to the Initial Purchaser
on January 3, 1997 in a private placement, to persons reasonably believed by
such Initial Purchaser to be "qualified institutional buyers" (as defined in
Rule 144A of the Securities Act), to institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) or outside
the United States to non-U.S. persons in offshore transactions in reliance on
Regulation S under the Securities Act. In connection with the private placement,
the Debentures were designated for trading in the Private Offerings, Resales and
Trading through Automated Linkages ("PORTAL") Market. The Company agreed to
indemnify and hold the Initial Purchaser harmless against certain liabilities
under the Securities Act that could arise in connection with the sale of the
Debentures by the Initial Purchaser. The Registration Rights Agreement provides
for the Company and the Selling Securityholders to indemnify each other against
certain liabilities arising under the Securities Act.
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The Company has agreed to use its best efforts to cause the Registration
Statement to which this Prospectus relates to become effective as promptly as is
practicable and to keep the Registration Statement effective until the earlier
of (i) the sale pursuant to the Registration Statement of all the securities
registered thereunder and (ii) the expiration of the holding, period applicable
to such securities under Rule 144(k) under the Securities Act or any successor
provision. The Registration Rights Agreement provides that the Company may
suspend the use of this Prospectus in connection with sales of Debentures and
Shares by holders for a period not to exceed 30 days in any three-month period,
or not to exceed an aggregate of 60 days in any 12-month period, under certain
circumstances relating to pending corporate developments, public filings with
the Commission and similar events. Expenses of preparing and filing the
Registration Statement and all post-effective amendments will be borne by the
Company.
LEGAL MATTERS
The validity of the Debentures and the underlying Common Stock will be
passed upon for the Company by Davis & Gilbert, New York, New York. Members of
Davis & Gilbert participating in such matters own an aggregate of 2,660 shares
of Common Stock of the Company.
Kevin R. Conzelmann, Tax Counsel to the Company, is passing on the federal
income tax considerations relevant to the purchase, ownership and disposition of
the Debentures as set forth under the caption "Certain Federal Income Tax
Considerations". Mr. Conzelmann is an employee of the Company, owns an aggregate
of 806.99 shares of Common Stock of the Company, and holds an additional 7,200
shares of Common Stock under restricted stock awards.
EXPERTS
The consolidated financial statements and schedule of the Company and its
subsidiaries contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 incorporated by reference in this Registration Statement
have been audited by Arthur Andersen LLP, independent public accountants (whose
opinion, insofar as it relates to the financial statements of Chiat/Day
Holdings, Inc. and Ross Roy Communications, Inc. prior to 1995, is based solely
upon the respective reports of Coopers & Lybrand LLP and Deloitte & Touche LLP,
other independent public accountants) to the extent and for the periods
indicated in their report.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses payable by the Registrant in connection with the
distribution of the securities being registered are as follows:
SEC Registration Fee $66,212
Legal Fees And Expenses $25,000*
Miscellaneous Expenses $ 5,788*
-------
Total............................................. $97,000*
=======
- ----------
* Estimated
Item 15. Indemnification of Directors and Officers
The Registrant's Certificate of Incorporation contains a provision limiting
the liability of directors (except for approving statutorily prohibited
dividends, share repurchases or redemptions, distributions of assets on
dissolution or loans to directors) to acts or omissions in bad faith, involving
intentional misconduct or a knowing violation of the law, or resulting in
personal gain to which the director was not legally entitled. The Registrant's
By-Laws provide that an officer or director will be indemnified against any
costs or liabilities, including attorneys fees and amounts paid in settlement
with the consent of the registrant in connection with any claim, action or
proceeding to the fullest extent permitted by the New York Business Corporation
Law.
Section 722(a) of the New York Business Corporation Law provides that a
corporation may indemnify any officer or director, made or threatened to be
made, a party to an action other than one by or in the right of the corporation,
including an action by or on the right of any other corporation or other
enterprise, which any director or officer of the corporation served in any
capacity at the request of the corporation, because he was a director or officer
of the corporation, or served such other corporation or other enterprise in any
capacity, against judgments, fines, amounts paid in settlement and reasonable
expenses, including attorneys' fees actually and necessarily incurred as a
result of such action, or any appeal therein, if such director or officer acted,
in good faith, for a purpose which he reasonably believed to be in, or in the
case of service for any other corporation or other enterprise, not opposed to,
the best interests of the corporation and, in criminal actions, in addition, had
no reasonable cause to believe that his conduct was unlawful.
Section 722(c) of the New York Business Corporation Law provides that a
corporation may indemnify any officer or director made, or threatened to be
made, a party to an action by or in the right of the corporation by reason of
the fact that he is or was a director of the corporation, or is or was serving
at the request of the corporation as a director or officer of any other
corporation of any type or kind, or other enterprise, against amounts paid in
settlement and reasonable expenses, including attorneys' fees actually and
necessarily incurred by him in connection with the defense or settlement of such
action, or in connection with an appeal therein, if such director or officer
acted, in good faith, for a purpose which he reasonably believed to be in, or,
in the case of service for another corporation or other enterprise, not opposed
to, the best interests of the corporation. The corporation may not, however,
indemnify any officer or director pursuant to Section 722(c) in respect of (1) a
threatened action, or a pending action which is settled or otherwise disposed
of, or (2) any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation, unless and only to the extent that the
court in which the action was brought or, if no action was brought, any court of
competent jurisdiction, determines in its discretion, that the person is fairly
and reasonably entitled to indemnity for such portion of the settlement and
expenses as the court deems proper.
Section 723 of the New York Business Corporation Law provides that an
officer or director who has been successful on the merits or otherwise in the
defense of a civil or criminal action of the character set forth in Section 722
is entitled to indemnification as permitted in such section. Section 724 of the
New York Business Corporation Law permits a court to award the indemnification
required by Section 722.
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The Company has entered into agreements with its directors to indemnify
them for liabilities or costs arising out of any alleged or actual breach of
duty, neglect, errors or omissions while serving as a director. The Company also
maintains and pays premiums for directors' and officers' liability insurance
policies.
Item 16. Exhibits and Financial Statement Schedules
4.2 Indenture dated as of January 3, 1997 between the Company
and The Chase Manhattan Bank, as trustee
4.3 Form of Debentures (included in Exhibit 4.2)
4.4 Registration Rights Agreement dated as of January 3, 1997
between the Company and Morgan Stanley & Co. Incorporated
5.1 Opinion of Davis & Gilbert
8.1 Opinion of Kevin Conzelmann
12.1 Statement re: calculation of ratio of earnings to fixed charges
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Coopers & Lybrand LLP
23.3 Consent of Arthur Andersen LLP
23.4 Consent of Davis & Gilbert (included in Exhibit 5.1)
24.1 Power of Attorney (included on Signature Page)
25.1 Statement of Eligibility of the Trustee on Form T-1
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424 (b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement; and
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(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement.
Provided, however, That paragraphs (l)(i) and (l)(ii) of this section shall
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended that are incorporated
by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, as amended, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) For purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934, as amended (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934, as amended) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York on February 28, 1997.
OMNICOM GROUP INC.
Registrant
By: /s/ JOHN D. WREN
----------------------
John D. Wren
Chief Executive Officer
----------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints John D. Wren and Barry J. Wagner, and each of
them, his true and lawful attorney-in-fact and agent, with full and several
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as
they or he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
II-4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
following capacities.
Signature Title Date
/s/ JOHN D. WREN Chief Executive Officer February 28, 1997
- --------------------------- and Director (Principal
John D. Wren Executive Officer)
/s/ FRED J. MEYER Chief Financial Officer February 28, 1997
- --------------------------- (Principal Financial Officer)
Fred J. Meyer
/s/ JONATHAN E. RAMSDEN Controller
- --------------------------- (Principal Accounting Officer)
Jonathan E. Ramsden
/s/ BERNARD BROCHAND Director February 28, 1997
- ---------------------------
Bernard Brochand
Director
- ---------------------------
Robert J. Callander
/s/ JAMES A. CANNON Director February 28, 1997
- ---------------------------
James A. Cannon
Director
- ---------------------------
Leonard S. Coleman, Jr.
/s/ BRUCE CRAWFORD Director February 28, 1997
- ---------------------------
Bruce Crawford
/s/ PETER I. JONES Director February 28, 1997
- ---------------------------
Peter I. Jones
/s/ JOHN R. MURPHY Director February 28, 1997
- ---------------------------
John R. Murphy
/s/ JOHN R. PURCELL Director February 28, 1997
- ---------------------------
John R. Purcell
/s/ KEITH L. REINHARD Director February 28, 1997
- ---------------------------
Keith L. Reinhard
/s/ Allen Rosenshine Director February 28, 1997
- ---------------------------
Allen Rosenshine
Director
- ---------------------------
Gary L. Roubos
Director
- ---------------------------
Quentin I. Smith, Jr.
Director
- ---------------------------
Robin B. Smith
/s/ WILLIAM G. TRAGOS Director February 28, 1997
- ---------------------------
William G. Tragos
/s/ EGON P. S. ZEHNDER Director February 28, 1997
- ---------------------------
Egon P. S. Zehnder
II-5
Exhibit 4.2
================================================================================
OMNICOM GROUP INC.
TO
THE CHASE MANHATTAN BANK
Trustee
------------
INDENTURE
Dated as of January 3, 1997
------------
4 1/4% Convertible Subordinated Debentures due 2007
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.................................................... 2
Affiliate................................................ 2
Applicable Price......................................... 2
Board of Directors....................................... 2
Business Day............................................. 2
Closing Price............................................ 3
Commission............................................... 3
Common Stock............................................. 3
Company.................................................. 3
Company Notice........................................... 3
Conversion Price......................................... 3
Custodian................................................ 3
Debenture or Debentures.................................. 3
Debentureholder or holder................................ 3
default.................................................. 4
Defaulted Interest....................................... 4
Depositary............................................... 4
Event of Default......................................... 4
Fundamental Change....................................... 4
Fundamental Change Repayment Date........................ 4
Fundamental Change Repayment Notice...................... 4
Fundamental Change Repayment Price....................... 4
Holder Repayment Date.................................... 4
Holder Repayment Notice.................................. 5
Holder Repayment Price................................... 5
Indenture................................................ 5
Initial Purchaser........................................ 5
Officers' Certificate.................................... 5
Opinion of Counsel....................................... 5
outstanding.............................................. 5
Person................................................... 6
PORTAL Market............................................ 6
Predecessor Debenture.................................... 6
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Page
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QIB...................................................... 6
Reference Market Price................................... 6
Register................................................. 6
Registration Rights Agreement............................ 7
Regulation S............................................. 7
Responsible Officer...................................... 7
Restricted Securities.................................... 7
Rule 144A................................................ 7
Securities Act........................................... 7
Senior Indebtedness...................................... 7
Subsidiary............................................... 8
Trading Day.............................................. 8
Trust Indenture Act...................................... 8
Trustee.................................................. 8
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
Section 2.1 Designation Amount and Issue of Debentures.................... 9
Section 2.2 Form of Debentures............................................ 9
Section 2.3 Date and Denomination of Debentures; Payments of Interest..... 10
Section 2.4 Execution of Debentures....................................... 11
Section 2.5 Exchange and Registration of Transfer of Debentures:
Restrictions on Transfer; Depositary.......................... 12
Section 2.6 Mutilated, Destroyed, Lost or Stolen Debentures............... 20
Section 2.7 Temporary Debentures.......................................... 21
Section 2.8 Cancellation of Debentures Paid, Etc.......................... 22
ARTICLE III
REDEMPTION AND REPAYMENT OF DEBENTURES
Section 3.1 Redemption Prices............................................. 22
Section 3.2 Notice of Redemption; Selection of Debentures................. 23
Section 3.3 Payment of Debentures Called for Redemption................... 24
Section 3.4 Conversion Arrangement on Call for Redemption................. 25
Section 3.5 Repayment at Option of Holders................................ 26
ii
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Page
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Section 3.6 Repayment at Option of Holders Upon a Fundamental Change...... 28
Section 3.7 Effect of Holder Repayment Notice or Fundamental Change
Repayment Notice and Withdrawal of Such Notices............... 32
Section 3.8 Covenant to Comply with Securities Laws upon
Purchase of Debentures........................................ 33
Section 3.9 No Sinking Fund............................................... 33
ARTICLE IV
SUBORDINATION OF DEBENTURES
Section 4.1 Agreement of Subordination.................................... 33
Section 4.2 Payments to Debentureholders.................................. 33
Section 4.3 Subrogation of Debentures..................................... 35
Section 4.4 Authorization by Debentureholders............................. 36
Section 4.5 Notice to Trustee............................................. 36
Section 4.6 Trustee's Relation to Senior Indebtedness..................... 37
Section 4.7 No Impairment of Subordination................................ 38
Section 4.8 Certain Conversions Deemed Payment............................ 38
Section 4.9 Senior Indebtedness Entitled to Rely.......................... 38
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1 Payment of Principal, Premium and Interest.................... 38
Section 5.2 Offices for Notices and Payments.............................. 39
Section 5.3 Appointments to Fill Vacancies in Trustee's Office............ 39
Section 5.4 Provisions as to Paying Agent................................. 40
Section 5.5 Corporate Existence........................................... 41
Section 5.6 Rule 144A Information Requirement............................. 41
Section 5.7 Stay, Extension and Usury Laws................................ 41
iii
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Page
----
ARTICLE VI
DEBENTUREHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 6.1 Debentureholders' Lists....................................... 42
Section 6.2 Preservation and Disclosure of Lists.......................... 42
Section 6.3 Reports by Trustee............................................ 42
Section 6.4 Reports by Company............................................ 43
ARTICLE VII
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
IN THE EVENT OF DEFAULT
Section 7.1 Events of Default............................................. 43
Section 7.2 Payment of Debentures on Default; Suit Therefor............... 45
Section 7.3 Application of Monies Collected by Trustee.................... 47
Section 7.4 Proceedings by Debentureholder................................ 48
Section 7.5 Proceedings by Trustee........................................ 49
Section 7.6 Remedies Cumulative and Continuing............................ 49
Section 7.7 Direction of Proceedings and Waiver of Defaults by
Majority of Debentureholders.................................. 49
Section 7.8 Notice of Defaults............................................ 50
Section 7.9 Undertaking to Pay Costs...................................... 50
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties and Responsibilities of Trustee........................ 51
Section 8.2 Reliance on Documents, Opinions, Etc.......................... 52
Section 8.3 No Responsibility for Recitals, Etc........................... 53
Section 8.4 Trustee, Paying Agents, Conversion Agents or Registrar
May Own Debentures............................................ 53
Section 8.5 Monies to Be Held in Trust.................................... 53
Section 8.6 Compensation and Expenses of Trustee.......................... 54
Section 8.7 Officers' Certificate and Opinion of Counsel as Evidence..... 54
Section 8.8 Conflicting Interests of Trustee.............................. 55
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Page
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Section 8.9 Eligibility of Trustee........................................ 55
Section 8.10 Resignation or Removal of Trustee............................. 55
Section 8.11 Acceptance by Successor Trustee............................... 56
Section 8.12 Succession by Merger, Etc..................................... 57
Section 8.13 Limitation on Rights of Trustee as Creditor................... 57
ARTICLE IX
CONCERNING THE DEBENTUREHOLDERS
Section 9.1 Action by Debentureholders.................................... 58
Section 9.2 Proof of Execution by Debentureholders........................ 58
Section 9.3 Who Are Deemed Absolute Owners................................ 58
Section 9.4 Company-Owned Debentures Disregarded.......................... 59
Section 9.5 Revocation of Consents; Future Holders Bound.................. 59
ARTICLE X
DEBENTUREHOLDERS' MEETINGS
Section 10.1 Purposes of Meetings.......................................... 60
Section 10.2 Call of Meetings by Trustee................................... 60
Section 10.3 Call of Meetings by Company or Debentureholders............... 60
Section 10.4 Qualifications for Voting..................................... 61
Section 10.5 Regulations................................................... 61
Section 10.6 Voting........................................................ 62
Section 10.7 No Delay of Rights by Meeting................................. 62
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1 Supplemental Indentures Without Consent of Debentureholders... 62
Section 11.2 Supplemental Indentures with Consent of Debentureholders...... 64
Section 11.3 Effect of Supplemental Indenture.............................. 65
Section 11.4 Notation on Debentures........................................ 65
Section 11.5 Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee............................................. 65
v
<PAGE>
Page
----
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1 Company May Consolidate Etc. on Certain Terms................. 65
Section 12.2 Successor Corporation to Be Substituted....................... 66
Section 12.3 Opinion of Counsel to Be Given Trustee........................ 67
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1 Discharge of Indenture........................................ 67
Section 13.2 Deposited Monies to Be Held in Trust by Trustee............... 68
Section 13.3 Paying Agent to Repay Monies Held............................. 68
Section 13.4 Return of Unclaimed Monies.................................... 68
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 14.1 Indenture and Debentures Solely Corporate Obligations......... 68
ARTICLE XV
CONVERSION OF DEBENTURES
Section 15.1 Right to Convert.............................................. 69
Section 15.2 Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion; No Adjustment for Interest or Dividends........... 69
Section 15.3 Payments in Lieu of Fractional Shares......................... 71
Section 15.4 Conversion Price.............................................. 72
Section 15.5 Adjustment of Conversion Price................................ 72
Section 15.6 Effect of Reclassification, Consolidation, Merger or Sale..... 79
Section 15.7 Taxes on Shares Issued........................................ 80
vi
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Page
----
Section 15.8 Reservation of Shares; Shares to Be Fully Paid; Compliance
with Governmental Requirements; Listing of Common Stock....... 80
Section 15.9 Responsibility of Trustee..................................... 81
Section 15.10 Notice to Holders Prior to Certain Actions.................... 82
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 Provisions Binding on Company's Successors.................... 82
Section 16.2 Official Acts by Successor Corporation........................ 83
Section 16.3 Addresses for Notices, Etc.................................... 83
Section 16.4 Governing Law................................................. 83
Section 16.5 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee....................................... 83
Section 16.6 Statements Required in Certificate or Opinion................. 83
Section 16.7 Legal Holidays................................................ 84
Section 16.8 No Security Interest Created.................................. 84
Section 16.9 Benefits of Indenture......................................... 84
Section 16.10 Table of Contents, Headings, Etc.............................. 84
Section 16.11 Authenticating Agent.......................................... 84
Section 16.12 Execution in Counterparts..................................... 85
vii
<PAGE>
INDENTURE dated as of January 3, 1997, between Omnicom Group Inc., a New
York corporation (hereinafter sometimes called the "Company", as more fully set
forth in Section 1.1), and The Chase Manhattan Bank, duly organized and existing
under the laws of the State of New York, as trustee hereunder (hereinafter
sometimes called the "Trustee", as more fully set forth in Section 1.1).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issue of its 4 1/4% Convertible Subordinated Debentures due 2007
(hereinafter sometimes called the "Debentures"), in an aggregate principal
amount not to exceed $218,500,000) and, to provide the terms and conditions upon
which the Debentures are to be authenticated, issued and delivered, the Company
has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to be borne by
the Debentures, a form of assignment, a form of option to elect repayment on
January 3, 2003, a form of option to elect repayment upon a Fundamental Change,
a form of conversion notice and a certificate of transfer to be borne by the
Debentures are to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Debentures have in
all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Debentures
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Debentures by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the
Debentures (except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The terms defined in this Section 1.1 (except as
herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture that are defined in the Trust Indenture Act or
which are by reference therein defined in the Securities Act (except as herein
otherwise
1
<PAGE>
expressly provided or unless the context otherwise requires) shall have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this Indenture. The
words "herein," "hereof," "hereunder," and words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.
Affiliate: The term "Affiliate" of any specified Person shall mean any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any specified Person means the
power to direct or cause the direction of the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling' and
"controlled" have meanings correlative to the foregoing.
Applicable Price: The term "Applicable Price" means (i) in the event of a
Fundamental Change in which the holders of the Common Stock receive cash, the
amount of cash received by the holder of one share of Common Stock and (ii) in
the event of any other Fundamental Change, the arithmetic average of the Closing
Price for the Common Stock during the ten Trading Days immediately prior to the
record date for the determination of the holders of Common Stock entitled to
receive cash, securities, property or other assets in connection with such
Fundamental Change, or, if there is no such record date, the date upon which the
holders of the Common Stock shall have the right to receive cash, securities,
property or other assets in connection with the Fundamental Change.
Board of Directors: The term "Board of Directors" shall mean the Board of
Directors of the Company or a committee of such Board duly authorized to act for
it hereunder.
Business Day: The term "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in The City of New York are authorized or obligated by law or executive order to
close or be closed.
Closing Price: The term "Closing Price" shall have the meaning specified in
Section 15.5(h)(1).
Commission: The term "Commission" shall mean the Securities and Exchange
Commission.
Common Stock: The term "Common Stock" shall mean any stock of any class of
the Company which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which is not subject to redemption by the Company.
Subject to the provisions of Section 15.6, however, shares issuable on
conversion of Debentures shall include only shares of the class designated as
common stock of the Company at the date of this Indenture or shares of any class
or classes
2
<PAGE>
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the Company; provided that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable shall be substantially in the proportion to which the
total number of shares of such class resulting from all such reclassifications
bears to the total number of shares of all such classes resulting from all such
reclassifications.
Company: The term "Company" shall mean Omnicom Group Inc., a New York
corporation, and subject to the provisions of Article XII, shall include its
successors and assigns.
Company Notice: The term "Company Notice" shall have the meaning specified
in Section 3.6(b) .
Conversion Price: The term "Conversion Price" shall have the meaning
specified in Section 15.4.
Custodian: The term "Custodian" shall mean The Chase Manhattan Bank, as
custodian with respect to the Debentures in global form, or any successor entity
thereto.
Debenture or Debentures: The terms "Debenture" or "Debentures" shall mean
any Debenture or Debentures, as the case may be, authenticated and delivered
under this Indenture, including the 144A Global Debenture and the Regulation S
Global Debenture.
Debentureholder or holder: The terms "Debentureholder" or "holder" as
applied to any Debenture, or other similar terms (but excluding the term
"beneficial holder"), shall mean any Person in whose name at the time a
particular Debenture is registered on the Debenture registrar's books.
default: The term "default" shall mean any event that is, or after notice
or passage of time, or both, would be, an Event of Default.
Defaulted Interest: The term "Defaulted Interest" has the meaning ascribed
to it in Section 2.3.
Depositary: The term "Depositary" means, with respect to the Debentures
issuable or issued in whole or in part in global form, the Person specified in
Section 2.5(d) as the Depositary with respect to the Debentures, until a
successor shall have been appointed and become such pursuant to the applicable
provisions of this Indenture, and thereafter, "Depositary" shall mean or include
such successor.
Event of Default: The term "Event of Default" shall mean any event
specified in Section 7.1(a), (b), (c), (d) or (e).
3
<PAGE>
Exchange Act: The term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder,
as in effect from time to time.
Fundamental Change: The term "Fundamental Change" means the occurrence of
any transaction or event in connection with which all or substantially all the
Common Stock shall be exchanged for, converted into, acquired for or constitute
the right to receive consideration (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which is not all or substantially all common
stock listed (or, upon consummation of or immediately following such transaction
or event, which will be listed) on a national securities exchange in the United
States or approved for quotation in the Nasdaq National Market or any similar
system of automated dissemination of quotations of securities prices in the
United States.
Fundamental Change Repayment Date: The term "Fundamental Change Repayment
Date" has the meaning ascribed to it in Section 3.6(a).
Fundamental Change Repayment Notice: The term "Fundamental Change Repayment
Notice" has the meaning ascribed to it in Section 3.6(c).
Fundamental Change Repayment Price: The term "Fundamental Change Repayment
Price" has the meaning ascribed to it in Section 3.6(b).
Holder Repayment Date: The term "Holder Repayment Date" shall mean January
3, 2003.
Holder Repayment Notice: The term "Holder Repayment Notice" has the meaning
ascribed to it in Section 3.5(a).
Holder Repayment Price: The term "Holder Repayment Price" has the meaning
ascribed to it in Section 3.5(a)
Indenture: The term "Indenture" shall mean this instrument as originally
executed or, if amended or supplemented as herein provided, as so amended or
supplemented.
Initial Purchaser: The term "Initial Purchaser" means Morgan Stanley & Co.
Incorporated.
Officers' Certificate: The term "Officers' Certificate", when used with
respect to the Company, shall mean a certificate signed by the President, the
Chief Executive Officer or the Chief Financial Officer and by the Treasurer or
the Secretary of the Company that meets the requirement of Sections 16.5 and
16.6.
4
<PAGE>
Opinion of Counsel: The term "Opinion of Counsel" shall mean an opinion in
writing signed by legal counsel, who may be an employee of or counsel to the
Company, or other counsel acceptable to the Trustee which opinion meets the
requirements of Sections 16.5 and 16.6.
outstanding: The term "outstanding," (except as otherwise provided in
Section 8.10) when used with reference to Debentures, shall, subject to the
provisions of Section 9.4, mean, as of any particular time, all Debentures
authenticated and delivered by the Trustee under this Indenture, except
(a) Debentures theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Debentures, or portions thereof, (i) for the payment or redemption
of which monies in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Company) or (ii)
which shall have been set aside and segregated in trust by the Company (if
the Company shall act as its own paying agent), provided that if such
Debentures are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article III provided, or provision
satisfactory to the Trustee shall have been made for giving such notice;
(c) Debentures paid or Debentures in lieu of or in substitution for
which other Debentures shall have been authenticated and delivered pursuant
to the terms of Section 2.6 unless proof satisfactory to the Trustee is
presented that any such Debentures are held by bona fide holders in due
course; and
(d) Debentures converted into Common Stock pursuant to Article XV and
Debentures deemed not outstanding pursuant to Article III.
Person: The term "Person" shall mean a corporation, an association, a
partnership, an individual, a joint venture, a joint stock company, a trust, an
unincorporated organization or a government or an agency or a political
subdivision thereof.
PORTAL Market: The term "PORTAL Market" shall mean the Private Offerings,
Resales and Trading through Automated Linkages Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
Predecessor Debenture: The term "Predecessor Debenture" of any particular
Debenture shall mean every previous Debenture evidencing all or a portion of the
same debt as that evidenced by such particular Debenture; and, for the purposes
of this definition, any Debenture authenticated and delivered under Section 2.6
in lieu of a lost, destroyed or stolen Debenture shall be deemed to evidence the
same debt as the lost, destroyed or stolen Debenture that it replaces.
5
<PAGE>
Principal Office of the Trustee: The term "principal office of the
Trustee", or other similar term, shall mean the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which office is, at the date as of which this Indenture is dated,
located at 450 West 33rd Street, 15th Floor, New York, New York 10001- 2697.
QIB: The term "QIB" shall mean a "qualified institutional buyer" as defined
in Rule 144A.
Reference Market Price: The term "Reference Market Price" shall initially
mean $30.92 and, in the event of any adjustment to the Conversion Price pursuant
to Sections 15.5(a), (b), (c), (d), (e), (f) or (g), the Reference Market Price
shall also be adjusted so that the ratio of the Reference Market Price to the
Conversion Price after giving effect to any such adjustment shall always be the
same as the ratio of $30.92 to the initial Conversion Price specified in the
form of Debenture attached hereto (without regard to any adjustment thereto).
Register: The term "Register" shall have the meaning specified in Section
2.5(2).
Registration Rights Agreement: The term "Registration Rights Agreement"
means that certain Registration Rights Agreement, dated as of January 3, 1997,
between the Company and the Initial Purchaser.
Regulation S: The term "Regulation S" shall mean Regulation S promulgated
under the Securities Act.
Responsible Officer: The term "Responsible Officer," when used with respect
to the Trustee, shall mean any officer assigned by the Trustee to administer
this Indenture and also shall mean, with respect to a particular trust matter
any other officers to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
Restricted Securities: The term "Restricted Securities" has the meaning
specified in Section 2.5(d).
Rule 144A: The term "Rule 144A" shall mean Rule 144A promulgated under the
Securities Act.
Securities Act: The term "Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
Senior Indebtedness: The term "Senior Indebtedness" shall mean the
principal of, premium, if any, interest on, and any other payment due pursuant
to any of the following, whether outstanding at the date hereof or hereafter
incurred or created:
6
<PAGE>
(a) all indebtedness of the Company for money borrowed (including any
indebtedness secured by a conditional sales contract, mortgage or other
lien which is (i) given to secure all or part of the purchase price of
property subject thereto, whether given to the vendor of such property or
to another or (ii) existing on property at the time of acquisition
thereof);
(b) all indebtedness of the Company evidenced by notes, debentures,
bonds or other securities sold by the Company for money;
(c) all lease obligations of the Company which are capitalized on the
books of the Company in accordance with generally accepted accounting
principles;
(d) all indebtedness of others of the kinds described in either of the
preceding clause (a) or (b) and all lease obligations of others of the kind
described in the preceding clause (c) assumed by or guaranteed in any
manner by the Company or in effect guaranteed by the Company through an
agreement to purchase, contingent or otherwise; and
(e) all renewals, extensions or refundings of indebtedness of the
kinds described in any of the preceding clauses (a), (b) and (d) and all
renewals or extensions of lease obligations of the kinds described in
either of the preceding clauses (c) and (d);
unless, in the case of any particular indebtedness, lease, renewal, extension or
refunding, the instrument or lease creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such indebtedness,
lease, renewal, extension or refunding is not superior in right of payment to,
or is pari passu with, the Debentures.
Subsidiary: The term "Subsidiary" means, with respect to any Person, (i)
any corporation, association or other business entity of which more than 50% of
the total voting power of shares of capital stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (a) the sole general
partner or managing general partner of which is such Person or a subsidiary of
such Person or (b) the only general partners of which are such Person or of one
or more subsidiaries of such Person (or any combination thereof).
Trading Day: The term "Trading Day" shall have the meaning specified in
Section 15.5(h)(5).
Trust Indenture Act: The term "Trust Indenture Act" shall mean the Trust
Indenture Act of 1939, as amended, as it was in force at the date of execution
of this Indenture, except as provided in Sections 11.3 and 15.6; provided,
however, that in the event the Trust Indenture Act
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of 1939 is amended after the date hereof, the term "Trust Indenture Act" shall
mean, to the extent required by such amendment, the Trust Indenture Act of 1939
as so amended.
Trustee: The term "Trustee" shall mean The Chase Manhattan Bank and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee at
the time serving as successor trustee hereunder.
The definitions of certain other terms are as specified in Sections 2.5 and
3.5 and Article XV.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
Section 2.1 Designation Amount and Issue of Debentures. The Debentures
shall be designated as "4 1/4% Convertible Subordinated Debentures due 2007."
Debentures not to exceed the aggregate principal amount of $190,000,000 (or
$218,500,000 if the Initial Purchaser notifies the Trustee in writing that the
over-allotment option set forth in Section 2 of the Placement Agreement dated
December 11, 1996 (as amended from time to time by the parties thereto) by and
between the Company and the Initial Purchaser is exercised in full) (except
pursuant to Sections 2.5, 2.6, 3.3, 3.5 and 15.2 hereof) upon the execution of
this Indenture, or from time to time thereafter, may be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the Trustee's receipt of the
written order of the Company, signed by its President, Chief Executive Officer
or Chief Financial Officer, and the other documents required pursuant to
Sections 16.5 and 16.6 hereof, without any further action of the Company
hereunder.
Section 2.2 Form of Debentures. The Debentures and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially in the form set forth in Exhibit A.
Any of the Debentures may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Debentures may be
listed, or to conform to usage.
Any Debenture in global form shall represent such of the outstanding
Debentures as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding
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Debentures from time to time endorsed thereon and that the aggregate amount of
outstanding Debentures represented thereby may from time to time be increased or
reduced to reflect transfers or exchanges permitted hereby. Any endorsement of a
Debenture in global form to reflect the amount of any increase or decrease in
the amount of outstanding Debentures represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in such manner and
upon instructions given by the holder of such Debentures in accordance with this
Indenture. Payment of principal of and interest and premium, if any, on any
Debenture in global form shall be made to the holder of such Debenture.
The terms and provisions contained in the form of Debenture attached as
Exhibit A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Section 2.3 Date and Denomination of Debentures; Payments of Interest. The
Debentures shall be issuable in registered form without coupons in denominations
of $1,000 principal amount and integral multiples thereof. Every Debenture shall
be dated the date of its authentication and shall bear interest from the
applicable date in each case as specified on the face of the form of Debenture
attached as Exhibit A hereto. Interest on the Debentures shall be computed on
the basis of a 360-day year comprised of twelve 30-day months.
The Person in whose name any Debenture (or its Predecessor Debenture) is
registered at the close of business on any record date with respect to any
interest payment date shall be entitled to receive the interest payable on such
interest payment date notwithstanding the cancellation of such Debenture upon
any transfer or exchange subsequent to the record date and prior to such
interest payment date. As provided in Section 15.2, and subject to the exception
contained therein, interest shall not be payable to such Person in the case of
any Debenture or Debentures, or portion thereof, which have been called for
redemption and which are converted on a date subsequent to such record date and
prior to such interest payment date. Interest may, as the Company shall specify
to the paying agent in writing be paid either (i) by check mailed to the address
of the Person entitled thereto as it appears on the Register or (ii) by wire
transfer of immediately available funds to an account maintained by such Person
located in the United States; provided, however, that payments to the Depositary
will be made by wire transfer of immediately available funds to the account of
the Depositary or its nominee. The term "record date" with respect to any
interest payment date shall mean the December 19 or June 18 preceding said
January 3 or July 3, respectively.
Any interest on any Debenture which is payable, but is not punctually paid
or duly provided for, on any said January 3 or July 3 (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Debentureholder on the
relevant record date by virtue of his having been such Debentureholder; and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below;
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(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Debentures (or their respective Predecessor
Debentures) are registered at the close of business on a special record
date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Debenture and
the date of the proposed payment (which shall be not less than twenty-five
(25) days after the receipt by the Trustee of such notice, unless the
Trustee shall consent to an earlier date), and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a special record date
for the payment of such Defaulted Interest which shall be not more than
fifteen (15) days and not less than ten (10) days prior to the date of the
proposed payment and not less than ten (10) days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed,
first-class postage prepaid to each Debentureholder at his address as it
appears on the Register, not less than ten (10) days prior to such special
record date. Notice of the proposed payment of such Defaulted Interest and
the special record date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Debentures (or
their respective Predecessor Debentures) were registered at the close of
business on such special record date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the Debentures
may be listed or designated for issuance, and upon such notice as may be
required by such exchange or automated quotation system, if, after notice
given by the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable by the
Trustee.
Section 2.4 Execution of Debentures. The Debentures shall be signed in the
name and on behalf of the Company by the facsimile signature of its President,
Chief Executive Officer or Chief Financial Officer and attested by the facsimile
signature of its Treasurer or Secretary (which may be printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise). Only such Debentures
as shall bear thereon a certificate of authentication substantially in the form
set forth on the form of Debenture attached as Exhibit A hereto, manually
executed by the Trustee (or an authenticating agent appointed by the Trustee as
provided by Section 16.11), shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate by the Trustee (or
such an authenticating agent) upon any Debenture executed by the
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Company shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Debentures nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debentures had not ceased to be
such officer of the Company; and any Debenture may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although at the date of
the execution of this Indenture any such person was not such an officer.
Section 2.5 Exchange and Registration of Transfer of Debentures:
Restrictions on Transfer; Depositary.
(a) The Company shall keep at its principal office, or shall cause to be
kept, at one of the offices or agencies maintained pursuant to Section 5.2, a
register (the "Register") in which, subject to such reasonable regulations as it
may prescribe, Debentures shall be registered and the transfer of Debentures
shall be registered as in this Article II provided. Such Register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time. At all reasonable times such Register shall be open
for inspection by the Trustee. Upon due presentment for registration of transfer
of any Debenture at any office or agency maintained by the Company pursuant to
Section 5.2, the Company shall execute and register and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Debenture or Debentures for an equal aggregate principal amount. The Trustee is
hereby appointed "Debenture registrar" for the purpose of registering Debentures
and transfers of Debentures as herein provided. The Company may appoint one or
more co-registrars in accordance with Section 5.2.
Upon due presentment for registration of transfer of any Debenture to the
Trustee and satisfaction of the requirements for such transfer set forth in this
Section 2.5, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Debentures of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture, without charge except for any tax or other governmental charge
imposed in connection imposed herewith.
Debentures may be exchanged for a like aggregate principal amount of
Debentures of other authorized denominations. Debentures to be exchanged shall
be surrendered at any office or agency to be maintained by the Company pursuant
to Section 5.2 and the Company shall execute and register and the Trustee shall
authenticate and deliver in exchange therefor the
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Debenture or Debentures which the Debentureholder making the exchange shall be
entitled to receive, bearing registration numbers not contemporaneously
outstanding.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
All Debentures presented or surrendered for registration of transfer or for
exchange, redemption or conversion shall (if so required by the Company or the
Debenture registrar) be duly endorsed, or be accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company, and the
Debentures shall be duly executed by the Debentureholder thereof or his attorney
duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax, assessment or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Debentures.
Neither the Company nor the Trustee shall be required to exchange or
register a transfer of (i) any Debentures for a period of fifteen (15) days next
preceding any selection of Debentures to be redeemed or (ii) any Debentures or
portions thereof called for redemption pursuant to Article III or (iii) any
Debentures or portion thereof surrendered for conversion pursuant to Article XV
or (iv) any Debentures or portions thereof surrendered for repayment pursuant to
Article III.
(b) So long as the Debentures are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, all Debentures that are so
eligible may be represented by one or more Debentures in global form registered
in the name of the Depositary or the nominee of the Depositary, except as
otherwise specified below. The transfer and exchange of beneficial interests in
any such Debenture in global form shall be effected through the Depositary in
accordance with this Indenture (including the restrictions on transfer set forth
herein) and the procedures of the Depositary therefor.
Debentures that upon initial issuance are beneficially owned by QIBs will
be represented by a global Debenture (the "144A Global Debenture"), and
Debentures that upon initial issuance are beneficially owned by Non-U.S. Persons
will be represented by another global Debenture (the "Regulation S Global
Debenture"). Transfers of interests in the Debentures between the 144A Global
Debenture and the Regulation S Global Debenture will be made in accordance with
the standing instructions and procedures of the Depositary and its participants.
The Trustee shall make appropriate endorsements to reflect increases or
decreases in the principal amounts of such global Debentures as set forth on the
face of the Debenture ("Principal Amount") to reflect any such transfers.
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Except as provided below, beneficial owners of a Debenture in global form
shall not be entitled to have certificates registered in their names, will not
receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered holders of such Debentures in global
form.
(c) So long as the Debentures are eligible for book-entry settlement, or
unless otherwise required by law, as set forth in an Officers' Certificate
delivered to the Trustee, upon receipt by the Trustee of any definitive
Debenture or Debentures for registration of transfer, together with (i) the form
of assignment duly completed with an indication that such transfer is being made
pursuant to Rule 144A, the Trustee shall make an endorsement on the 144A Global
Debenture to reflect an increase in the aggregate Principal Amount represented
by such 144A Global Debenture equal to the principal amount of the definitive
Debenture or Debentures being so transferred, and the Trustee shall cancel such
definitive Debenture or Debentures, in accordance with the standing instructions
and procedures of the Depositary, or (ii) the form of assignment duly completed
with an indication that such transfer is being made pursuant to Regulation S,
the Trustee shall made an endorsement on the Regulation S Global Debenture to
reflect an increase in the aggregate Principal Amount represented by such
Regulation S Global Debenture equal to the principal amount of the definitive
Debenture or Debentures being so transferred, and the Trustee shall cancel such
definitive Debenture or Debentures in accordance with the standing instructions
and procedures of the Depositary. Notwithstanding the foregoing, (i) no
definitive Debenture, or portion thereof, as to which the Trustee was notified
in writing by the Company that the Company or any Affiliate of the Company held
any beneficial interest therein, shall be included in such 144A Global Debenture
or Regulations S Global Debenture and (ii) the Trustee shall issue Debentures in
definitive form upon registration of transfer of any beneficial interest in a
Debenture in global form to the Company or any Affiliate of the Company,
provided the Trustee has been notified in writing by the Company or the
transferor that such beneficial interest is being transferred to the Company or
any Affiliate of the Company.
Any Debenture in global form may be endorsed with or have incorporated in
the text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the Depositary
or by the National Association of Securities Dealers, Inc. in order for the
Debentures to be tradeable on the PORTAL Market or as may be required for the
Debentures to be tradeable on any other market developed for trading of
securities pursuant to Rule 144A or Regulation S or required to comply with any
applicable law or any regulation thereunder or with the rules and regulations of
any securities exchange or automated quotation system upon which the Debentures
may be listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular
Debentures are subject.
(d) Every Debenture that bears or is required under this Section 2.5(d) to
bear the legend set forth in this Section 2.5(d) (together with any Common Stock
issued upon conversion of the Debentures and required to bear the legend set
forth in Section 2.5(e), collectively, the "Restricted Securities") shall be
subject to the restrictions on transfer set forth in this Section 2.5
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(d) (including those set forth in the legend set forth below) unless such
restrictions on transfer shall be waived by written consent of the Company, and
the holder of each such Restricted Debenture, by such Debentureholder's
acceptance thereof, agrees to be bound by all such restrictions on transfer. As
used in Sections 2.5(d) and 2.5(e), the term "transfer" encompasses any sale,
pledge, transfer or other disposition whatsoever of any Restricted Security.
Until written notification by the Company to the Trustee of the expiration
of the holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision), any certificate evidencing such
Debenture (and all securities issued in exchange therefor or substitution
thereof, other than Common Stock, if any, issued upon conversion thereof, which
shall bear the legend set forth in Section 2.5(e), if applicable) shall bear a
legend in substantially the following form, unless such Debenture has been sold
pursuant to a registration statement that has been declared effective under the
Securities Act (and which continues to be effective at the time of such
transfer), or unless otherwise agreed by the Company (with written notice
thereof by the Company to the Trustee and the Debenture registrar):
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THE DEBENTURE EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION; (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), RESELL OR OTHERWISE TRANSFER THE DEBENTURE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH DEBENTURE
EXCEPT (A) TO OMNICOM GROUP INC. OR ANY SUBSIDIARY THEREOF, (B) INSIDE
THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
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REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE DEBENTURE EVIDENCED HEREBY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(F) ABOVE), IT WILL FURNISH
TO THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE DEBENTURE EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE DEBENTURE EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE DEBENTURE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE CHASE MANHATTAN
BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A
PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THE DEBENTURE EVIDENCED HEREBY PURSUANT TO CLAUSE 2(F)
ABOVE OR UPON ANY TRANSFER OF THE DEBENTURE EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES
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ACT (OR ANY SUCCESSOR PROVISION), AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any Debenture (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to the conditions for removal of the foregoing legend set
forth therein have been satisfied may, upon surrender of such Debenture for
exchange to the Debenture registrar in accordance with the provisions of this
Section 2.5, be exchanged for a new Debenture or Debentures, of like tenor and
aggregate principal amount, which shall not bear the restrictive legend required
by this Section 2.5(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the second paragraph of Section 2.5(b) and in this
Section 2.5(d)), a Debenture in global form may not be transferred as a whole or
in part except by the Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee of the Depositary or by
the Depositary or any such nominee to a successor Depositary or a nominee of
such successor Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Debentures in global form. Initially, the 144A
Global Debenture and the Regulation S Global Debenture shall be issued to the
Depositary, registered in the name of Cede & Co., as the nominee of the
Depositary, and deposited with the Custodian for Cede & Co.
If at any time the Depositary for a Debenture in global form notifies the
Company that it is unwilling or unable to continue as Depositary for such
Debenture, the Company may appoint a successor Depositary with respect to such
Debenture. If a successor Depositary is not appointed by the Company within
ninety (90) days after the Company receives such notice, the Company will
execute, and the Trustee, upon receipt of an Officers' Certificate for the
authentication and delivery of Debentures, will authenticate and deliver,
Debentures in certificated form, in aggregate principal amount equal to the
principal amount of such Debenture in global form, in exchange for such
Debenture in global form.
If a Debenture in certificated form is issued in exchange for any portion
of a Debenture in global form after the close of business at the office or
agency where such exchange occurs on any record date and before the opening of
business at such office or agency on the next succeeding interest payment date,
interest will not be payable on such interest payment date in respect of such
Debenture, but will be payable on such interest payment date, subject to the
provisions of Section 2.3, only to the Person to whom interest in respect of
such portion of such Debenture in global form is payable in accordance with the
provisions of this Indenture.
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Debentures in certificated form issued in exchange for all or a part of a
Debenture in global form pursuant to this Section 2.5 shall be registered in
such names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such Debentures in certificated form to the Persons in whose names such
Debentures in certificated form are so registered.
At such time as all interests in a Debenture in global form have been
redeemed, converted, canceled, exchanged for Debentures in certificated form, or
transferred to a transferee who receives Debentures in certificated form
thereof, such Debenture in global form shall, upon receipt thereof, be canceled
by the Trustee in accordance with standing procedures and instructions existing
between the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in a global Debenture is exchanged for Debentures
in certificated form, redeemed, converted, repaid or canceled, or transferred to
a transferee who receives Debentures in certificated form therefor or any
Debenture in certificated form is exchanged or transferred for part of a
Debenture in global form, the principal amount of such Debenture in global form
shall, in accordance with the standing procedures and instructions existing
between the Depositary and the Custodian, be appropriately reduced or increased,
as the case may be, and an endorsement shall be made on such Debenture in global
form, by the Trustee or the Custodian, at the direction of the Trustee, to
reflect such reduction or increase.
(e) Until written notification by the Company to the Trustee of the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision), any stock certificate
representing Common Stock issued upon conversion of such Debenture shall bear a
legend in substantially the following form, unless such Common Stock has been
sold pursuant to a registration statement that has been declared effective under
the Securities Act (and which continues to be effective at the time of such
transfer) or such Common Stock has been issued upon conversion of Debentures
that have been transferred pursuant to a registration statement that has been
declared effective under the Securities Act, or unless otherwise agreed by the
Company (with written notice thereof by the Company to the Trustee and the
Debenture registrar):
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER
HEREOF AGREES THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), (1) IT WILL NOT
RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY
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EXCEPT (A) TO OMNICOM GROUP INC. OR ANY SUBSIDIARY THEREOF, (B) INSIDE
THE UNITED STATES TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
THAT PRIOR TO SUCH TRANSFER FURNISHES TO CHASEMELLON SHAREHOLDER
SERVICES, L.L.C., AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS
APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE COMMON
STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRANSFER AGENT OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), (D)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE), IT WILL FURNISH TO
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., AS TRANSFER AGENT (OR A
SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE
COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(F)
ABOVE OR UPON ANY TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY AFTER
THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
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Any such Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for removal
of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.5(e).
(f) Any Debenture or Common Stock issued upon the conversion or exchange of
a Debenture that, prior to the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), is purchased or owned by the Company or any Affiliate thereof may
not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such
Debentures or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144).
Section 2.6 Mutilated, Destroyed, Lost or Stolen Debentures. In case any
Debenture shall become mutilated or be apparently destroyed, lost or stolen, the
Company in its discretion may execute, and upon its request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and deliver, a
new Debenture, bearing a number not contemporaneously outstanding, in exchange
and substitution for the mutilated Debenture, or in lieu of and in substitution
for the Debenture so apparently destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to hold each of them harmless for any loss,
liability, cost or expense caused by or connected with such substitution, and,
in every case of destruction, loss or theft, the applicant shall also furnish to
the Company, to the Trustee and, if applicable, to such authenticating agent
evidence to their satisfaction of the destruction, loss or theft of such
Debenture and of the ownership thereof.
Following receipt by the Trustee or such authenticating agent, as the case
may be, of satisfactory security or indemnity and evidence, as described in the
preceding paragraph, the Trustee or such authenticating agent may authenticate
any such substituted Debenture and deliver such Debenture. Upon the issuance of
any substituted Debenture, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses connected therewith. In case any
Debenture which has matured or is about to mature or has been called for
redemption or is about to be converted into Common Stock shall become mutilated
or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Debenture, pay or authorize the payment of or convert or authorize
the conversion of the same (without surrender thereof except in the case of a
mutilated Debenture), as the case may be, if the applicant for such payment or
conversion shall furnish to the Company, to the Trustee and, if applicable, to
such authenticating agent such security or indemnity as may be required by them
to save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in case of destruction, loss or theft,
evidence satisfactory to the Company, the Trustee and, if applicable,
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any paying agent or conversion agent of the destruction, loss or theft of such
Debenture and of the ownership thereof.
Every substitute Debenture issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the apparently destroyed, lost or stolen Debenture shall be found
at any time, and shall be entitled to all the benefits of (but shall be subject
to all the limitations set forth in) this Indenture equally and proportionately
with any and all other Debentures duly issued hereunder. To the extent permitted
by law, all Debentures shall be held and owned upon the express condition that
the foregoing provisions are exclusive with respect to the replacement or
payment or conversion of mutilated, destroyed, lost or stolen Debentures and
shall preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment or conversion of negotiable instruments or other
securities without their surrender.
Section 2.7 Temporary Debentures. Pending the preparation of Debentures in
certificated form, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the request of the Company,
authenticate and deliver temporary Debentures (printed or lithographed).
Temporary Debentures shall be issuable in any authorized denomination, and
substantially in the form of the Debentures in certificated form, but with such
omissions, insertions and variations as may be appropriate for temporary
Debentures, all as may be determined by the Company. Every such temporary
Debenture shall be executed by the Company and authenticated by the Trustee or
such authenticating agent upon the same conditions and in substantially the same
manner, and with the same effect, as the Debentures in certificated form.
Without unreasonable delay the Company will execute and deliver to the Trustee
or such authenticating agent Debentures in certificated form (other than in the
case of Debentures in global form) and thereupon any or all temporary Debentures
(other than any such Debenture in global form) may be surrendered in exchange
therefor, at each office or agency maintained by the Company pursuant to Section
5.2 and the Trustee or such authenticating agent shall authenticate and deliver
in exchange for such temporary Debentures an equal aggregate principal amount of
Debentures in certificated form. Such exchange shall be made by the Company at
its own expense and without any charge therefor. Until so exchanged, the
temporary Debentures shall in all respects be entitled to the same benefits and
subject to the same limitations under this Indenture as Debentures in
certificated form authenticated and delivered hereunder.
Section 2.8 Cancellation of Debentures Paid, Etc. All Debentures
surrendered for the purpose of payment, redemption, conversion, exchange or
registration of transfer, shall, if surrendered to the Company or any paying
agent or any Debenture registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee shall destroy canceled Debentures (unless the Company directs it to do
otherwise) and, after such
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destruction, shall deliver a certificate of such destruction to the Company. If
the Company shall acquire any of the Debentures, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Debentures unless and until the same are delivered to the Trustee for
cancellation.
ARTICLE III
REDEMPTION AND REPAYMENT OF DEBENTURES
Section 3.1 Redemption Prices. The Debentures will not be redeemable at the
option of the Company prior to December 29, 2000. At any time on or after
December 29, 2000 and prior to maturity, the Debentures may (unless theretofore
repaid or converted) be redeemed at the option of the Company as a whole, or
from time to time in part, upon notice as set forth in Section 3.2, and at the
following redemption prices (expressed as percentages of the principal amount),
together in each case with accrued interest to, but excluding, the date fixed
for redemption, if redeemed during the 3-month period beginning:
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Date Percentage Date Percentage
---- ---------- ---- ----------
January 3, 2001......... 108.324% January 3, 2002......... 110.607%
April 3, 2001........... 108.890% April 3, 2002........... 111.207%
July 3, 2001............ 109.448% July 3, 2002............ 111.801%
October 3, 2001......... 110.031% October 3, 2002......... 112.418%
and 100% on or after January 3, 2003; provided that if the date fixed for
redemption is on January 3 or July 3, then the interest payable on such date
shall be paid to the holder of record on the next preceding December 19 or June
18, respectively. If the date fixed for redemption is on or after December 29,
2000 but before January 3, 2001, the redemption price shall be at 108.324% of
the principal amount with accrued interest to, but excluding, January 3, 2001.
Section 3.2 Notice of Redemption; Selection of Debentures. In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Debentures pursuant to Section 3.1 for redemption then it, or at
its request, the Trustee in the name of and at the expense of the Company, shall
mail or cause to be mailed a notice of such redemption at least 30 and not more
than 60 days prior to the date fixed for redemption to the holders of Debentures
so to be redeemed as a whole or in part at their last addresses as the same
appear on the Register. Such mailing shall be by first class mail. The notice if
mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the holder receives such notice. In any case, failure
to give such notice by mail or any defect in the notice to the holder of any
Debenture designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Debenture.
Each such notice of redemption shall specify the principal amount of each
Debenture to be redeemed, the date fixed for redemption which shall be a
Business Day, the redemption price at which Debentures are to be redeemed, the
place or places of payment, that payment will be made upon presentation and
surrender of such Debentures, that interest accrued to, but excluding, the date
fixed for redemption (unless the date fixed for redemption is on or after
December 29, 2000 but before January 3, 2001 in which case with accrued interest
to January 3, 2001) will be paid as specified in said notice, and that on and
after said date (or on or after January 3, 2001, if the date fixed for
redemption is on or after December 29, 2000, but before January 3, 2001)
interest thereon or on the portions thereof to be redeemed will cease to accrue.
Such notice shall also state the current Conversion Price and the date on which
the right to convert such Debentures or portions thereof into Common Stock will
expire. If fewer than all the Debentures are to be redeemed, the notice of
redemption shall identify the Debentures to be redeemed. In case any Debenture
is to be redeemed in part only, the notice of redemption shall state the portion
of the principal amount thereof to be redeemed and shall state that on and after
the date fixed for redemption, upon surrender of such Debenture, a new Debenture
or Debentures in principal amount equal to the unredeemed portion thereof will
be issued.
On or before the date fixed for redemption specified in the notice of
redemption given as provided in this Section 3.2, the Company will deposit with
the Trustee or with one or more
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paying agents (or, if the Company is acting as its own paying agent, set aside,
segregate and hold in trust as provided in Section 5.4) an amount of money
sufficient to redeem on the date fixed for redemption all the Debentures (or
portions thereof) so called for redemption (other than those theretofore
surrendered for conversion into Common Stock) at the appropriate redemption
price, together with accrued interest to, but excluding, the date fixed for
redemption (or to, but excluding, January 3, 2001, if the date fixed for
redemption is on or after December 29, 2000, but before January 3, 2001);
provided that if such payment is made on the date fixed for redemption it must
be received by the Trustee or paying agent, as the case may be, by 11:00 a.m.
New York City time, on such date. If any Debenture called for redemption is
converted pursuant hereto, any money deposited with the Trustee or any paying
agent or so segregated and held in trust for the redemption of such Debenture
shall be paid to the Company upon its request, or, if then held by the Company
shall be discharged from such trust. If fewer than all the Debentures are to be
redeemed, the Company will give the Trustee written notice not less than 60 days
prior to the date fixed for redemption as to the aggregate principal amount of
Debentures to be redeemed.
If less than all of the outstanding Debentures are to be redeemed, the
Trustee shall select the Debentures to be redeemed in principal amounts of
$1,000 or 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 converts a portion of such
Debentures, such converted portion shall be deemed to be of the portion selected
for redemption. Debentures must be presented for redemption. If the Company
shall acquire any of the Debentures, such acquisition shall not operate as or be
deemed for any purpose to be a redemption or satisfaction of the indebtedness
represented by such Debentures unless and until the same are delivered to the
Trustee for cancellation. The Debentures (or portions thereof) so selected shall
be deemed duly selected for redemption for all purposes hereof, notwithstanding
that any such Debenture is converted as a whole or in part before the mailing of
the notice of redemption.
Upon any redemption of less than all Debentures, the Company and the
Trustee may treat as outstanding any Debentures surrendered for conversion
during the period of fifteen (15) days next preceding the mailing of a notice of
redemption and may treat as outstanding any Debenture authenticated and
delivered during such period in exchange for the unconverted portion of any
Debenture converted in part during such period.
Section 3.3 Payment of Debentures Called for Redemption. If notice of
redemption has been given as above provided, the Debentures or portions of
Debentures with respect to which such notice has been given shall, unless
theretofore converted into Common Stock pursuant to the terms hereof, become due
and payable on the date fixed for redemption and at the place or places stated
in such notice at the applicable redemption price, together with interest
accrued to, but excluding, the date fixed for redemption (or to, but excluding,
January 3, 2001 if the date fixed for redemption is on or after December 29,
2000, but before January 3, 2001), and on and after said date (unless the
Company shall default in the payment of such Debentures at
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the redemption price, together with interest accrued to said date) interest on
the Debentures or portion of Debentures so called for redemption shall cease to
accrue and such Debentures shall cease after the close of business on the
Business Day immediately preceding the date fixed for redemption to be
convertible into Common Stock and, except as provided in Sections 8.5 and 13.4,
to be entitled to any benefit or security under this Indenture, and the holders
thereof shall have no right in respect of such Debentures except the right to
receive the redemption price thereof and unpaid interest to, but excluding, the
date fixed for redemption (or to January 3, 2001 if the date fixed for
redemption is on or after December 29, 2000, but before January 3, 2001). On
presentation and surrender of such Debentures at a place of payment in said
notice specified, the said Debentures or the specified portions thereof shall be
paid and redeemed by the Company at the applicable redemption price, together
with interest accrued thereon to, but excluding, the date fixed for redemption
(or to, but excluding, January 3, 2001 if the date fixed for redemption is on or
after December 29, 2000, but before January 3, 2001); provided that, if the
applicable date fixed for redemption is an interest payment date, the
semi-annual payment of interest becoming due on such date shall be payable to
the holders of such Debentures registered as such on the relevant record date
instead of the holders surrendering such Debentures for redemption on such date.
Upon presentation of any Debenture redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the holder thereof, at
the expense of the Company, a new Debenture or Debentures, of authorized
denominations, in principal amount equal to the unredeemed portion of the
Debenture so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Debentures
or mail any notice of optional redemption during the continuance of a default in
payment of interest or premium on the Debentures or of any Event of Default. If
any Debenture called for redemption shall not be so paid upon surrender thereof
for redemption, the principal and premium, if any, shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate borne
by the Debenture and such Debenture shall remain convertible into Common Stock
until the principal and premium, if any, shall have been paid or duly provided
for.
Section 3.4 Conversion Arrangement on Call for Redemption. In connection
with any redemption of Debentures, the Company may arrange for the purchase and
conversion of any Debentures by an agreement with one or more investment bankers
or other purchasers to purchase such Debentures by paying to the Trustee in
trust for the Debentureholders, on or before the date fixed for redemption (if
such payment is made on the date fixed for redemption it must be received by the
Trustee or paying agent, as the case may be, by 11:00 a.m. New York City time,
on such date), an amount not less than the applicable redemption price, together
with interest accrued to, but excluding, the date fixed for redemption (or to,
but excluding, January 3, 2001 if the date fixed for redemption is on or after
December 29, 2000, but before January 3, 2001), of such Debentures.
Notwithstanding anything to the contrary contained in this Article III, the
obligation of the Company to pay the redemption price of such Debentures,
together with interest accrued to, but excluding, the date fixed for redemption
(or to, but excluding, January 3,
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2001 if the date fixed for redemption is on or after December 29, 2000, but
before January 3, 2001), shall be deemed to be satisfied and discharged to the
extent such amount is so paid by such purchasers. If such an agreement is
entered into, a copy of which will be filed with the Trustee prior to the date
fixed for redemption, any Debentures not duly surrendered for conversion by the
holders thereof may, at the option of the Company, be deemed, to the fullest
extent permitted by law, acquired by such purchasers from such holders and
(notwithstanding anything to the contrary contained in Article XV) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the date fixed for redemption (and the right to convert any such
Debentures shall be extended through such time), subject to payment of the above
amount as aforesaid. At the direction of the Company, the Trustee shall hold and
dispose of any such amount paid to it in the same manner as it would monies
deposited with it by the Company for the redemption of Debentures. Without the
Trustee's prior written consent, no arrangement between the Company and such
purchasers for the purchase and conversion of any Debentures shall increase or
otherwise affect any of the powers, duties, responsibilities or obligations of
the Trustee as set forth in this Indenture, and the Company agrees to indemnify
the Trustee from, and hold it harmless against, any loss, liability or expense
arising out of or in connection with any such arrangement for the purchase and
conversion of any Debentures between the Company and such purchasers to which
the Trustee has not consented in writing, including the costs and expenses
incurred by the Trustee in the defense of any claim or liability arising out of
or in connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.
Section 3.5 Repayment at Option of Holders.
(a) Notwithstanding the Company's right of redemption, the holder of a
Debenture may elect to have that Debenture or portions thereof (in the principal
amount of $1,000 or any multiple thereof) repaid by the Company on the Holder
Repayment Date. Any such repayment shall be at a repayment price of 112.418% of
the principal amount thereof (the "Holder Repayment Price") with interest
accrued to, but excluding, the Holder Repayment Date on the repaid Debentures.
For a Debenture to be so repaid at the option of the holder, the Company must
receive at an office of one of the Company's paying agents such Debenture with
the form entitled "Option to Elect Repayment on January 3, 2003" on the reverse
thereof duly completed (a "Holder Repayment Notice"), together with such
Debenture duly endorsed, at any time from the opening of business on the date
that is 20 Business Days prior to the Holder Repayment Date until the close of
business on the Business Day immediately preceding such Holder Repayment Date.
In order to exercise the repayment option with respect to any interest in a
Debenture in global form, the beneficial holder must comply with the applicable
procedures of the Depositary, furnish appropriate endorsements and documentation
if required by the Company or the Trustee or paying agent and such notice shall
not have been withdrawn.
Notwithstanding anything herein to the contrary, any holder delivering to
the paying agent the Holder Repayment Notice contemplated by this Section 3.5(a)
shall have the right at any time prior to the close of business on the Business
Day immediately preceding the Holder
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Repayment Date to withdraw, in whole or in part, such Holder Repayment Notice by
delivery of a written notice of withdrawal to the paying agent in accordance
with Section 3.7. In order to exercise the withdrawal option with respect to any
interest in a Debenture in global form, the beneficial holder must comply with
the applicable procedures of the Depositary.
All questions as to the validity, eligibility (including time of receipt)
and acceptance of any Debenture for repayment shall be determined by the
Company, whose determination shall be final and binding.
Upon presentation of any Debenture to be repaid in part only, pursuant to
this Section 3.5, the Company shall execute and, upon the Company's written
direction to the Trustee, the Trustee shall authenticate and deliver to the
holder thereof, at the expense of the Company, a new Debenture or Debentures, of
authorized denominations, in principal amount equal to the unrepaid portion of
the Debentures so presented.
On or before the Holder Repayment Date, the Company shall deposit with the
Trustee or with one or more paying agents (or, if the Company is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
5.4) an amount of money sufficient to pay the aggregate Holder Repayment Price
including any interest accrued to, but excluding, the Holder Repayment Date of
all the Debentures or portions thereof which are to be repaid as of such Holder
Repayment Date; provided that if such payment is made on the Holder Repayment
Date it must be received by the Trustee or paying agent, as the case may be, by
11:00 a.m. New York City time, on such date.
Payment of the Holder Repayment Price, together with any accrued interest,
for a Debenture for which a Holder Repayment Notice has been delivered and not
withdrawn is conditioned upon book-entry transfer or delivery of such Debenture
(together with necessary endorsements) to the Company's paying agent at its
office at 55 Water Street, Room 234, North Building, New York, New York, 10041,
or any other office of the paying agent maintained for such purpose, at any time
(whether prior to, on or after the Holder Repayment Date) after delivery of such
Holder Repayment Notice. Payment of the Holder Repayment Price of such Debenture
will be made promptly following the later of the Holder Repayment Date or the
time of book-entry transfer of such Debenture or the time of delivery of the
Debentures by mailing checks or by sending a wire transfer for immediately
available funds to an account maintained in the United States for the amount
payable to the holders of such Debentures entitled thereto as they shall appear
on the Register; provided, however, that payments to the Depositary will be made
by wire transfer of immediately available funds to the account of the Depositary
or its nominee.
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The paying agent shall promptly notify the Company of the receipt by it of
any Holder Repayment Notice or written notice of withdrawal thereof.
(b) The Company shall use its best efforts to have a notice regarding
repayment at the option of the holders on the Holder Repayment Date published at
least once in each of Bloomberg Business News, Dow Jones News (DJN) and Reuter
Financial Report in The City of New York at least 30 days prior to the Holder
Repayment Date. Each published notice shall specify the Holder Repayment Date,
the price at which the Company shall be obligated to repay Debentures, that the
holder must exercise the repayment right prior to the close of business on the
Business Day immediately preceding the Holder Repayment Date, that the holder
shall have the right to withdraw, in whole or in part, any Debentures
surrendered prior to the close of business on the Business Day immediately
preceding the Holder Repayment Date, a description of the procedure which a
Debentureholder must follow to exercise such repayment right and to withdraw any
surrendered Debentures, the place or places where the holder is to surrender
such holder's Debentures, and the amount of interest accrued on each Debenture
to the Holder Repayment Date. The Company shall promptly deliver a copy of each
published notice to the Trustee.
No failure of the Company to give the foregoing notice and no defect
therein shall limit the Debentureholders' repayment rights or affect the
validity of the proceedings for the repayment of the Debentures pursuant to this
Section 3.5.
Section 3.6 Repayment at Option of Holders Upon a Fundamental Change.
(a) If a Fundamental Change occurs at any time while Debentures are
outstanding, each holder of Debentures shall have the right, at such holder's
option, to require the Company to repay such holder with respect to all (and not
less than all for Debentures in certificated form) such holder's Debentures on
the date (the "Fundamental Change Repayment Date") that is the 45th day (or if
such 45th day is not a Business Day, the next succeeding Business Day) after the
date of the Company Notice of such Fundamental Change. Such repayment shall be
made at the following prices (expressed as percentages of the principal amount)
in the event of a Fundamental Change occurring during the 3-month period
beginning:
Date Percentage Date Percentage
---- ---------- ---- ----------
January 3, 1997......... 100.427% January 3, 1999......... 104.142%
April 3, 1997........... 100.875% April 3, 1999........... 104.646%
July 3, 1997............ 101.315% July 3, 1999............ 105.142%
October 3, 1997......... 101.777% October 3, 1999......... 105.660%
January 3, 1998......... 102.230% January 3, 2000......... 106.171%
April 3, 1998........... 102.705% April 3, 2000........... 106.705%
July 3, 1998............ 103.172% July 3, 2000............ 107.231%
October 3, 1998......... 103.661%
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at a repayment price of 107.781% of the principal amount if a Fundamental Change
occurs on or after October 3, 2000 but before December 29, 2000, and thereafter
at the redemption price set forth under Section 3.1 which would be applicable to
a redemption at the option of the Company; provided in each case that if the
Applicable Price is less than the Reference Market Price, the Company shall
repay such Debentures at a price equal to the foregoing repayment price
multiplied by the fraction obtained by dividing the Applicable Price by the
Reference Market Price. In each case, the Company shall also pay accrued
interest, if any, on such Debentures to, but excluding, the Fundamental Change
Repayment Date; provided, that if such Fundamental Change Repayment Date is
January 3 or July 3, then the interest payable on such date shall be paid to the
holder of record of the Debenture on the next preceding record date.
(b) On or before the tenth day after the occurrence of a Fundamental
Change, the Company, or, at its written request (which must be received by the
Trustee at least five Business Days prior to the date the Trustee is requested
to give notice as described below), the Trustee in the name of and at the
expense of the Company, shall mail or cause to be mailed to all holders of
record on the date of the Fundamental Change a notice (the "Company Notice") of
the occurrence of such Fundamental Change and of the repayment right at the
option of the holders arising as a result thereof. Such notice shall be mailed
in the manner and with the effect set forth in the first paragraph of Section
3.2. The Company shall also use its best efforts to have a notice published at
least once in each of Bloomberg Business News, Dow Jones News (DJN) and Reuter
Financial Report in The City of New York on or before the tenth day after the
occurrence of a Fundamental Change. The Company shall promptly deliver a copy of
each of the published notices and Company Notice to the Trustee.
Each published notice and Company Notice shall specify the circumstances
constituting the Fundamental Change, the Fundamental Change Repayment Date, the
price at which the Company shall be obligated to repay Debentures (the
"Fundamental Change Repayment Price"), that the holder must exercise the
repayment right before the close of business on the Business Day immediately
preceding the Fundamental Change Repayment Date, that the holder shall have the
right to withdraw any Debentures surrendered prior to the close of business on
the Business Day immediately preceding the Fundamental Change Repayment Date, a
description of the procedure which a Debentureholder must follow to exercise
such repayment right and to withdraw any surrendered Debentures, the place or
places where the holder is to surrender such holder's Debentures, and the amount
of interest accrued on each Debenture to, but excluding, the Fundamental Change
Repayment Date.
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Debentureholders' repayment rights or affect the
validity of the proceedings for the repayment of the Debentures pursuant to this
Section 3.6.
(c) For a Debenture to be repaid at the option of the holder resulting from
a Fundamental Change, the Company must receive at an office of one of the
Company's paying agents such Debenture with a form entitled "Option to Elect
Repayment Upon A Fundamental
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Change" on the reverse thereof duly completed (the "Fundamental Change Repayment
Notice"), together with such Debenture duly endorsed, at any time from the
opening of business on the date that is on or before the 43rd day after the
Company Notice (or if such 43rd day is not a Business Day, the immediately
preceding Business Day) and such Fundamental Change Repayment Notice shall not
have been withdrawn. In order to exercise the repayment option with respect to
any interest in a Debenture in global form, the beneficial holder must comply
with the applicable procedures of the Depositary, furnish appropriate
endorsements and documentation if required by the Company or the Trustee or
paying agent and such notice shall not have been withdrawn.
Notwithstanding anything herein to the contrary, any holder delivering to
the paying agent the Fundamental Change Repayment Notice contemplated by this
Section 3.6(c) shall have the right at any time prior to the close of business
on the Business Day immediately preceding the Fundamental Change Repayment Date
to withdraw such Fundamental Change Repayment Notice (as to Debentures in
certificated form, withdrawal must be made in full) by delivery of a written
notice of withdrawal to the paying agent in accordance with Section 3.7. In
order to exercise the withdrawal option with respect to any interest in a
Debenture in global form, the beneficial holder must comply with the applicable
procedures of the Depositary.
All questions as to the validity, eligibility (including time of receipt)
and acceptance of any Debenture for repayment shall be determined by the
Company, whose determination shall be final and binding absent manifest error.
(d) On or before the Fundamental Change Repayment Date, the Company will
deposit with the Trustee or with one or more paying agents (or, if the Company
is acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 5.4) an amount of money sufficient to repay on the
Fundamental Change Repayment Date all the Debentures which are to be repaid on
such date at the appropriate Fundamental Change Repayment Price, together with
accrued interest to, but excluding, the Fundamental Change Repayment Date;
provided that if such payment is made on the Fundamental Change Repayment Date
it must be received by the Trustee or paying agent, as the case may be, by 11:00
a.m. New York City time, on such date. Payment of the Fundamental Change
Repayment Price, together with any accrued interest, for a Debenture for which a
Fundamental Change Repayment Notice has been delivered and not withdrawn is
conditioned upon book-entry transfer or delivery of such Debenture (together
with necessary endorsements) to the Company's paying agent at its office at 55
Water Street, Room 234, North Building, New York, New York, 10041, or any other
office of the Company's paying agent maintained for such purpose, at any time
(whether prior to, on or after the Fundamental Change Repayment Date) after
delivery of such Fundamental Change Repayment Notice. Payment of the Fundamental
Change Repayment Price, together with any accrued interest, for such Debenture
will be made promptly following the later of the Fundamental Change Repayment
Date or the time of book-entry transfer or delivery of such Debenture by mailing
checks or by sending a wire transfer for immediately available funds to an
account maintained in the United States for the amount payable to the holders of
such
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Debentures entitled thereto as they shall appear on the Register; provided,
however, that payments to the Depositary will be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee. If
the Company's paying agent holds, in accordance with the terms of this
Indenture, money sufficient to pay the Fundamental Change Repayment Price,
together with any accrued interest, of such Debenture on the Fundamental Change
Repayment Date, then on and after such date, such Debenture will cease to be
outstanding, and interest on such Debenture shall cease to accrue, and all other
rights of the holder shall terminate (other than the right to receive the
repayment price upon the time of book-entry transfer or delivery of the
Debentures).
(e) In the case of a consolidation, merger, conveyance, transfer or lease
to which Section 15.6 applies, in which the Common Stock of the Company is
changed or exchanged as a result into the right to receive securities, cash or
other property which includes shares of Common Stock of the Company or another
Person that are, or upon issuance will be, traded on a United States national
securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such securities, cash and other property (as
determined by the Company, which determination shall be conclusive and binding),
then the Person formed by such consolidation or resulting from such merger or
which acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (accompanied by an Opinion of Counsel that such
supplemental indenture complies with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) modifying the provisions of
this Indenture relating to the right of holders of the Debentures to cause the
Company to repay the Debentures following a Fundamental Change, including
without limitation the applicable provisions of this Section 3.6 and the
definitions of the Applicable Price, Common Stock, Fundamental Change and
Reference Market Price, as appropriate, as determined in good faith by the
Company (which determination shall be conclusive and binding), to make such
provisions apply to the common stock and the issuer thereof if different from
the Company and Common Stock of the Company (in lieu of the Company and the
Common Stock of the Company).
Section 3.7 Effect of Holder Repayment Notice or Fundamental Change
Repayment Notice and Withdrawal of Such Notices. Upon receipt by the Company of
the Holder Repayment Notice or Fundamental Change Repayment Notice specified in
Section 3.5 or Section 3.6, as applicable, the holder of the Debenture in
respect of which such Holder Repayment Notice or Fundamental Change Repayment
Notice, as the case may be, was given shall (unless such Holder Repayment Notice
or Fundamental Change Repayment Notice is withdrawn as specified in the
following paragraph) thereafter be entitled to receive solely the Holder
Repayment Price or Fundamental Change Repayment Price, as the case may be, with
respect to such Debenture. Such Holder Repayment Price or Fundamental Change
Repayment Price shall be paid to such holder promptly following the later of (x)
the Holder Repayment Date or the Fundamental Change Repayment Date, as the case
may be, with respect to such Debenture (provided the conditions in Section 3.5
or Section 3.6, as applicable, have been satisfied) or (y)
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the time of book-entry transfer or (z) time of delivery of such Debenture to the
paying agent by the holder thereof in the manner required by Section 3.5 or
Section 3.6, as applicable. Debentures in respect of which a Holder Repayment
Notice or Fundamental Change Repayment Notice, as the case may be, has been
given by the holder thereof may not be converted on or after the date of the
delivery of such Holder Repayment Notice (or Fundamental Change Repayment
Notice, as the case may be), unless such Holder Repayment Notice (or Fundamental
Change Repayment Notice, as the case may be) has first been validly withdrawn as
specified in the following paragraph.
A Holder Repayment Notice or Fundamental Change Repayment Notice, as the
case may be, may be withdrawn by means of a written notice of withdrawal
delivered to the office of the paying agent at any time prior to the close of
business on the Business Day immediately preceding the Holder Repayment Date or
the Fundamental Change Repayment Date, as the case may be, to which it relates
specifying:
(1) the certificate number of the Debenture in respect of which such
notice of withdrawal is being submitted,
(2) the principal amount of the Debenture with respect to which such
notice of withdrawal is being submitted, and
(3) the principal amount, if any, of such Debenture which remains
subject to the original Holder Repayment Notice and which has been or will
be delivered for purchase by the Company.
A Fundamental Change Notice must be withdrawn in whole and not in part for
Debentures held in certificated form.
There shall be no repayment of any Debentures pursuant to Section 3.5 or
Section 3.6 if there has occurred (prior to, on or after, as the case may be,
the giving, by the holders of such Debentures, of the required Holder Repayment
Notice or Fundamental Change Repayment Notice, as the case may be), and is
continuing an Event of Default (other than a default in the payment of the
Holder Repayment Price or Fundamental Change Repayment Price, as the case may
be, with respect to such Debentures).
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Section 3.8 Covenant to Comply with Securities Laws upon Purchase of
Debentures. In connection with any offer to purchase or redemption of Debentures
under Section 3.4, 3.5 or 3.6 hereof, the Company shall (i) comply with Rule
13e-4 (which term, as used herein, includes any successor provision thereto)
under the Exchange Act, if applicable, (ii) file the related Schedule 13E-4 (or
any successor schedule, form or report) under the Exchange Act, if applicable,
and (iii) otherwise comply with all Federal and state securities laws so as to
permit the rights and obligations under Sections 3.5 and 3.6 to be exercised in
the time and in the manner specified in Sections 3.5 and 3.6.
Section 3.9 No Sinking Fund. The Debentures shall not be entitled to the
benefit of any sinking fund.
ARTICLE IV
SUBORDINATION OF DEBENTURES
Section 4.1 Agreement of Subordination. The Company covenants and agrees,
and each holder of Debentures issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued subject to
the provisions of this Article IV; and each Person holding any Debenture,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest on all
Debentures issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and subject in right of payment to the prior payment
in full of all Senior Indebtedness, whether outstanding at the date of this
Indenture or thereafter incurred.
No provision of this Article IV shall prevent the occurrence of any default
or Event of Default hereunder.
Section 4.2 Payments to Debentureholders. In the event and during the
continuation of any default in the payment of principal, premium, interest or
any other payment due on any Senior Indebtedness continuing beyond the period of
grace, if any, specified in the instrument or lease evidencing such Senior
Indebtedness, then, unless and until such default shall have been cured or
waived or shall have ceased to exist, no payment shall be made by the Company
with respect to the principal of, or premium, if any, or interest on the
Debentures, except payments made pursuant to Article XIII hereof from monies
deposited with the Trustee pursuant thereto prior to the happening of such
default.
Upon any payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding-up or liquidation or reorganization of the
Company, whether voluntary or involuntary or
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in bankruptcy, insolvency, receivership or other proceedings, all amounts due or
to become due upon all Senior Indebtedness shall first be paid in full, or
payment thereof provided for in money in accordance with its terms, before any
payment is made on account of the principal (and premium, if any) or interest on
the Debentures (except payments made pursuant to Article XIII hereof from monies
deposited with the Trustee pursuant thereto prior to the happening of such
dissolution, winding-up, liquidation or reorganization); and upon any such
dissolution or winding-up or liquidation or reorganization any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of the Debentures
or the Trustee would be entitled, except for the provisions of this Article IV,
shall (except as aforesaid) be paid by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the holders of the Debentures or by the Trustee under this
Indenture if received by them or it, directly to the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness, before any payment or distribution is made to
the holders of the Debentures or to the Trustee. By reason of such
subordination, in the event of the Company's dissolution, holders of Senior
Indebtedness may receive more, ratably, and holders of the Debentures may
receive less, ratably, than the other creditors of the Company.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the holders of the Debentures before all Senior Indebtedness is paid
in full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in money
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article IV, the words, "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article IV with respect to
the Debentures to the payment of all Senior Indebtedness which may at the time
be outstanding; provided that (i) the Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of the
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Senior Indebtedness (other than leases) and of leases which are assumed are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article XII hereof shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 4.2
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article XII hereof.
Nothing in this Section 4.2 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 8.6.
Section 4.3 Subrogation of Debentures. Subject to the payment in full of
all Senior Indebtedness, the rights of the holders of the Debentures shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal of (and premium, if
any) and interest on the Debentures shall be paid in full; and, for the purposes
of such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article IV, and no payment over pursuant to the provisions of this Article IV,
to or for the benefit of the holders of Senior Indebtedness by holders of the
Debentures or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness, and the holders of the Debentures, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness. It is understood that the provisions of this Article IV are and
are intended solely for the purpose of defining the relative rights of the
holders of the Debentures, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
Nothing contained in this Article IV or elsewhere in this Indenture or in
the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of (and premium, if any)
and interest on the Debentures as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the Company other than
the holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the holder of any Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article IV of the holders of Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article IV, the Trustee, subject to the provisions of Section 8.1, and the
holders of the Debentures shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which
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such dissolution, winding-up, liquidation or reorganization proceedings are
pending, or a certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, delivered to
the Trustee or to the holders of the Debentures, for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article IV.
Section 4.4 Authorization by Debentureholders. Each holder of a Debenture
by his acceptance thereof authorizes and directs the Trustee in his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article IV and appoints the Trustee his
attorney-in-fact for any and all such purposes.
Section 4.5 Notice to Trustee. The Company shall give prompt written notice
to a Responsible Officer of the Trustee of any fact known to the Company which
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of this Article IV.
Notwithstanding the provisions of this Article IV or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment of monies to or by the
Trustee in respect of the Debentures pursuant to the provisions of this Article
IV, unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Principal Office of the Trustee from the Company
or a holder or holders of Senior Indebtedness or from any trustee therefor; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 8.1, shall be entitled in all respects to assume that no
such facts exist; provided that if on a date not fewer than three business days
prior to the date upon which by the terms hereof any such monies may become
payable for any purpose (including, without limitation, the payment of the
principal of (or premium, if any) or interest on any Debenture) the Trustee
shall not have received, with respect to such monies, the notice provided for in
this Section 4.5, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
monies and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary which may be received by it
on or after such prior date.
Notwithstanding anything to the contrary herein set forth, nothing shall
prevent any payment by the Company or the Trustee to the Debentureholders of
monies (A) in connection with a redemption of Debentures if (i) notice of such
redemption has been given pursuant to Article III or Section 13.1 hereof prior
to the receipt by the Trustee of written notice as aforesaid, and (ii) such
notice of redemption is given not earlier than 60 days before the date fixed for
redemption; and (B) in connection with a repayment of a Debenture pursuant to
Article III if, prior to the receipt by the Trustee of a written notice as
aforesaid, the Company has given notice of a Fundamental Change.
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The Trustee, subject to the provisions of Section 8.1, shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of Senior Indebtedness or
a trustee on behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article IV, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article IV, and if
such evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 4.6 Trustee's Relation to Senior Indebtedness. The Trustee in its
individual capacity shall be entitled to all the rights set forth in this
Article IV in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing or elsewhere
in this Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article IV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 8.1, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to holders of Debentures,
the Company or any other Person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article IV or otherwise.
Section 4.7 No Impairment of Subordination. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
Section 4.8 Certain Conversions Deemed Payment. For the purposes of this
Article IV only, (1) the issuance and delivery of junior securities upon
conversion of Debentures in accordance with Article XV shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest on Debentures or on account of the purchase or other
acquisition of Debentures, and (2) the payment, issuance or delivery of cash
(except in satisfaction of fractional shares pursuant to Section 15.2), property
or securities (other than junior securities) upon conversion of a Debenture
shall be deemed to constitute payment on account of the principal of such
Debenture. For the purposes of this Section 4.8, the term "junior
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securities" means (a) shares of any stock of any class of the Company, or (b)
securities of the Company which are subordinated in right of payment to all
Senior Indebtedness which may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Debentures are so subordinated as provided in this Article. Nothing
contained in this Article IV or elsewhere in this Indenture or in the Debentures
is intended to or shall impair, as among the Company, its creditors (other than
holders of Senior Indebtedness) and the Debentureholders, the right, which is
absolute and unconditional, of the holder of any Debenture to convert such
Debenture in accordance with Article XV.
Section 4.9 Senior Indebtedness Entitled to Rely. The holders of Senior
Indebtedness shall have the right to rely upon this Article IV, and no amendment
or modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1 Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any, and interest on each of the Debentures at
the places, at the respective times and in the manner provided herein and in the
Debentures. Each installment of interest on the Debentures due on any
semi-annual interest payment date may be paid either (i) by check mailed to the
address of the Person entitled thereto as it appears on the Register or (ii) by
wire transfer for immediately available funds to an account maintained by such
Person located in the United States; provided, however, that payments to the
Depositary will be made by wire transfer of immediately available funds to the
account of the Depositary or its nominee.
Section 5.2 Offices for Notices and Payments. So long as any of the
Debentures remain outstanding, the Company will maintain in New York, New York,
an office or agency where the Debentures may be presented for payment, and an
office or agency where the Debentures may be presented for registration of
transfer and for exchange and conversion as provided for in this Indenture and
an office or agency where notices and demands to or upon the Company in respect
of the Debentures or of this Indenture may be served. The Company will give to
the Trustee written notice of the location of each such office or agency and of
any change in the location thereof. If the Company shall fail to maintain any
such office or agency or shall fail to give such notice of the location or of
any change in the location thereof, presentations and demands may be made and
notices may be served at the Principal Office of the Trustee.
The Company may also from time to time designate co-registrars and one or
more other offices or agencies where the Debentures may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt
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written notice of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent,
Debenture registrar, Custodian and conversion agent, and the Principal Office of
the Trustee as the office of the Company for each of the aforesaid purposes.
So long as the Trustee is the Debenture registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the
third paragraph of Section 8.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall only mail such notices to the
Company and the holders of Debentures it can identify from its records.
Section 5.3 Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.9, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 5.4 Provisions as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the Trustee, it
will cause such paying agent to execute and deliver to the Trustee an instrument
in which such agent shall agree with the Trustee, subject to the provisions of
this Section 5.4:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the
Debentures (whether such sums have been paid to it by the Company or
by any other obligor on the Debentures) in trust for the benefit of
the holders of the Debentures;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Debentures) to make any
payment of the principal of and premium, if any, or interest on the
Debentures when the same shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Debentures, deposit with the paying
agent a sum sufficient to pay such principal, premium, if any, or interest,
and (unless such paying agent is the Trustee) the Company will promptly
notify the Trustee of any failure to take such action.
(b) If the Company shall act as its own paying agent, it will, on or before
each due date of the principal of, premium, if any, or interest on the
Debentures, set aside, segregate and
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hold in trust for the benefit of the holders of the Debentures a sum sufficient
to pay such principal, premium, if any, or interest so becoming due and will
notify the Trustee of any failure to take such action and of any failure by the
Company (or by any other obligor under the Debentures) to make any payment of
the principal of, premium, if any, or interest on the Debentures when the same
shall become due and payable.
(c) Anything in this Section 5.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 5.4, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such money.
(d) Anything in this Section 5.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.4 is subject to
Sections 13.3 and 13.4.
Section 5.5 Corporate Existence. Subject to Article XII, the Company will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence.
Section 5.6 Rule 144A Information Requirement. Within the period prior to
the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Debentures or any Common Stock issued upon conversion
thereof which continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Debentures or such Common Stock from
such holder or beneficial holder, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any holder or beneficial
holder of the Debentures or such Common Stock and it will take such further
action as any holder or beneficial holder of such Debentures or such Common
Stock may reasonably request, all to the extent required from time to time to
enable such holder or beneficial holder to sell its Debentures or Common Stock
without registration under the Securities Act within the limitation of the
exemption provided by Rule 144A, as such Rule may be amended from time to time.
Upon the request of any holder or any beneficial holder of the Debentures or
such Common Stock, the Company will deliver to such holder a written statement
as to whether it has complied with such requirements.
Section 5.7 Stay, Extension and Usury Laws. The Company covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law or other law which would prohibit or forgive
the Company from paying all or any portion of the principal of or interest on
the Debentures as contemplated herein, wherever enacted, now or at any time
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hereafter in force, or which may affect the covenants or the performance of this
Indenture and the Company (to the extent it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not,
by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law has been enacted.
ARTICLE VI
DEBENTUREHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 6.1 Debentureholders' Lists. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, semiannually, not more
than fifteen (15) days after each June 15 and December 15 in each year beginning
with January 1, 1997, and at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any such
request, a list in such form as the Trustee may reasonably require of the names
and addresses of the holders of Debentures as of a date not more than fifteen
days prior to the time such information is furnished, except that no such list
need be furnished so long as the Trustee is acting as Debenture registrar.
Section 6.2 Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debentures contained in the most recent list furnished to it as provided in
Section 6.1 or maintained by the Trustee in its capacity as Debenture registrar
in respect of the Debentures, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 6.1 upon receipt of a new list so
furnished.
(b) The rights of Debentureholders to communicate with other holders of
Debentures with respect to their rights under this Indenture or under the
Debentures, and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.
(c) If the Trustee shall be required by law to disclose any information
contained in any list of Debentureholders maintained by it, then each and every
holder of the Debentures by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any paying
agent nor the Debenture registrar shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Debentures
made pursuant to the Trust Indenture Act.
Section 6.3 Reports by Trustee.
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(a) Within 60 days after May 15 of each year commencing with the year 1997,
the Trustee shall transmit to holders of Debentures such reports dated as of May
15 of the year in which such reports are made concerning the Trustee and its
actions under this Indenture as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
(b) A copy of such report shall, at the time of such transmission to
holders of Debentures, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Debentures are listed and with the
Company. The Company will notify the Trustee in writing within a reasonable time
when the Debentures are listed on any stock exchange or automated quotation
system.
Section 6.4 Reports by Company. The Company shall file with the Trustee
(and the Commission if at any time after the Indenture becomes qualified under
the Trust Indenture Act), and transmit to holders of Debentures, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act; provided that any such information, documents or
reports required to be filed with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act shall be filed with the Trustee within 15 days after the
same is so required to be filed with the Commission.
ARTICLE VII
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
IN THE EVENT OF DEFAULT
Section 7.1 Events of Default. In case one or more of the following Events
of Default (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall have occurred and be continuing:
(a) default in the payment of any installment of interest upon any of
the Debentures as and when the same shall become due and payable, and
continuance of such default for a period of thirty (30) days, whether or
not such payment is permitted under Article IV hereof; or
(b) default in the payment of the principal of and premium, if any, on
any of the Debentures as and when the same shall become due and payable
either at maturity or in connection with any redemption or repayment
pursuant to Article III, by acceleration or otherwise, whether or not such
payment is permitted under Article IV hereof; or
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(c) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the
Debentures or in this Indenture (other than a covenant or agreement a
default in whose performance or whose breach is elsewhere in this Section
7.1 specifically dealt with) continued for a period of forty-five (45) days
after the date on which written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the
Trustee, or to the Company and the Trustee by the holders of at least
twenty-five (25) percent in aggregate principal amount of the Debentures at
the time outstanding determined in accordance with Section 9.4; or
(d) the Company shall have commenced a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect
to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian, or other similar official of it or any
substantial part of its property, or shall have consented to any such
relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or
(e) an involuntary case or other proceeding shall be commenced against
the Company seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of ninety
(90) consecutive days;
then and in each and every such case, unless the principal of all of the
Debentures shall have already become due and payable, either the Trustee or the
holders of not less than 25 percent in aggregate principal amount of the
Debentures then outstanding hereunder determined in accordance with Section 9.4,
by notice in writing to the Company (and to the Trustee if given by
Debentureholders), may declare the principal of all the Debentures and the
interest accrued thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Debentures contained to the contrary
notwithstanding. This provision, however, is subject to the condition that if,
at any time after the principal of the Debentures shall have been so declared
due and payable, and before any judgment or decree for the payment of the monies
due shall have been obtained or entered as hereinafter provided, the Company
shall pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Debentures and the principal of and
premium, if any, on any and all Debentures which shall have become due otherwise
than by acceleration (with interest on overdue installments of interest (to the
extent that payment of such interest is enforceable under applicable law) and on
such principal and premium, if any, at the rate borne by the Debentures, to the
date of such payment or deposit) and
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amounts due to the Trustee pursuant to Section 8.6, and if any and all defaults
under this Indenture, other than the nonpayment of principal of and premium, if
any, and accrued interest on Debentures which shall have become due by
acceleration, shall have been cured or waived pursuant to Section 7.7 -- then
and in every such case the holders of a majority in aggregate principal amount
of the Debentures then outstanding, by written notice to the Company and to the
Trustee, may waive all defaults or Events of Default and rescind and annul such
declaration and its consequences; but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or Event of Default, or
shall impair any right consequent thereon. The Trustee shall not be charged with
knowledge and shall not be deemed to have notice of any default or Event of
Default, except an Event of Default under Section 7.1(a) or (b) in cases where
the Trustee is acting as paying agent, unless written notice thereof stating
that such notice is a "Notice of Default" shall have been given to a Responsible
Officer by the Company or a Debentureholder or any agent of a Debentureholder;
and, in the absence of such written notice, the Trustee may conclusively assume
that there is no default or Event of Default.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Debentures, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Debentures, and the Trustee
shall continue as though no such proceeding had been taken.
Section 7.2 Payment of Debentures on Default; Suit Therefor. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Debentures as and when the same shall
become due and payable, and such default shall have continued for a period of
thirty (30) days, or (b) in case default shall be made in the payment of the
principal of or premium, if any, on any of the Debentures as and when the same
shall have become due and payable, whether at maturity of the Debentures, or in
connection with any repayment of a Debenture pursuant to Article III or in
connection with any redemption, by declaration or otherwise -- then, upon demand
of the Trustee, the Company will pay to the Trustee, for the benefit of the
holders of the Debentures, the whole amount that then shall have become due and
payable on all such Debentures for principal and premium, if any, or interest,
or both, as the case may be, with interest upon the overdue principal and
premium, if any, and (to the extent that payment of such interest is enforceable
under applicable law) upon the overdue installments of interest at the rate
borne by the Debentures; and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith. Until such demand by the Trustee, the Company may
pay the principal of and premium, if any, and interest on the Debentures to the
registered holders, whether or not the Debentures are overdue.
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In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on the Debentures wherever situated the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Debentures under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other similar judicial proceedings
relative to the Company or such other obligor upon the Debentures, or to the
creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Debentures shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 7.2, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal, premium, if any, and interest owing and unpaid in respect
of the Debentures, and, in case of any judicial proceedings, to file such proofs
of claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee and of the Debentureholders allowed in such
judicial proceedings relative to the Company or any other obligor on the
Debentures, its or their creditors, or its or their property, and to collect and
receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of any amounts due the Trustee
under Section 8.6; and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby authorized
by each of the Debentureholders to make such payments to the Trustee, and, in
the event that the Trustee shall consent to the making of such payments directly
to the Debentureholders, to pay to the Trustee any amount due it for
compensation, expenses, advances and disbursements including counsel fees
incurred by it up to the date of such distribution. To the extent that such
payment of reasonable compensation, expenses, advances and disbursements out of
the estate in any such proceedings shall be denied for any reason, payment of
the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, monies, securities and other property which the
holders of the Debentures may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or adopt on behalf of any Debentureholder any plan of
reorganization or arrangement, affecting the Debentures or the rights of any
Debentureholder, or to authorize the Trustee to vote in respect of the claim of
any Debentureholder in any such proceeding.
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All rights of action and of asserting claims under this Indenture, or under
any of the Debentures, may be enforced by the Trustee without the possession of
any of the Debentures, or the production thereof for any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the holders of the Debentures.
In any proceedings brought by the Trustee (and in any proceedings involving
the interpretation of any provision of this Indenture to which the Trustee shall
be a party) the Trustee shall be held to represent all the holders of the
Debentures, and it shall not be necessary to make any holders of the Debentures
parties to any such proceedings.
Section 7.3 Application of Monies Collected by Trustee. Any monies
collected by the Trustee pursuant to this Article VII shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Debentures, and stamping
thereon the payment, if only partially paid, and upon surrender thereof if fully
paid:
First: To the payment of all amounts due the Trustee under Section
8.6;
Second: Subject to the provisions of Article IV, in case the principal
of the outstanding Debentures shall not have become due and be unpaid, to
the payment of interest on the Debentures in default in the order of the
maturity of the installments of such interest, with interest (to the extent
that such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate borne by the Debentures, such payments
to be made ratably to the Persons entitled thereto;
Third: Subject to the provisions of Article IV, in case the principal
of the outstanding Debentures shall have become due, by declaration or
otherwise, and be unpaid to the payment of the whole amount then owing and
unpaid upon the Debentures for principal and premium, if any, and interest,
with interest on the overdue principal and premium, if any, and (to the
extent that such interest has been collected by the Trustee) upon overdue
installments of interest at the rate borne by the Debentures; and in case
such monies shall be insufficient to pay in full the whole amounts so due
and unpaid upon the Debentures, then to the payment of such principal and
premium, if any, and interest without preference or priority of principal
and premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other
installment of interest, or of any Debenture over any other Debenture,
ratably to the aggregate of such principal and premium, if any, and accrued
and unpaid interest; and
Fourth: Subject to the provisions of Article IV, to the payment of the
remainder, if any, to the Company or any other Person lawfully entitled
thereto.
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Section 7.4 Proceedings by Debentureholder. No holder of any Debenture
shall have any right by virtue of or by availing of any provision of this
Indenture to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than a majority
in aggregate principal amount of the Debentures then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for sixty (60)
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 7.7; it being understood and intended, and being
expressly covenanted by the taker and holder of every Debenture with every other
taker and holder and the Trustee, that no one or more holders of Debentures
shall have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Debentures, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Debentures (except as otherwise provided
herein). For the protection and enforcement of this Section 7.4, each and every
Debentureholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provisions of this Indenture and any provision of
any Debenture, the right of any holder of any Debenture to receive payment of
the principal of and premium, if any, and interest on such Debenture, on or
after the respective due dates expressed in such Debenture, or to institute suit
for the enforcement of any such payment on or after such respective dates
against the Company shall not be impaired or affected without the consent of
such holder.
Anything in this Indenture or the Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in his own behalf and for his own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.
Section 7.5 Proceedings by Trustee. In case of an Event of Default
hereunder the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this
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Indenture, or to enforce any other legal or equitable right vested in the
Trustee by this Indenture or by law.
Section 7.6 Remedies Cumulative and Continuing. Except as provided in
Section 2.6, all powers and remedies given by this Article VII to the Trustee or
to the Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Debentures to exercise any right
or power accruing upon any default or Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 7.4, every power and remedy given by this Article VII or
by law to the Trustee or to the Debentureholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Debentureholders.
Section 7.7 Direction of Proceedings and Waiver of Defaults by Majority of
Debentureholders. The holders of a majority in aggregate principal amount of the
Debentures at the time outstanding determined in accordance with Section 9.4
shall have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided, however, that (subject to the
provisions of Section 8.1) the Trustee shall have the right to decline to follow
any such direction if the Trustee shall be advised by counsel that the action or
proceeding so directed may not lawfully be taken or if the Trustee in good faith
by its board of directors or executive committee, or a trust committee of
directors and/or Responsible Officers shall determine that the action or
proceedings so directed could involve the Trustee in personal liability. Prior
to any declaration accelerating the maturity of the Debentures, the holders of a
majority in aggregate principal amount of the Debentures at the time outstanding
may on behalf of the holders of all of the Debentures waive any past default or
Event of Default hereunder and its consequences except (i) a default in the
payment of interest or premium, if any, on, or the principal of, the Debentures,
(ii) a failure by the Company to convert any Debentures into Common Stock, (iii)
a default in the payment of redemption or repayment price pursuant to Article
III or (iv) a default in respect of a covenant or provision hereof which under
Article XI cannot be modified or amended without the consent of the holders of
all Debentures then outstanding. Upon any such waiver the Company, the Trustee
and the holders of the Debentures shall be restored to their former positions
and rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Whenever any default or Event of Default hereunder shall have been
waived as permitted by this Section 7.7, said default or Event of Default shall
for all purposes of the Debentures and this Indenture be deemed to have been
cured and to be not continuing; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
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Section 7.8 Notice of Defaults. The Trustee shall, within ninety (90) days
after the occurrence of a default, mail to all Debentureholders, as the names
and addresses of such holders appear upon the Register, notice of all defaults
known to the Trustee, unless such defaults shall have been cured or waived
before the giving of such notice (the term "defaults" for the purpose of this
Section 7.8 being hereby defined to be the events specified in clauses (a), (b),
(c), (d) and (e) of Section 7.1, not including periods of grace, if any, or the
giving of any notice, or both provided for therein); and provided that, except
in the case of default in the payment of the principal of or premium, if any, or
interest on any of the Debentures, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee,
or a trust committee of directors and/or Responsible Officers of the Trustee in
good faith determine that the withholding of such notice is in the interests of
the Debentureholders.
Section 7.9 Undertaking to Pay Costs. All parties to this Indenture agree,
and each holder of any Debenture by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; provided, that the provisions of this Section 7.9 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any
Debentureholder, or group of Debentureholders, holding in the aggregate more
than ten percent in principal amount of the Debentures at the time outstanding
determined in accordance with Section 9.4, or to any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of or
premium, if any, or interest on any Debenture on or after the due date expressed
in such Debenture or to any suit for the enforcement of the right to convert any
Debenture in accordance with the provisions of Article XV.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties and Responsibilities of Trustee. The Trustee, prior to
the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
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No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture and the Trust
Indenture Act, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Indenture and no implied covenants or obligations shall
be read into this Indenture and the Trust Indenture Act against the
Trustee; and
(2) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the holders of not less than a majority in principal amount of the
Debentures at the time outstanding determined as provided in Section 9.4
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and
(d) whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this
Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
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Section 8.2 Reliance on Documents, Opinions, Etc. Except as otherwise
provided in Section 8.1,
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, coupon or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or the Treasurer of the Company;
(c) the Trustee may consult with counsel and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, debenture, coupon or other paper
or document unless requested in writing to do so by the holders of not less
than a majority in principal amount of the Debentures then outstanding;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable indemnity
against such expense or liability as a condition to so proceeding; the
reasonable expenses of every such examination shall be paid by the Company
or, if paid by the Trustee or any predecessor Trustee, shall be repaid by
the Company upon demand; and
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(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due
care hereunder.
Section 8.3 No Responsibility for Recitals, Etc. The recitals contained
herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any Debentures authenticated
and delivered by the Trustee in conformity with the provisions of this
Indenture.
Section 8.4 Trustee, Paying Agents, Conversion Agents or Registrar May Own
Debentures. The Trustee, any paying agent, any conversion agent or Debenture
registrar, in its individual or any other capacity, may become the owner or
pledgee of Debentures with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Debenture registrar.
Section 8.5 Monies to Be Held in Trust. Subject to the provisions of
Section 13.4 and Section 4.2, all monies received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder;
provided, however, if interest is earned on such monies, the Trustee shall pay
such interest earned to the Company.
Section 8.6 Compensation and Expenses of Trustee. The Company covenants and
agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by it hereunder
in any capacity (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
the Trustee for, and to hold it harmless against, any loss, liability or expense
(including attorneys' fees and expenses) incurred without negligence or bad
faith on the part of the Trustee and arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
enforcing the Indenture against the Company (including this Section 8.6) and
defending itself against or investigating any claim (whether asserted by the
Company, any holder or other Person). The obligations of the Company under this
Section 8.6 to compensate or indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall be secured by a lien
prior to that of the Debentures
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upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the holders of particular Debentures. The
obligation of the Company under this Section 8.6 and the liens created hereunder
shall survive the resignation or removal of the Trustee, the satisfaction and
discharge of this Indenture and the termination of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 7.1(d) or (e) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
bankruptcy law.
Section 8.7 Officers' Certificate and Opinion of Counsel as Evidence.
Whenever in the administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established
prior to taking or omitting any action hereunder, such matter (unless additional
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate or an Opinion of
Counsel or both delivered to the Trustee, such certificate or opinion, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken or omitted by it under the
provisions of this Indenture upon the faith thereof.
Section 8.8 Conflicting Interests of Trustee. If the Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Trustee shall either eliminate such interest or resign, to the extent and in
the manner provided by, and subject to the provisions of, the Trust Indenture
Act and this Indenture.
Section 8.9 Eligibility of Trustee. There shall at all times be a Trustee
hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 8.10 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written notice of such
resignation to the Company and by mailing notice thereof to the holders of
Debentures at their addresses as they shall appear on the Register. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
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resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment within sixty (60)
days after the mailing of such notice of resignation to the Debentureholders,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Debentureholder who has been a bona
fide holder of a Debenture or Debentures for at least six months may, subject to
the provisions of Section 7.9, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall cease to be eligible in accordance with the
provisions of Section 8.8 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder, or
(2) the Trustee shall become incapable of acting, or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.9, any Debentureholder who has been a bona fide holder
of a Debenture or Debentures for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten (10) days after notice to the Company of such
nomination the Company objects thereto, in which case the Trustee so removed or
any Debentureholder, upon the terms and conditions and otherwise as in Section
8.10(a) provided, may petition any court of competent jurisdiction for an
appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.
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Section 8.11 Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the provisions of Section
8.6, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by such
trustee as such trustee to secure any amounts then due it pursuant to the
provisions of Section 8.6.
No successor trustee shall accept appointment as provided in this Section
8.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.11, the Company (or the former trustee) shall mail or cause to be
mailed notice of the succession of such trustee hereunder to the holders of
Debentures at their addresses as they shall appear on the Register. If the
Company fails to mail such notice within ten (10) days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
Section 8.12 Succession by Merger, Etc. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the trust business of the Trustee (including any trust created by this
Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the trust business of the Trustee such corporation shall
be qualified under the provisions of Section 8.8 and eligible under the
provisions of Section 8.9.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee or authenticating agent
appointed by such predecessor trustee, and deliver such Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor to the Trustee or an authenticating agent
appointed by such successor trustee may
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authenticate such Debentures either in the name of any predecessor trustee
hereunder or in the name of the successor trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Debentures or
in this Indenture provided that the certificate of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication of
any predecessor Trustee or authenticate Debentures in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
Section 8.13 Limitation on Rights of Trustee as Creditor. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Debentures), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
ARTICLE IX
CONCERNING THE DEBENTUREHOLDERS
Section 9.1 Action by Debentureholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Debentures may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action, the holders
of such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Debentures voting in favor thereof at any meeting
of Debentureholders duly called and held in accordance with the provisions of
Article X, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Debentures, the
Company or the Trustee may fix in advance of such solicitation, a date as the
record date for determining holders entitled to take such action. The record
date shall be not more than fifteen (15) days prior to the date of commencement
of solicitation of such action.
Section 9.2 Proof of Execution by Debentureholders. Subject to the
provisions of Sections 8.1, 8.2 and 10.5, proof of the execution of any
instrument by a Debentureholder or his agent or proxy shall be sufficient if
made in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Debentures shall be proved by the registry of such
Debentures or by a certificate of the Debenture registrar.
The record of any Debentureholders' meeting shall be proved in the manner
provided in Section 10.6.
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Section 9.3 Who Are Deemed Absolute Owners. The Company, the Trustee, any
paying agent, any conversion agent and any Debenture registrar may deem the
Person in whose name such Debenture shall be registered upon the Register to be,
and may treat him as, the absolute owner of such Debenture (whether or not such
Debenture shall be overdue and notwithstanding any notation of ownership or
other writing thereon made by anyone other than the Company or any Debenture
registrar) for the purpose of receiving payment of or on account of the
principal of and premium, if any, and interest on such Debenture, for conversion
of such Debenture and for all other purposes; and neither the Company nor the
Trustee nor any other authenticating agent nor any paying agent nor any
conversion agent nor any Debenture registrar shall be affected by any notice to
the contrary. All such payments so made to any holder for the time being, or
upon his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Debenture.
Section 9.4 Company-Owned Debentures Disregarded. In determining whether
the holders of the requisite aggregate principal amount of Debentures have
concurred in any direction, consent, waiver or other action under this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures or any Affiliate of the Company or any other obligor on the
Debentures shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent, waiver
or other action only Debentures which a Responsible Officer knows are so owned
shall be so disregarded. Debentures so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this Section 9.4 if the
pledgee shall establish to the satisfaction of the Trustee the pledgee's right
to vote such Debentures and that the pledgee is not the Company, any other
obligor on the Debentures or any Affiliate of the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Debentures, if any, known by
the Company to be owned or held by or for the account of any of the above
described persons; and, subject to Section 8.1, the Trustee shall be entitled to
accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Debentures not listed therein are outstanding
for the purpose of any such determinations.
Section 9.5 Revocation of Consents; Future Holders Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Debentures specified in this Indenture in connection
with such action, any holder of a Debenture which is shown by the evidence to be
included in the Debentures the holders of which have consented to such action
may, by filing written notice with the Trustee at its Principal Office and upon
proof of holding as provided in Section 9.2, revoke such action so far as
concerns such Debenture. Except as aforesaid, any such action taken by the
holder of any Debenture shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debenture and of any Debentures
issued in exchange or substitution therefor, irrespective of whether any
notation in
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regard thereto is made upon such Debenture or any Debenture issued in exchange
or substitution therefor.
ARTICLE X
DEBENTUREHOLDERS' MEETINGS
Section 10.1 Purposes of Meetings. A meeting of Debentureholders may be
called at any time and from time to time pursuant to the provisions of this
Article X for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to give any
directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to
be taken by Debentureholders pursuant to any of the provisions of Article
VII;
(2) to remove the Trustee and nominate a successor trustee pursuant to
the provisions of Article VIII;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2; or
(4) to take any other action authorized to be taken by or on behalf of
the holders of any specified aggregate principal amount of the Debentures
under any other provision of this Indenture or under applicable law.
Section 10.2 Call of Meetings by Trustee. The Trustee may at any time call
a meeting of Debentureholders to take any action specified in Section 10.1, to
be held at such time and at such place as the Trustee shall determine. Notice of
every meeting of the Debentureholders, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting and the establishment of any record date pursuant to Section 9.1, shall
be mailed to holders of Debentures at their addresses as they shall appear on
the Register. Such notice shall also be mailed to the Company. Such notices
shall be mailed not less than twenty (20) nor more than ninety (90) days prior
to the date fixed for the meeting.
Any meeting of Debentureholders shall be valid without notice if the
holders of all Debentures then outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the holders of all Debentures
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
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Section 10.3 Call of Meetings by Company or Debentureholders. In case at
any time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent in aggregate principal amount of the Debentures
then outstanding, shall have requested the Trustee to call a meeting of
Debentureholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within twenty (20) days after receipt of such
request, then the Company or such Debentureholders may determine the time and
the place for such meeting and may call such meeting to take any action
authorized in Section 10.1, by mailing notice thereof as provided in Section
10.2.
Section 10.4 Qualifications for Voting. To be entitled to vote at any
meeting of Debentureholders a Person shall (a) be a holder of one or more
Debentures or (b) be a Person appointed by an instrument in writing as proxy by
a holder of one or more Debentures. The only Persons who shall be entitled to be
present or to speak at any meeting of Debentureholders shall be the Persons
entitled to vote at such meeting and their counsel and any representatives of
the Trustee and its counsel and any representatives of the Company and its
counsel.
Section 10.5 Regulations. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Debentureholders as provided in Section 10.3, in which case the
Company or the Debentureholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote at the meeting.
Subject to the provisions of Section 9.4, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Debentures held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Debenture
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debentures held by him or instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Debentureholders. Any
meeting of Debentureholders duly called pursuant to the provisions of Section
10.2 or 10.3 may be adjourned from time to time by a majority of those present,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
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Section 10.6 Voting. The vote upon any resolution submitted to any meeting
of Debentureholders shall be by written ballot on which shall be subscribed the
signatures of the holders of Debentures or of their representatives by proxy and
the principal amount of the Debentures held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Debentureholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 10.2. The record shall show the principal amount of the
Debentures voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7 No Delay of Rights by Meeting. Nothing in this Article X
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Debentureholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Debentureholders under any of the provisions of this Indenture or of the
Debentures.
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1 Supplemental Indentures Without Consent of Debentureholders.
The Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of the
holders of Debentures pursuant to the requirements of Section 15.6 and the
repayment obligations of the Company pursuant to the requirements of
Section 3.6(e);
(b) subject to Article IV, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Debentures, any property or
assets;
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(c) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Company pursuant to
Article XII;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Debentures, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default;
(e) to provide for the issuance under this Indenture of Debentures in
coupon form (including Debentures registrable as to principal only) and to
provide for exchangeability of such Debentures with the Debentures issued
hereunder in fully registered form and to make all appropriate changes for
such purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture which shall not adversely
affect the interests of the holders of the Debentures in any material
respect;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Debentures; or
(h) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
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Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time outstanding, notwithstanding any of
the provisions of Section 11.2.
Section 11.2 Supplemental Indentures with Consent of Debentureholders. With
the consent (evidenced as provided in Article IX) of the holders of not less
than 66 2/3% in aggregate principal amount of the Debentures at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the holders of the Debentures; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Debenture, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or premium, if any, thereon, or reduce any amount
payable on redemption or on repayment thereof, or impair or affect the right of
any Debentureholder to institute suit for the payment thereof, or make the
principal thereof or interest or premium, if any, thereon payable in any coin or
currency other than that provided in the Debentures, or modify the provisions of
this Indenture with respect to the subordination of the Debentures in a manner
adverse to the Debentureholders, or change the obligation of the Company to make
repayment of any Debenture pursuant to Section 3.5 or 3.6 in a manner adverse to
the holder of Debentures, or impair the right to convert the Debentures into
Common Stock subject to the terms set forth herein, including Section 15.6,
without the consent of the holder of each Debenture so affected, or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of all Debentures then outstanding.
Upon the request of the Company, accompanied by a copy of the resolutions
of the Board of Directors certified by its Secretary or Treasurer authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of Debentureholders as aforesaid, the Trustee
shall join with the Company in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Debentureholders under
this Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 11.3 Effect of Supplemental Indenture. Any supplemental indenture
executed pursuant to the provisions of this Article XI shall comply with the
Trust Indenture Act, as then in effect; provided that this Section 11.3 shall
not require such supplemental indenture or the Trustee to be qualified under the
Trust Indenture Act prior to the time such qualification is in fact required
under the terms of the Trust Indenture Act or the Indenture has been qualified
under
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the Trust Indenture Act, nor shall it constitute any admission or acknowledgment
by any party to such supplemental indenture that any such qualification is
required prior to the time such qualification is in fact required under the
terms of the Trust Indenture Act or the Indenture has been qualified under the
Trust Indenture Act. Upon the execution of any supplemental indenture pursuant
to the provisions of this Article XI, this Indenture shall be and be deemed to
be modified and amended in accordance therewith and the respective rights,
limitation of rights, obligations, duties and immunities under this Indenture of
the Trustee, the Company and the holders of Debentures shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 11.4 Notation on Debentures. Debentures authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article XI may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Debentures so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may be prepared and
executed by the Company, authenticated by the Trustee (or an authenticating
agent duly appointed by the Trustee pursuant to Section 16.11) and delivered in
exchange for the Debentures then outstanding, upon surrender of such Debentures
then outstanding.
Section 11.5 Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee. The Trustee, subject to the provisions of Sections 8.1 and
8.2, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article XI.
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1 Company May Consolidate Etc. on Certain Terms. Subject to the
provisions of Section 12.2, nothing contained in this Indenture or in any of the
Debentures shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance or lease (or successive sales, conveyances or leases) of all or
substantially all of the property of the Company, to any other corporation
(whether or not affiliated with the Company) authorized to acquire and operate
the same and which shall be organized under the laws of a State of the United
States or the District of Columbia; however, and the Company hereby covenants
and agrees, that upon any such consolidation, merger, sale, conveyance or lease,
the due and punctual payment of the principal of and premium, if any, and
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interest on all of the Debentures, according to their tenor, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by the Company, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the corporation (if other than the Company) formed
by such consolidation, or into which the Company shall have been merged, or by
the corporation which shall have acquired or leased such property, and such
supplemental indenture shall provide for the applicable conversion rights set
forth in Section 15.6.
Section 12.2 Successor Corporation to Be Substituted. In case of any such
consolidation, merger, sale, conveyance or lease and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Debentures
and the due and punctual performance of all of the covenants and conditions of
this Indenture to be performed by the Company, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of Omnicom Group Inc. any or all of the Debentures issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation instead of the
Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause
to be authenticated and delivered, any Debentures which previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Debentures which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All the
Debentures so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Debentures theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof. In the event of any such
consolidation, merger, sale, conveyance or lease, the Person named as the
"Company" in the first paragraph of this Indenture or any successor which shall
thereafter have become such in the manner prescribed in this Article XII may be
dissolved, wound up and liquidated at any time thereafter and such Person shall
be released from its liabilities as obligor and maker of the Debentures and from
its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
Section 12.3 Opinion of Counsel to Be Given Trustee. The Trustee shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article XII.
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ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1 Discharge of Indenture. When (a) the Company shall deliver to
the Trustee for cancellation all Debentures theretofore authenticated (other
than any Debentures which shall have been destroyed, lost or stolen and in lieu
of or in substitution for which other Debentures shall have been authenticated
and delivered) and not theretofore canceled, or (b) all the Debentures not
theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee, in trust, funds sufficient to pay at
maturity or upon redemption of all of the Debentures (other than any Debentures
which shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due to such date of maturity or date fixed for redemption, as the case
may be, and if in either case the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture shall cease to
be of further effect (except as to (i) remaining rights of registration of
transfer, substitution and exchange and conversion of Debentures, (ii) rights
hereunder of Debentureholders to receive payments of principal of and premium,
if any, and interest on, the Debentures and the other rights, duties and
obligations of Debentureholders, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee and (iii) the rights, obligations
and immunities of the Trustee hereunder), and the Trustee, on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel as
required by Section 16.5 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture; the Company, however, hereby agreeing to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
and to compensate the Trustee for any services thereafter reasonably and
properly rendered by the Trustee in connection with this Indenture or the
Debentures.
Section 13.2 Deposited Monies to Be Held in Trust by Trustee. Subject to
Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1,
shall be held in trust and applied by it to the payment, either directly or
through any paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Debentures for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest and premium, if
any.
Section 13.3 Paying Agent to Repay Monies Held. Upon the satisfaction and
discharge of this Indenture, all monies then held by any paying agent of the
Debentures (other than the Trustee) shall, upon demand of the Company, be repaid
to it or paid to the Trustee, and
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thereupon such paying agent shall be released from all further liability with
respect to such monies.
Section 13.4 Return of Unclaimed Monies. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of, premium, if any, or interest on Debentures and not applied but
remaining unclaimed by the holders of Debentures for two years after the date
upon which the principal of, premium, if any, or interest on such Debentures, as
the case may be, shall have become due and payable, shall be repaid to the
Company by the Trustee on demand and all liability of the Trustee shall
thereupon cease with respect to such monies; and the holder of any of the
Debentures shall thereafter look only to the Company for any payment which such
holder may be entitled to collect.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 14.1 Indenture and Debentures Solely Corporate Obligations. No
recourse for the payment of the principal of or premium, if any, or interest on
any Debenture, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture, or in any Debenture,
or because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, officer or director, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the
Debentures.
ARTICLE XV
CONVERSION OF DEBENTURES
Section 15.1 Right to Convert. Subject to and upon compliance with the
provisions of this Article, the holder of any Debenture shall have the right, at
his option, at any time after ninety (90) days following the latest date of
original issuance and prior to the close of business on January 2, 2007 (except
that, with respect to any Debenture or portion of a Debenture which shall be
called for redemption such right shall terminate, except as provided in Section
15.2 or Section 3.4, at the close of business on the Business Day next preceding
the date fixed for redemption of such Debenture or portion of a Debenture unless
the Company shall default in payment due upon redemption thereof) to convert the
principal amount of any such
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Debenture, or any portion of such principal amount which is $1,000 or a multiple
thereof, into that number of fully paid and non-assessable shares of Common
Stock (as such shares shall then be constituted) at the date of conversion
obtained, by dividing the principal amount of the Debenture or portion thereof
surrendered for conversion by the Conversion Price in effect at such time, by
surrender of the Debenture so to be converted in whole or in part in the manner
provided, together with any required funds, in Section 15.2. A Debenture in
respect of which a holder is exercising the option to require repayment on the
January 3, 2003 or upon a Fundamental Change may be converted only if such
holder withdraws its election to exercise the option to require repayment in
accordance with Sections 3.5, 3.6 and 3.7 hereof. A holder of Debentures is not
entitled to any rights of a holder of Common Stock until such holder has
converted his Debentures to Common Stock, and only to the extent such Debentures
are deemed to have been converted to Common Stock under this Article XV.
Section 15.2 Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion; No Adjustment for Interest or Dividends. In order to exercise the
conversion privilege with respect to any Debenture in certificated form, the
holder of any such Debenture to be converted in whole or in part shall surrender
such Debenture, duly endorsed, at an office or agency maintained by the Company
pursuant to Section 5.2, accompanied by the funds, if any, required by the
penultimate paragraph of this Section 15.2, and shall give written notice of
conversion in the form provided on the Debentures (or such other notice which is
acceptable to the Company) to the Company at such office or agency that the
holder elects to convert such Debenture or the portion thereof specified in said
notice. Such notice shall also state the name or names (with address) in which
the certificate or certificates for shares of Common Stock which shall be
issuable on such conversion shall be issued, and shall be accompanied by
transfer taxes, if required pursuant to Section 15.7. Each such Debenture
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the registration of such Debenture, be duly
endorsed by, or be accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the holder or its duly authorized attorney.
In order to exercise the conversion privilege with respect to any interest
in a Debenture in global form, the beneficial holder must complete the
appropriate instruction form for conversion pursuant to the Depositary's
book-entry conversion program, deliver by book-entry delivery an interest in
such Debenture in global form, furnish appropriate endorsements and transfer
documents if required by the Company or the Trustee or conversion agent, and pay
the funds, if any, required by this Section 15.2 and any transfer taxes if
required pursuant to Section 15.7.
As promptly as practicable after the surrender of such Debenture and the
receipt of such notice and funds, if any, as aforesaid, the Company shall issue
and shall deliver at such office or agency to such holder, or on his written
order, a certificate or certificates for the number of full shares of Common
Stock issuable upon the conversion of such Debenture or portion thereof in
accordance with the provisions of this Article and a check in payment of any
fractional interest in respect of a share of Common Stock arising upon such
conversion, as provided in Section 15.3.
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In case any Debenture of a denomination greater than $1,000 shall be surrendered
for partial conversion, and subject to Section 2.3, the Company shall execute
and the Trustee shall authenticate and deliver to or upon the written order of
the holder of the Debenture so surrendered, without charge to him, a new
Debenture or Debentures in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to any such
Debenture (or portion thereof) on the date on which the requirements set forth
above in this Section 15.2 have been satisfied as to such Debenture (or portion
thereof), and the Person in whose name any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become on said date the holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the Person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Debenture shall have been surrendered.
The Company's delivery of the fixed number of shares of Common Stock into
which the Debentures are convertible will be deemed to satisfy the Company's
obligation to pay the principal amount of the Debentures and all accrued
interest and original issue discount that has not previously been (or is not
simultaneously being) paid. The Common Stock is treated as issued first in
payment of accrued interest and original issue discount and then in payment of
principal. Thus, accrued interest and original issue discount are treated as
paid rather than canceled.
Any Debenture or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date to the close of business on the Business Day next preceding the following
interest payment date shall (unless such Debenture or portion thereof being
converted shall have been called for redemption on a date fixed for redemption
which occurs during the period from the close of business on such record date to
the close of business on the Business Day next preceding the following interest
payment date) be accompanied by payment, in New York Clearing House funds or
other funds acceptable to the Company, of an amount equal to the interest
otherwise payable on such interest payment date on the principal amount being
converted; provided, however, that no such payment need be made if (i) there
shall exist at the time of conversion a default in the payment of interest on
the Debentures or (ii) the date fixed for redemption is on or after December 29,
2000 but on or before January 3, 2001, the holders who convert on or after
December 26, 2000 will receive, in addition to Common Stock otherwise payable
upon such conversion, accrued interest to, but excluding, January 3, 2001 on the
principal amount of Debentures so converted. An amount equal to such payment
shall be paid by the Company on such interest payment date to the holder of such
Debenture at the close of business on such record date; provided, however, that
if the Company shall default in the payment of interest on such interest payment
date, such amount shall be paid to the Person who made such required payment.
Except as provided above in this
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Section 15.2, no payment or other adjustment shall be made for interest accrued
on any Debenture converted or for dividends on any shares issued upon the
conversion of such Debenture as provided in this Article.
Upon the conversion of an interest in a Debenture in global form, the
Trustee (or other conversion agent appointed by the Company), or the Custodian
at the direction of the Trustee (or other conversion agent appointed by the
Company), shall make a notation on such Debenture in global form as to the
reduction in the principal amount represented thereby. The Company shall notify
the Trustee in writing of any conversions of Debentures effected through any
conversion agent other than the Trustee.
Section 15.3 Payments in Lieu of Fractional Shares. No fractional shares of
Common Stock or scrip representing fractional shares shall be issued upon
conversion of Debentures. If more than one Debenture shall be surrendered for
conversion at one time by the same holder, the number of full shares which shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Debentures (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of stock would be
issuable upon the conversion of any Debenture or Debentures, the Company shall
make an adjustment therefor at the current market value thereof, and such
payment thereof shall be made by check. For these purposes, the current market
value of a share of Common Stock shall be the Closing Price on the first
Business Day immediately preceding the day on which the Debentures (or specified
portions thereof) are deemed to have been converted.
Section 15.4 Conversion Price. The conversion price shall be as specified
in the form of Debenture (herein called the "Conversion Price") attached as
Exhibit A hereto, subject to adjustment as provided in this Article XV.
Section 15.5 Adjustment of Conversion Price. The Conversion Price shall be
adjusted from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend, or make a
distribution, in shares of its Common Stock, on its Common Stock, (ii)
subdivide its outstanding Common Stock into a greater number of shares, or
(iii) combine its outstanding Common Stock into a smaller number of shares,
the Conversion Price in effect immediately prior thereto shall be adjusted
so that the holder of any Debenture thereafter surrendered for conversion
shall be entitled to receive the number of shares of Common Stock of the
Company which he would have owned or have been entitled to receive after
the happening of any of the events described above had such Debenture been
converted immediately prior to the happening of such event. An adjustment
made pursuant to this subsection (a) shall become effective immediately
after the record date in the case of a dividend and shall become effective
immediately after the effective date in the case of subdivision or
combination.
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(b) In case the Company shall issue rights or warrants to all holders
of its Common Stock entitling them (for a period expiring within 45 days
after the record date mentioned below) to subscribe for or purchase Common
Stock at a price per share less than the Current Market Price (as defined
below) at the record date for the determination of stockholders entitled to
receive such rights or warrants, the Conversion Price in effect immediately
prior thereto shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to the date of issuance of such rights or warrants by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants plus the number of shares
which the aggregate offering price of the total number of shares so offered
would purchase at such Current Market Price, and of which the denominator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of additional shares of
Common Stock offered for subscription or purchase. Such adjustment shall be
made successively whenever any such rights or warrants are issued, and
shall become effective immediately after such record date. In determining
whether any rights or warrants entitle the holders to subscribe for or
purchase shares of Common Stock at less than such Current Market Price, and
in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received by the Company
for such rights or warrants, the value of such consideration, if other than
cash, to be determined by the Board of Directors. To the extent that no
shares of Common Stock are so delivered after the expiration of such rights
or warrants, the Conversion Price shall be readjusted to the Conversion
Price which would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants
had not been fixed.
(c) In case the Company shall distribute to all holders of its Common
Stock any shares of any class of capital stock of the Company (other than
Common Stock) or evidences of its indebtedness or assets (excluding cash
dividends or other distributions to the extent paid from retained earnings
of the Company) or rights or warrants to subscribe for or purchase any of
its securities (excluding those referred to in subsection (b) above), then
in each such case the Conversion Price shall be adjusted so that the same
shall equal the Conversion Price determined by multiplying the Conversion
Price in effect immediately prior to the date of such distribution by a
fraction of which the numerator shall be the Current Market Price of the
Common Stock on the record date mentioned below less the fair market value
on such record date (as determined by the Board of Directors of the
Company, whose determination shall be conclusive, and described in a
certificate filed with the Trustee) of the portion of the capital stock or
assets or evidences of indebtedness so distributed or of such rights or
warrants applicable to one share of Common Stock, and the denominator shall
be the Current Market Price of the Common Stock on such record date. For
purposes of this subsection (c) the period for determining the Current
Market Price shall end immediately prior to the date that is the earlier of
the ex-distribution date and the record date referred to below in this
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subsection. Such adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive such
distribution; provided, however, that in the event the numerator shall be
less than one, in lieu of the foregoing adjustment, adequate provision
shall be made so that each holder of Debentures shall have the right to
receive upon conversion the amount of such distribution such holder would
have received had such holder converted each Debenture immediately prior to
the record date. In the event that no such dividend or distribution is so
paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or
distribution had not occurred.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding (x) any quarterly cash
dividend on the Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any fiscal quarter does not exceed the greater of
(A) the amount per share of Common Stock of the next preceding quarterly
cash dividend on the Common Stock to the extent such preceding quarterly
dividend did not require any adjustment of the Conversion Price pursuant to
this subsection (d) (as adjusted to reflect subdivisions or combinations of
the Common Stock), and (B) 3.75% of the average of the Closing Price
(determined in Section 15.5(h)) during the ten Trading Days (as defined in
Section 15.5(h)) next preceding the date of declaration of such dividend
and (y) any dividend or distribution in connection with the liquidation,
dissolution or winding up of the Company, whether voluntary or
involuntary), then, in such case, unless the Company elects to reserve such
cash for distribution to the holders of the Debentures upon the conversion
of the Debentures so that any such holder converting Debentures will
receive upon such conversion, in addition to the shares of Common Stock to
which such holder is entitled, the amount of cash which such holder would
have received if such holder had, immediately prior to the record date for
such distribution of cash, converted its Debentures into Common Stock, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to the close of business on such record date by a fraction of which the
numerator shall be the Current Market Price of the Common Stock on the
record date less the amount of cash so distributed (and not excluded as
provided above) applicable to one share of Common Stock and the denominator
shall be such Current Market Price of the Common Stock, such reduction to
be effective immediately prior to the opening of business on the day
following the record date; provided, however, that in the event the portion
of the cash so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price of the Common Stock on the
record date, in lieu of the foregoing adjustment, adequate provision shall
be made so that each Debentureholder shall have the right to receive upon
conversion the amount of cash such holder would have received had such
holder converted each Debenture on the record date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect
if such dividend or distribution had not been declared. If any adjustment
is required to be made as set forth
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in this subsection (d) as a result of a distribution that is a quarterly
dividend, such adjustment shall be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to
be excluded pursuant hereto. If an adjustment is required to be made as set
forth in this subsection (d) above as a result of a distribution that is
not a quarterly dividend, such adjustment shall be based upon the full
amount of the distribution.
(e) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer shall involve the payment by the
Company or such subsidiary of consideration per share of Common Stock
having a fair market value (as determined by the Board of Directors, or to
the extent permitted by applicable law, a duly authorized committee
thereof, whose determination shall be conclusive, and described in a
resolution of the Board of Directors or such duly authorized committee
thereof), as the case may be, at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange offer
(as it shall have been amended) that exceeds the Current Market Price of
the Common Stock on the Trading Day next succeeding the Expiration Time,
the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the Expiration Time by a fraction (which shall not be greater than
one) of which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) on the Expiration
Time multiplied by the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time and the denominator shall
be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted up to any such maximum,
being referred to as the "Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased Shares) on
the Expiration Time and the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following
the Expiration Time. In the event that the Company is obligated to purchase
shares pursuant to any such tender or exchange offer, but the Company is
permanently prevented by applicable law from effecting any such purchases
or all such purchases are rescinded, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
tender or exchange offer had not been made.
(f) In case of a tender or exchange offer made by a Person other than
the Company or any Subsidiary for an amount which increases the offeror's
ownership of Common Stock to more than 25% of the Common Stock outstanding
and shall involve the payment by such Person of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors, or to the extent permitted by
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applicable law, a duly authorized committee thereof, whose determination
shall be conclusive, and described in a resolution of the Board of
Directors) at the applicable Expiration Time tenders or exchanges may be
made pursuant to such tender or exchange offer (as it shall have been
amended) that exceeds the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, and in which, as of the
Expiration Time the Board of Directors is not recommending rejection of the
offer, the Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction (which shall not be
greater than one) of which the numerator shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) on
the Expiration Time multiplied by the Current Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all Purchased Shares and (y) the product of the number
of shares of Common Stock outstanding (less any Purchased Shares) on the
Expiration Time and the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following
the Expiration Time. In the event that such Person is obligated to purchase
shares pursuant to any such tender or exchange offer, but such Person is
permanently prevented by applicable law from effecting any such purchases
or all such purchases are rescinded, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing,
the adjustment described in this subsection (f) shall not be made if, as of
the Expiration Time, the offering documents with respect to such offer
disclose a plan or intention to cause the Company to engage in any
transaction described in Article XII.
(g) In case the Company shall issue Common Stock or securities
convertible into, or exchangeable for, Common Stock at a price per share
(or having a conversion or exchange price per share) that is less than the
then Current Market Price of the Common Stock (but excluding, among other
things, issuances: (a) pursuant to any bona fide plan for the benefit of
employees, directors, consultants or other individuals in connection with
employee incentive plans of the Company now or hereafter in effect; (b) to
acquire all or any portion of a business in an arm's-length transaction
between the Company and an unaffiliated third party including, if
applicable, issuances upon exercise of options or warrants assumed in
connection with such an acquisition; (c) in a bona fide public offering
pursuant to a firm commitment underwriting (or a similar type of offering
made pursuant to Rule 144A and/or Regulation S under the Securities Act) or
sales at the market pursuant to a continuous offering stock program; (d)
pursuant to the exercise of warrants, rights (including, without
limitation, earnout rights) or options, or upon the conversion of
convertible securities, which are issued and outstanding on the date
hereof, or which may be issued in the future at fair value and with an
exercise price or
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conversion price at least equal to the Current Market Price of the Common
Stock at the time of issuance of such warrant, right, option or convertible
security; and (e) pursuant to a dividend reinvestment plan or other plan
hereafter adopted for the reinvestment of dividends or interest provided
that such Common Stock is issued at a price at least equal to 95% of the
market price of the Common Stock at the time of such issuance), the
Conversion Price shall be adjusted so that the holder of each Debenture
shall be entitled to receive, upon the conversion thereof, the number of
shares of Common Stock determined by multiplying (i) the Conversion Price
on the day immediately prior to such date of issuance by (ii) a fraction,
the numerator of which shall be the sum of (1) the number of shares of
Common Stock outstanding on such date and (2) the number of shares of
Common Stock which the aggregate consideration receivable by the Company
for the total number of shares of Common Stock so issued (or into which the
convertible securities may convert) would purchase at such Conversion Price
on such date, and the denominator of which shall be the sum of (A) the
number of shares of Common Stock outstanding on such date and (B) the
number of additional shares of Common Stock issued (or into which the
convertible securities may convert). An adjustment made pursuant to this
subsection (g) shall be made on the next Business Day following the date on
which any such issuance is made and shall be effective retroactively
immediately after the close of business on such date. For purposes of this
subsection (g), the aggregate consideration receivable by the Company in
connection with the issuance of shares of Common Stock or of securities
convertible into shares of Common Stock shall be deemed to be equal to the
sum of the aggregate offering price (before deduction of underwriting
discounts or commissions and expenses payable to third parties) of all such
securities plus the minimum aggregate amount, if any, payable upon
conversion of any such convertible securities into shares of Common Stock.
(h) For purposes of this Section 15.5, the following terms shall have
the meaning indicated:
(1) "Closing Price" means the last reported sale price for each
day shall be (i) the last reported sale price of Common Stock on the
National Market of the National Association of Securities Dealers,
Inc. Automated Quotation System, or any similar system of automated
dissemination of quotations of securities prices then in common use,
if so quoted, or (ii) if not quoted as described in clause (i), the
mean between the high bid and low asked quotations for Common Stock as
reported by the National Quotation Bureau Incorporated if at least two
securities dealers have inserted both bid and asked quotations for
such class of stock on at least 5 of the 10 preceding days, or (iii)
if the Common Stock is listed or admitted for trading on any national
securities exchange, the last sale price, or the closing bid price if
no sale occurred, of such class of stock on the principal securities
exchange on which such class of stock is listed. If the Common Stock
is quoted on a national securities or central market system, in lieu
of a market or quotation system described above, the last reported
sale price shall
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be determined in the manner set forth in clause (ii) of the preceding
sentence if bid and asked quotations are reported but actual
transactions are not, and in the manner set forth in clause (iii) of
the preceding sentence if actual transactions are reported. If none of
the conditions set forth above is met, the last reported sale price of
Common Stock on any day or the average of such last reported sale
prices for any period shall be the fair market value of such class of
stock as determined by a member firm of the New York Stock Exchange,
Inc. selected by the Company.
(2) "Current Market Price" shall mean the arithmetic average of
the daily Closing Prices per share of Common Stock for the ten
consecutive Trading Days immediately prior to the date in question for
the purpose of any computation under subsections (b), (c), (d), (e),
(f) and (g) above.
(3) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's-length transaction.
(4) "Trading Day" with respect to Common Stock means (i) if the
Common Stock is quoted on the National Market of the National
Association of Securities Dealers, Inc., Automated Quotation System or
any similar system of automated dissemination of quotations of
securities prices, days on which trades may be made on such system or
(ii) if the Common Stock is listed or admitted for trading on any
national securities exchange, days on which such national securities
exchange is open for business.
(i) To the extent permitted by applicable law, the Company from time
to time may reduce the Conversion Price by any amount for any period of
time if the period is at least twenty (20) days, the reduction is
irrevocable during the period and the Board of Directors shall have made a
determination that such reduction would be in the best interests of the
Company, which determination shall be conclusive. Whenever the Conversion
Price is reduced pursuant to the preceding sentence, the Company shall mail
to holders of Debentures at his address appearing on the Register a notice
of the reduction at least fifteen (15) days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
(j) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
subsection (j) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Article XV shall be made by the Company and shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may
be.
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Anything in this Section 15.5 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Conversion Price,
in addition to those required by this Section 15.5, as it in its discretion
shall determine to be advisable in order that any stock dividends,
subdivision of shares, distribution of rights to purchase stock or
securities, or a distribution of securities convertible into or
exchangeable for stock hereafter made by the Company to its stockholders
shall not be taxable.
(k) Whenever the Conversion Price is adjusted, as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion
Price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date
on which each adjustment becomes effective and shall mail such notice of
such adjustment of the Conversion Price to the holder of each Debenture at
his last address appearing on the Register provided for in Section 2.5 of
this Indenture, within 20 days after execution thereof. Failure to deliver
such notice shall not affect the legality or validity of any such
adjustment.
(l) In any case in which this Section 15.5 provides that an adjustment
shall become effective immediately after a record date for an event, the
Company may defer until the occurrence of such event (i) issuing to the
holder of any Debenture converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any amount in lieu
of any fraction pursuant to Section 15.3, such payment thereof shall be
made by check.
Section 15.6 Effect of Reclassification, Consolidation, Merger or Sale. If
any of the following events occur, namely (i) any reclassification or change of
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination), (ii) any consolidation, merger or combination of
the Company with another corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, or (iii)
any sale or conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing that each Debenture shall be
convertible into the kind and amount of shares of stock and other securities or
property or assets (including cash) receivable upon such reclassification,
change,
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consolidation, merger, combination, sale or conveyance by a holder of a number
of shares of Common Stock issuable upon conversion of such Debentures
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article XV.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Debentures, at his address appearing on
the Register provided for in Section 2.5 of this Indenture.
The above provisions of this Section 15.6 shall similarly apply to
successive reclassifications, consolidations, mergers, combinations, and sales.
If this Section 15.6 applies to any event or occurrence, Section 15.5 shall
not apply.
Section 15.7 Taxes on Shares Issued. The issue of stock certificates on
conversions of Debentures shall be made without charge to the converting
Debentureholder for any U.S. tax in respect of the issue thereof. The Company
shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issue and delivery of stock in any name other
than that of the holder of any Debenture converted, and the Company shall not be
required to issue or deliver any such stock certificate unless and until the
Person or Persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
Section 15.8 Reservation of Shares; Shares to Be Fully Paid; Compliance
with Governmental Requirements; Listing of Common Stock. The Company shall
provide, free from preemptive rights, out of its authorized but unissued shares,
sufficient shares of Common Stock to provide for the conversion of the
Debentures from time to time as such Debentures are presented for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Debentures, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Debentures will upon issue be fully paid and non-assessable
by the Company and free from all taxes, liens and charges with respect to the
issue thereof.
The Company covenants that if any shares of Common Stock to be provided for
the purpose of conversion of Debentures hereunder require registration with or
approval of any governmental authority under any Federal or State law before
such shares may be validly issued
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upon conversion, the Company will in good faith and as expeditiously as possible
endeavor to secure such registration or approval, as the case may be.
The Company further covenants that if at any time the Common Stock shall be
listed on the New York Stock Exchange or any other national securities exchange
the Company will, if permitted by the rules of such exchange, list and keep
listed so long as the Common Stock shall be so listed on such exchange, all
Common Stock issuable upon conversion of the Debentures.
Section 15.9 Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Debentures to determine the Conversion Price or whether any facts
exist which may require any adjustment of the Conversion Price, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Debenture; and the Trustee and any other conversion agent make no
representations with respect thereto. Subject to the provisions of Section 8.1,
neither the Trustee nor any conversion agent shall be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
or stock certificates or other securities or property or cash upon the surrender
of any Debenture for the purpose of conversion or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article.
Without limiting the generality of the foregoing, neither the Trustee nor any
conversion agent shall be under any responsibility to determine the correctness
of any provisions contained in any supplemental indenture entered into pursuant
to Section 15.6 relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Debentureholders upon the
conversion of their Debentures after any event referred to in such Section 15.6
or to any adjustment to be made with respect thereto, but, subject to the
provisions of Section 8.1, may accept as conclusive evidence of the correctness
of any such provisions, and shall be protected in relying upon, the Officers'
Certificate (which the Company shall be obligated to file with the Trustee prior
to the execution of any such supplemental indenture) with respect thereto.
Section 15.10 Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock (other than in cash out of retained earnings); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share
of any class or any other rights or warrants; or
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(c) of any reclassification or reorganization of the Common Stock of
the Company (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value,
or from no par value to par value), or of any consolidation or merger to
which the Company is a party and for which approval of any shareholders of
the Company is required, or of the sale or transfer of all or substantially
all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Debentures at his address appearing on the Register, provided for in
Section 2.5 of this Indenture, as promptly as possible but in any event at least
fifteen (15) days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 Provisions Binding on Company's Successors. All the covenants,
stipulations, promises and agreements in this Indenture contained by the Company
shall bind its successors and assigns whether so expressed or not.
Section 16.2 Official Acts by Successor Corporation. Any act or proceeding
by any provision of this Indenture authorized or required to be done or
performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
Section 16.3 Addresses for Notices, Etc. Any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Debentures on the Company may be given or
served by being deposited postage
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prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee) to Omnicom
Group Inc., 437 Madison Avenue, New York, New York 10022 Attention: Secretary.
Any notice, direction, request or demand hereunder to or upon the Trustee shall
be deemed to have been sufficiently given or made, for all purposes, if given or
made in writing at the Principal Office of the Trustee, which office is, at the
date as of which this Indenture is dated, located at The Chase Manhattan Bank.
Attention: .
Section 16.4 Governing Law. This Indenture and each Debenture shall be
deemed to be a contract made under the laws of New York, and for all purposes
shall be construed in accordance with the laws of New York.
Section 16.5 Evidence of Compliance with Conditions Precedent; Certificates
to Trustee. Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, and an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent have been complied with.
Section 16.6 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
Trust Indenture Act ss.314(a)(4)) shall comply with the provisions of Trust
Indenture Act ss.314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person
such condition or covenant has been satisfied.
Section 16.7 Legal Holidays. In any case where the date of maturity of
interest on or principal of the Debentures or the date fixed for redemption or
repayment of any Debenture will be a legal holiday or a day on which banking
institutions in New York, New York are authorized by law or executive order to
close ("Legal Holidays"), then payment of such interest on or principal of the
Debentures need not be made on such date but may be made on the next
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succeeding day not a Legal Holiday with the same force and effect as if made on
the date of maturity or the date fixed for redemption or repayment and no
interest shall accrue for the period from and after such date.
Section 16.8 No Security Interest Created. Nothing in this Indenture or in
the Debentures, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction where property of
the Company or its subsidiaries is located.
Section 16.9 Benefits of Indenture. Nothing in this Indenture or in the
Debentures, expressed or implied, shall give to any Person, other than the
parties hereto, any paying agent, any authenticating agent, any Debenture
registrar and their successors hereunder, the holders of Debentures and the
holders of Senior Indebtedness, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 16.10 Table of Contents, Headings, Etc. The table of contents and
the titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 16.11 Authenticating Agent. The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Debentures in connection
with the original issuance thereof and transfers and exchanges of Debentures
hereunder, including under Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.5, as fully to
all intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Debentures. For all purposes of this Indenture, the authentication and delivery
of Debentures by the authenticating agent shall be deemed to be authentication
and delivery of such Debentures "by the Trustee" and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent
shall be deemed to satisfy any requirement hereunder or in the Debentures for
the Trustee's certificate of authentication. Such authenticating agent shall at
all times be a Person eligible to serve as trustee hereunder pursuant to Section
8.9.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 16.12, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any
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authenticating agent by giving written notice of termination to such
authenticating agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section, the Trustee
shall either promptly appoint a successor authenticating agent or itself assume
the duties and obligations of the former authenticating agent under this
Indenture, and upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Debentures as the names and
addresses of such holders appear on the Register.
The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the Trustee shall be entitled to be reimbursed for such
pre-approved payments, subject to Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 16.11 shall
be applicable to any authenticating agent.
Section 16.12 Execution in Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
The Chase Manhattan Bank hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of January 3, 1997.
OMNICOM GROUP INC.
By______________________________________
Title:
[CORPORATE SEAL]
Attest:
By__________________________
THE CHASE MANHATTAN BANK
______________________,
TRUSTEE
By______________________________________
Title:
[CORPORATE SEAL]
Attest:
By__________________________
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EXHIBIT A
THIS DEBENTURE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR FEDERAL INCOME TAX
PURPOSES. THE TOTAL AMOUNT OF ORIGINAL ISSUE DISCOUNT IS 12.418% OF THE
DEBENTURE'S PRINCIPAL AMOUNT, THE ISSUE DATE IS JANUARY 3, 1997, AND THE YIELD
FROM THE ISSUE DATE TO JANUARY 3, 2003 IS 6%, COMPOUNDED SEMIANNUALLY (TREATED
AS THE YIELD TO MATURITY FOR TAX PURPOSES).
[For global Debenture only:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY," WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DEPOSITARY AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. (OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE DEBENTURE
EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT, PRIOR
TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), RESELL OR OTHERWISE TRANSFER THE DEBENTURE EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH DEBENTURE EXCEPT (A) TO OMNICOM
GROUP INC. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE
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CHASE MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE DEBENTURE EVIDENCED HEREBY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
(D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES
TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER
THAN A TRANSFER PURSUANT TO CLAUSE 2(F) ABOVE), IT WILL FURNISH TO THE CHASE
MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE DEBENTURE
EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE DEBENTURE EVIDENCED HEREBY PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE DEBENTURE
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER
WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THE DEBENTURE EVIDENCED HEREBY PURSUANT TO CLAUSE 2(F) ABOVE OR UPON ANY
TRANSFER OF THE DEBENTURES EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
2
<PAGE>
OMNICOM GROUP INC.
4 1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2007
No. CUSIP
Omnicom Group Inc., a corporation duly organized and validly existing under
the laws of the State of New York (herein called the "Company"), which term
includes any successor corporation under the Indenture referred to on the
reverse hereof, for value received hereby promises to pay to
____________________ or registered assigns, the principal sum of ____________
($________ ) DOLLARS on January 3, 2007, at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, or,
at the option of the holder of this Debenture, at the Principal Office, in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts, and to pay
interest, semi-annually on January 3 and July 3 of each year, commencing July 3,
1997, on said principal sum at said office or agency, in like coin or currency,
at the rate per annum 4 1/4%, from January 3 or July 3, as the case may be, next
preceding the date of this Debenture to which interest has been paid or duly
provided for, unless the date hereof is a date to which interest has been paid
or duly provided for, in which case from the date of this Debenture, or unless
no interest has been paid or duly provided for on the Debentures, in which case
from January 3, 1997, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after any
December 19 or June 18, as the case may be, and before the following January 3
or July 3, this Debenture shall bear interest from such January 3 or July 3;
provided, however, that if the Company shall default in the payment of interest
due on such January 3 or July 3, then this Debenture shall bear interest from
the next preceding January 3 or July 3 to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for on such
Debenture, from January 3, 1997. The interest payable on the Debenture pursuant
to the Indenture on any January 3 or July 3 will be paid to the person entitled
thereto as it appears on the Register at the close of business on the record
date, which shall be the December 19 or June 18 (whether or not a Business Day)
next preceding such January 3 or July 3, as provided in the Indenture; provided
that any such interest not punctually paid or duly provided for shall be payable
as provided in the Indenture. Interest may, at the option of the Company, be
paid either (i) by check mailed to the registered address of such person or (ii)
by transfer to an account maintained by such person located in the United
States.
Interest on the Debentures shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
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<PAGE>
Reference is made to the further provisions of this Debenture set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on the Debentures to
the prior payment in full of all Senior Indebtedness and provisions giving the
holder of this Debenture the right to convert this Debenture into Common Stock
of the Company on the terms and subject to the limitations referred to on the
reverse hereof and as more fully specified in the Indenture. Such further
provisions shall for all purposes have the same effect as though fully set forth
at this place.
This Debenture shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of said State.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed under its corporate seal.
Dated: OMNICOM GROUP INC.
By:__________________________
Attest:__________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the
within_named Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By:________________________________________________
Authorized Officer
By:________________________________________________
As Authenticating Agent (if different from Trustee)
5
<PAGE>
[FORM OF REVERSE OF DEBENTURE]
OMNICOM GROUP INC.
4 1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2007
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 4 1/4% Convertible Subordinated Debentures due 2007
(herein called the "Debentures"), limited to the aggregate principal amount of
$218,500,000 all issued or to be issued under and pursuant to an indenture dated
as of January 3, 1997 (herein called the "Indenture"), between the Company and
The Chase Manhattan Bank, as trustee (herein called the "Trustee"), to which the
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Debentures. Capitalized terms used in this Debenture and not defined herein have
the meaning ascribed thereto in the Indenture.
The Chase Manhattan Bank, the Trustee under the Indenture, has been
appointed by the Company as paying agent, conversion agent, Debenture registrar
and Custodian with regard to the Debentures.
In case an Event of Default shall have occurred and be continuing, the
principal of and accrued interest on all Debentures may be declared, and upon
said declaration shall become, due and payable, in the manner, with the effect
and subject to the conditions provided in the Indenture.
With the consent of the holders of not less than 66 2/3% in aggregate
principal amount of the Debentures at the time outstanding, the Company, when
authorized by resolutions of the Board of Directors, and the Trustee from time
to time and at any time may enter into an indenture or indentures supplemental
to the Indenture for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the holders of
the Debentures; provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of any Debenture, or reduce the rate or extend the
time of payment of interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or reduce any amount payable on redemption or on
repayment thereof, or impair or affect the right of any Debentureholder to
institute suit for the payment thereof, or make the principal thereof or
interest or premium, if any, thereon payable in any coin or currency other than
that provided in the Debenture, or modify the provisions of the Indenture with
respect to the subordination of the Debentures in a manner adverse to the
Debentureholders, or change the obligation of the Company to make repayment of
any Debenture on a Fundamental Change Repayment Date or the Holder Repayment
Date in a manner adverse to the holder of the Debentures, or impair the right to
convert the Debentures into Common Stock subject to the terms set forth in the
Indenture, including Section 15.6 thereof, without the consent of the holder of
each Debenture so affected or (ii) reduce the
1
<PAGE>
aforesaid percentage of Debentures, the holders of which are required to consent
to any such supplemental indenture, without the consent of the holders of all
Debentures then outstanding. If any Event of Default shall have occurred and be
continuing, the Trustee or the holders of not less than 25 percent in aggregate
principal amount of the Debentures then outstanding, by notice in writing to the
Company (and to the Trustee if given by Debentureholders), may declare the
principal of all the Debentures and the interest accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in the Indenture or in this
Debenture contained to the contrary notwithstanding. It is also provided in the
Indenture that, prior to any declaration accelerating the maturity of the
Debentures, the holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may on behalf of the holders of all of the
Debentures waive any past default or Event of Default under the Indenture and
its consequences except a default in the payment of interest or any premium on
or the principal of any of the Debentures, a default in the payment of a
redemption or repayment price pursuant to Article III thereof, a failure by the
Company to convert any Debentures into Common Stock or a default in respect of a
covenant or provision in the Indenture which under Article XI thereof cannot be
modified or amended without the consent of holders of all Debentures
outstanding. The holders of a majority in principal amount of the Debentures
then outstanding shall have the right to direct the time, method of conducting
any proceedings for any remedy available to the Trustee subject to certain
limitations specified in the Indenture. Any such consent or waiver by the holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Debenture and any Debentures which may be issued in exchange or
substitute hereof, irrespective of whether or not any notation thereof is made
upon this Debenture or such other Debentures.
The indebtedness evidenced by the Debentures is subordinate to the prior
payment in full of all Senior Indebtedness. During the continuance beyond any
applicable grace period of any default in the payment of principal, premium,
interest or any other payment due on any Senior Indebtedness, no payment of
principal of, or premium if any, or interest on the Debentures shall be made by
the Company. In addition, upon any distribution of assets of the Company upon
any dissolution, winding up, liquidation or reorganization, the payment of the
principal of, or premium, if any, and interest on the Debentures is to be
subordinated to the extent provided in the Indenture in right of payment to the
prior payment in full of all Senior Indebtedness. By reason of such
subordination, in the event of the Company's dissolution, holders of Senior
Indebtedness may receive more, ratably, and holders of the Debentures may
receive less, ratably, than the other creditors of the Company. Such
subordination will not prevent the occurrence of any Event of Default under the
Indenture. Each holder of this Debenture, by accepting the same, agrees to and
shall be bound by such provisions and authorizes the Trustee on its behalf to
take such action as may be necessary or appropriate to effectuate the
subordination so provided and appoints the Trustee its attorney-in-fact for such
purpose.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and
2
<PAGE>
unconditional, to pay the principal of and any premium and interest on this
Debenture at the place, at the respective times, at the rate and in the coin or
currency herein prescribed.
The Debentures are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000.
The Debentures will not be redeemable at the option of the Company prior to
December 29, 2000. The Debentures are not entitled to any sinking fund. At any
time on or after December 29, 2000 and prior to maturity, the Debentures may
(unless theretofore repaid or converted) be redeemed at the option of the
Company as a whole, or from time to time in part, upon notice, as described
below, at the following redemption prices (expressed as percentages of the
principal amount), together in each case with accrued interest to, but
excluding, the date fixed for redemption, if redeemed during the 3-month period
beginning:
Date Percentage Date Percentage
---- ---------- ---- ----------
January 3, 2001......... 108.324% January 3, 2002......... 110.607%
April 3, 2001........... 108.890% April 3, 2002........... 111.207%
July 3, 2001............ 109.448% July 3, 2002............ 111.801%
October 3, 2001......... 110.031% October 3, 2002......... 112.418%
and 100% on or after January 3, 2003; provided that if the date fixed for
redemption is on January 3 or July 3, then the interest payable on such date
shall be paid to the holder of record on the next preceding December 19 or June
18, respectively. If the date fixed for redemption is on or after December 29,
2000 but before January 3, 2001, the redemption price shall be at 108.324% of
the principal amount with accrued interest to, but excluding, January 3, 2001.
In case the Company shall desire to exercise the right to redeem all or, as
the case may be, any part of the Debentures for redemption then it, or at its
request, the Trustee in the name of and at the expense of the Company, shall
mail or cause to be mailed a notice of such redemption at least 30 and not more
than 60 days prior to the date fixed for redemption to the holders of Debentures
so to be redeemed as a whole or in part at their last addresses as the same
appear on the Register. Such mailing shall be by first class mail. The notice if
mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the holder receives such notice. In any case, failure
to give such notice by mail or any defect in the notice to the holder of any
Debenture designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Debenture.
If notice of redemption has been given as above provided, the Debentures or
portions of Debentures with respect to which such notice has been given shall,
unless theretofore converted into Common Stock pursuant to the terms hereof,
become due and payable on the date fixed for redemption and at the place or
places stated in such notice at the applicable redemption price, together with
interest accrued to, but excluding, the date fixed for redemption (or to, but
excluding, January 3, 2001 if the date fixed for redemption is on or after
December 29, 2000, but
3
<PAGE>
before January 3, 2001), and on and after said date (unless the Company shall
default in the payment of such Debentures at the redemption price, together with
interest accrued to said date) interest on the Debentures or portion of
Debentures so called for redemption shall cease to accrue and such Debentures
shall cease after the close of business on the Business Day immediately
preceding the date fixed for redemption to be convertible into Common Stock and,
except as provided in Sections 8.5 and 13.4 of the Indenture, to be entitled to
any benefit or security under the Indenture, and the holders thereof shall have
no right in respect of such Debentures except the right to receive the
redemption price thereof and unpaid interest to, but excluding, the date fixed
for redemption (or to January 3, 2001 if the date fixed for redemption is on or
after December 29, 2000, but before January 3, 2001). On presentation and
surrender of such Debentures at a place of payment in said notice specified, the
said Debentures or the specified portions thereof shall be paid and redeemed by
the Company at the applicable redemption price, together with interest accrued
thereon to, but excluding, the date fixed for redemption (or to, but excluding,
January 3, 2001 if the date fixed for redemption is on or after December 29,
2000, but before January 3, 2001); provided that, if the applicable date fixed
for redemption is an interest payment date, the semi-annual payment of interest
becoming due on such date shall be payable to the holders of such Debentures
registered as such on the relevant record date instead of the holders
surrendering such Debentures for redemption on such date.
Notwithstanding the Company's right of redemption, the holder of a
Debenture may elect to have that Debenture or portions thereof (in the principal
amount of $1,000 or any multiple thereof) repaid by the Company on January 3,
2003 (the "Holder Repayment Date"). Any such repayment shall be at a repayment
price of 112.418% of the principal amount thereof (the "Holder Repayment Price")
with interest accrued to, but excluding, the Holder Repayment Date on the repaid
Debentures. For a Debenture to be so repaid at the option of the holder, the
Company must receive at the office of one of the Company's paying agents such
Debenture with a form entitled "Option to Elect Repayment on January 3, 2003" on
the reverse thereof duly completed (the "Holder Repayment Notice"), together
with such Debenture duly endorsed, at any time from the opening of business on
the date that is 20 Business Days prior to the Holder Repayment Date until the
close of business on the Business Day immediately preceding such Holder
Repayment Date and such Holder Repayment Notice must not have been withdrawn. In
order to exercise the repayment option with respect to any interest in a
Debenture in global form, the beneficial holder must comply with the applicable
procedures of the Depositary, furnish appropriate endorsements and documentation
if required by the Company or the Trustee or paying agent and such notice shall
not have been withdrawn.
Any holder delivering to the paying agent a Holder Repayment Notice shall
have the right at any time prior to the close of business on the Business Day
immediately preceding the Holder Repayment Date to withdraw, in whole or in
part, such Holder Repayment Notice by delivery of a written notice of withdrawal
to the paying agent. In order to exercise the withdrawal option with respect to
any interest in a Debenture in global form, the beneficial holder must comply
with the applicable procedures of the Depositary. All questions as to the
validity, eligibility
4
<PAGE>
(including time of receipt) and acceptance of any Debenture for repayment shall
be determined by the Company, whose determination shall be final and binding.
Payment of the Holder Repayment Price, together with any accrued interest,
for a Debenture for which a Holder Repayment Notice has been delivered and not
withdrawn is conditioned upon book-entry transfer or delivery of such Debenture
(together with necessary endorsements) to the Company's paying agent at its
office at 55 Water Street, Room 234, North Building, New York, New York, 10041,
or any other office of the paying agent maintained for such purpose, at any time
(whether prior to, on or after the Holder Repayment Date) after delivery of such
Holder Repayment Notice. Payment of the Holder Repayment Price, together with
any accrued interest, for such Debenture will be made promptly following the
later of the Holder Repayment Date or the time of book-entry transfer or
delivery of such Debenture by mailing checks or by sending a wire transfer for
immediately available funds to an account maintained in the United States for
the amount payable to the holders of such Debentures entitled thereto as they
shall appear on the Register. If the paying agent holds, in accordance with the
terms of the Indenture, money sufficient to pay the repayment price of such
Debenture on the Holder Repayment Date, then on and after such date, such
Debenture will cease to be outstanding, and interest on such Debenture shall
cease to accrue, and all other rights of the holder shall terminate (other than
the right to receive the repayment price upon the time of book-entry transfer or
delivery of the Debentures).
The Company shall use its best efforts to have a notice regarding repayment
at the option of the holders on the Holder Repayment Date published at least
once in each of Bloomberg Business News, Dow Jones News (DJN) and Reuter
Financial Report in The City of New York at least 30 days prior to the Holder
Repayment Date. No failure of the Company to give the foregoing notice and no
defect therein shall limit the Debentureholders' repayment rights or affect the
validity of the proceedings for the repayment of the Debentures.
If a Fundamental Change occurs at any time while Debentures are
outstanding, each holder of Debentures shall have the right, at such holder's
option, to require the Company to repay such holder with respect to all (and not
less than all for Debentures in certificated form) such holder's Debentures on
the date (the "Fundamental Change Repayment Date") that is the 45th day (or, if
such 45th day is not a Business Day, the next succeeding Business Day) after the
Company Notice (as defined below) of such Fundamental Change. Such repayment
shall be made at the following prices (expressed as percentages of the principal
amount) in the event of a Fundamental Change occurring during the 3-month period
beginning:
Date Percentage Date Percentage
---- ---------- ---- ----------
January 3, 1997......... 100.427% January 3, 1999......... 104.142%
April 3, 1997........... 100.875% April 3, 1999........... 104.646%
July 3, 1997............ 101.315% July 3, 1999............ 105.142%
October 3, 1997......... 101.777% October 3, 1999......... 105.660%
January 3, 1998......... 102.230% January 3, 2000......... 106.171%
5
<PAGE>
Date Percentage Date Percentage
---- ---------- ---- ----------
April 3, 1998........... 102.705% April 3, 2000........... 106.705%
July 3, 1998............ 103.172% July 3, 2000............ 107.231%
October 3, 1998......... 103.661%
and at a repayment price of 107.781% of the principal amount if a Fundamental
Change occurs on or after October 3, 2000 but before December 29, 2000, and
thereafter at the redemption price which would be applicable to a redemption at
the option of the Company; provided in each case that if the Applicable Price is
less than the Reference Market Price, the Company shall repay such Debentures at
a price equal to the foregoing repayment price multiplied by the fraction
obtained by dividing the Applicable Price by the Reference Market Price. In each
case, the Company shall pay accrued interest, if any, on such Debentures to, but
excluding, the Fundamental Change Repayment Date; provided that if such
Fundamental Change Repayment Date is January 3 or July 3, then the interest
payable on such date shall be paid to the holder of record of the Debenture on
the next preceding record date. On or before the tenth day after the occurrence
of a Fundamental Change, the Company, or, at its written request, the Trustee in
the name of and at the expense of the Company, shall mail or cause to be mailed
to all holders of record on the date of the Fundamental Change a notice (the
"Company Notice") of the occurrence of such Fundamental Change and of the
repayment right at the option of the holders arising as a result thereof. The
Company shall also use its best efforts to have a notice published at least once
in each of Bloomberg Business News, Dow Jones News (DJN) and Reuter Financial
Report in The City of New York on or before the tenth day after the occurrence
of a Fundamental Change. The Company shall promptly deliver a copy of each of
the published notices and Company Notice to the Trustee. No failure of the
Company to give the foregoing notices and no defect therein shall limit the
Debentureholders' repayment rights or affect the validity of the proceedings for
the repayment of the Debentures.
For a Debenture to be repaid at the option of the holder resulting from a
Fundamental Change, the Company must receive at the office of one of the
Company's paying agents such Debenture with a form entitled "Option to Elect
Repayment Upon a Fundamental Change" on the reverse thereof duly completed (the
"Fundamental Change Repayment Notice") together with such Debenture, duly
endorsed at any time from the opening of business on the date that is on or
before the 43rd day after the Company Notice (or if such 43rd day is not a
Business Day, the immediately preceding Business Day) and such Fundamental
Change Repayment Notice shall not have been withdrawn. In order to exercise the
repayment option with respect to any interest in a Debenture in global form, the
beneficial holder must comply with the applicable procedures of the Depositary,
furnish appropriate endorsements and documentation if required by the Company or
the Trustee or paying agent and such notice shall not have been withdrawn.
Any holder delivering to the paying agent a Fundamental Change Repayment
Notice shall have the right at any time prior to the close of business on the
Business Day immediately preceding the Fundamental Change Repayment Date to
withdraw such Fundamental Change Repayment Notice (as to Debentures in
certificated form, withdrawal must be made in fully) by
6
<PAGE>
delivery of a written notice of withdrawal to the paying agent. In order to
exercise the withdrawal option with respect to any interest in a Debenture in
global form, the beneficial holder must comply with the applicable procedures of
the Depositary. All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Debenture for repayment shall be determined by
the Company, whose determination shall be final and binding.
Payment of the Fundamental Change Repayment Price, together with any
accrued interest, for a Debenture for which a Fundamental Change Repayment
Notice has been delivered and not withdrawn is conditioned upon book-entry
transfer or delivery of such Debenture (together with necessary endorsements) to
the Company's paying agent at its office at 55 Water Street, Room 234, North
Building, New York, New York, 10041, or any other office of the Company's paying
agent maintained for such purpose, at any time (whether prior to, on or after
the Fundamental Change Repayment Date) after delivery of such Fundamental Change
Repayment Notice. Payment of the Fundamental Change Repayment Price, together
with any accrued interest, for such Debenture will be made promptly following
the later of the Fundamental Change Repayment Date or the time of book-entry
transfer or delivery of such Debenture by mailing checks or by sending a wire
transfer for immediately available funds to an account maintained in the United
States for the amount payable to the holders of such Debentures entitled thereto
as they shall appear on the Register. If the Company's paying agent holds, in
accordance with the terms of the Indenture, money sufficient to pay the
Fundamental Change Repayment Price, together with any accrued interest of such
Debenture on the Fundamental Change Repayment Date, then on and after such date,
such Debenture will cease to be outstanding, and interest on such Debenture
shall cease to accrue, and all other rights of the holder shall terminate (other
than the right to receive the repayment price upon the time of book-entry
transfer or delivery of the Debentures).
Subject to and upon compliance with the provisions of the Indenture, the
holder hereof shall have the right, at its option, at any time after 90 days
following the latest date of original issuance of the Debentures and prior to
the close of business on January 2, 2007, or, as to all or any portion hereof
called for redemption, prior to the close of business on the Business Day
immediately preceding the date fixed for redemption (unless the Company shall
default in payment due upon redemption thereof), to convert the principal hereof
or any portion of such principal which is $1,000 or an integral multiple hereof,
into that number of shares of Common Stock (as said shares shall then be
constituted) at the date of conversion, obtained by dividing the principal
amount of this Debenture or portion hereof surrendered for by the Conversion
Price or such Conversion Price as adjusted from time to time as provided in the
Indenture, by surrender of the Debenture so to be converted in whole or in part
in the manner provided, together with any required funds, if any, under the
Indenture. A Debenture in respect of which a holder is exercising the option to
require repayment on January 3, 2003 or upon a Fundamental Change may be
converted only if such holder withdraws its election to exercise the option to
require repayment in accordance with the terms of the Indenture. A holder of
Debentures is not entitled to any rights of a holder of Common Stock until such
holder has converted its Debentures to
7
<PAGE>
Common Stock, and only to the extent such Debentures are deemed to have
converted to Common Stock under Article XV of the Indenture.
In order to exercise the conversion privilege with respect to any Debenture
in certificated form, the holder of any such Debenture to be converted in whole
or in part shall surrender such Debenture, duly endorsed, at an office or agency
maintained by the Company accompanied by any funds required under the Indenture
and shall give written notice of conversion in the form provided on the
Debentures (or such other notice which is acceptable to the Company) to the
Company at such office or agency that the holder elects to convert such
Debenture or the portion thereof specified in said notice. Such notice shall
also state the name or names (with address) in which the certificate or
certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued, and shall be accompanied by transfer taxes, if
required pursuant to Section 15.7 of the Indenture. Each such Debenture
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the registration of such Debenture, be duly
endorsed by, or be accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the holder or its duly authorized attorney. In
order to exercise the conversion privilege with respect to any interest in a
Debenture in global form, the beneficial holder must comply with the applicable
procedures of the Depositary, furnish appropriate endorsements and transfer
documents if required by the Company or the Trustee or conversion agent, and pay
funds or taxes, if any, required under the Indenture. The Company's delivery of
the fixed number of shares of Common Stock into which the Debentures are
convertible will be deemed to satisfy the Company's obligation to pay the
principal amount of the Debentures and all accrued interest and original issue
discount that has not previously been (or is not simultaneously being) paid. The
Common Stock is treated as issued first in payment of accrued interest and
original issue discount and then in payment of principal. Thus, accrued interest
and original issue discount are treated as paid rather than canceled. As
promptly as practicable after the surrender of such Debenture and the receipt of
such notice and funds, if any, as aforesaid, the Company shall issue and shall
deliver at such office or agency to such holder, or on its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Debenture or portion thereof in accordance
with the provisions of Article XV of the Indenture and a check in payment of any
fractional interest in respect of a share of Common Stock arising upon such
conversion, as provided in Section 15.3 of the Indenture. In case any Debenture
of a denomination greater than $1,000 shall be surrendered for partial
conversion, and subject to Section 2.3 of the Indenture, the Company shall
execute and the Trustee shall authenticate and deliver to or upon the written
order of the holder of the Debenture so surrendered, without charge to him, a
new Debenture or Debentures in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to any such
Debenture (or portion thereof) on the date on which the requirements set forth
in Section 15.2 of the Indenture have been satisfied as to such Debenture (or
portion thereof), and the Person in whose name any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion
8
<PAGE>
shall be deemed to have become on said date the holder of record of the shares
represented thereby; provided, however, that any such surrender on any date when
the stock transfer books of the Company shall be closed shall constitute the
Person in whose name the certificates are to be issued as the record holder
thereof for all purposes on the next succeeding day on which such stock transfer
books are open, but such conversion shall be at the Conversion Price in effect
on the date upon which such Debenture shall have been surrendered. Any Debenture
or portion thereof surrendered for conversion during the period from the close
of business on the record date for any interest payment date to the close of
business on the Business Day next preceding the following interest payment date
shall (unless such Debenture or portion thereof being converted shall have been
called for redemption on a date fixed for redemption which occurs during the
period from the close of business on such record date to the close of business
on the Business Day next preceding the following interest payment date) be
accompanied by payment, in New York Clearing House funds or other funds
acceptable to the Company, of an amount equal to the interest otherwise payable
on such interest payment date on the principal amount being converted; provided,
however, that no such payment need be made if (i) there shall exist at the time
of conversion a default in the payment of interest on the Debentures or (ii) the
date fixed for redemption is on or after December 29, 2000 but on or before
January 3, 2001, the holders who convert on or after December 26, 2000 will
receive, in addition to Common Stock otherwise payable upon such conversion,
accrued interest to, but excluding, January 3, 2001 on the principal amount of
Debentures so converted. An amount equal to such payment shall be paid by the
Company on such interest payment date to the holder of such Debenture at the
close of business on such record date; provided, however, that if the Company
shall default in the payment of interest on such interest payment date, such
amount shall be paid to the Person who made such required payment. Except as
described in the Indenture and herein, no payment or adjustment will be made on
conversion of any Debenture for interest accrued thereon or for dividends on any
Common Stock issued upon such conversion of such Debentures.
No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Debentures. If any fractional share of
stock would be issuable upon the conversion of any Debenture or Debentures, the
Company shall make an adjustment therefor at the current market value thereof,
and such payment shall be made by check. For these purposes, the current market
value of a share of Common Stock shall be the Closing Price on the first
Business Day immediately preceding the day on which the Debentures (or specified
portions thereof) are deemed to have been converted.
Any Debentures called for redemption, unless surrendered for conversion on
or before the close of business on the Business Day immediately preceding the
date fixed for redemption, may, upon an agreement between the Company and one or
more investment bankers or other purchasers, be deemed to be purchased from the
holder of such Debentures at an amount equal to the applicable redemption price,
together with accrued interest to, but excluding, the date fixed for redemption,
by such investment bankers or other purchasers who may agree with the Company to
purchase such Debentures from the holders thereof and convert them into Common
9
<PAGE>
Stock of the Company and to make payment for such Debentures as aforesaid to the
Trustee in trust for such holders, all in accordance with the terms of the
Indenture.
Upon due presentment for registration of transfer of any Debenture to the
Trustee and satisfaction of the requirements for such transfer set forth in
Section 2.5 of the Indenture, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Debentures of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent, any
conversion agent and any Debenture registrar may deem the Person in whose name
this Debenture shall be registered upon the Register to be, and treat him as the
absolute owner of this Debenture (whether or not this Debenture shall be overdue
and notwithstanding any notation of ownership or other writing hereon made by
anyone other than the Company or any Debenture registrar), for the purpose of
receiving payment hereof, or on account hereof, and premium, if any, and
interest hereon, for the conversion hereof and for all other purposes, and
neither the Company nor the Trustee nor any other authenticating agent nor any
paying agent nor any other conversion agent nor any Debenture registrar shall be
affected by any notice to the contrary. All payments made to or upon the order
of such registered holder shall be valid, and, to the extent of the sum or sums
paid, effectual to satisfy and discharge liability for monies payable on this
Debenture.
No recourse for the payment of the principal of or any premium or interest
on this Debenture, or for any claim based hereon or otherwise in respect hereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in the Indenture or any indenture supplemental thereto or in any
Debenture, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, employee, agent, officer or
director or subsidiary, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or any
successor corporation, whether by virtue of any constitution, statute or rule of
law or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
10
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this Debenture, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT--______ Custodian of ____
TEN ENT - as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts to Minors Act
JT TEN - as joint tenants with
right of survivorship __________________________________
and not as tenants in (State)
common
Additional abbreviations may also be used
though not in the above list.
11
<PAGE>
CONVERSION NOTICE
To: OMNICOM GROUP INC.
The undersigned registered owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion hereof (which is
$1,000 or an integral multiple thereof) below designated, into shares of Common
Stock of Omnicom Group Inc. in accordance with the terms of the Indenture
referred to in this Debenture, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any Debentures representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this
Debenture not converted are to be issued in the name of a person other than the
undersigned, the undersigned will complete the appropriate section below and pay
all transfer taxes payable with respect thereto. Any amount required to be paid
to the undersigned on account of interest accompanies this Debenture.
Dated:____________________
_________________________________
_________________________________
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a
member firm of a major stock exchange if
shares of Common Stock are to be issued,
or Debentures to be delivered, other than
to and in the name of the registered
holder.
_________________________________
Signature Guarantee
<PAGE>
Fill in for registration of shares of Common Stock if to be issued, and
Debentures if to be delivered, other than to and in the name of the registered
holder:
_____________________________
(Name)
_____________________________
(Street Address)
_____________________________
(City, State and Zip Code)
Please print name and address
Principal amount to be converted
(if less than all): $___________
_________________________________
Social Security or Other Taxpayer
Identification Number
2
<PAGE>
OPTION TO ELECT REPAYMENT
ON JANUARY 3, 2003
To: OMNICOM GROUP INC.
The undersigned registered owner of this Debenture hereby irrevocably
requests and instructs Omnicom Group Inc. (the "Company") to repay the within
Debenture or portion thereof (which is $1,000 or an integral multiple thereof)
below designated, in accordance with the terms of the Indenture referred to in
this Debenture at the repayment price, together with accrued interest to, but
excluding, such date, to the registered holder hereof.
Dated: ______________________ _____________________________________
_____________________________________
Signature(s)
NOTICE: The above signatures of the
holder(s) hereof must correspond with the
name as written upon the face of the
Debenture in every particular without
alteration or enlargement or any change
whatever.
Principal amount to be repaid (if less
than all):
$________________________________
_________________________________
Social Security or Other Taxpayer
Identification Number
<PAGE>
OPTION TO ELECT REPAYMENT
UPON A FUNDAMENTAL CHANGE
To: OMNICOM GROUP INC.
The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Omnicom Group Inc. (the "Company") as to
the occurrence of a Fundamental Change with respect to the Company and requests
and instructs the Company to repay the entire principal amount of this Debenture
below designated, in accordance with the terms of the Indenture referred to in
this Debenture at the repayment price, together with accrued interest to, but
excluding, such date, to the registered holder hereof.
Dated: ______________________ _____________________________________
_____________________________________
Signature(s)
NOTICE: The above signatures of the
holder(s) hereof must correspond with the
name as written upon the face of the
Debenture in every particular without
alteration or enlargement or any change
whatever.
Principal amount to be repaid (not less
than all for Debentures in certificated
form):
$_________________________________
__________________________________
Social Security or Other Taxpayer
Identification Number
<PAGE>
ASSIGNMENT
For value received ________________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________ (Please insert social security or other
Taxpayer Identification Number of assignee) the within Debenture, and hereby
irrevocably constitutes and appoints ________________ attorney to transfer the
said Debenture on the books of Omnicom Group Inc. with full power of
substitution in the premises.
In connection with any transfer of the Debenture within the period prior to
the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act of 1933, as amended (or any successor
provision), the undersigned confirms that such Debenture is being transferred:
[ ] To Omnicom Group Inc. or a subsidiary thereof; or
[ ] Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
[ ] To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended;
and unless the box below is checked, the undersigned confirms that such
Debenture is not being transferred to an "affiliate" of Omnicom Group Inc. as
defined in Rule 144 under the Securities Act of 1933, as amended (an
"Affiliate").
<PAGE>
[ ] The transferee is an Affiliate of Omnicom Group Inc.
Dated:____________________
_________________________________
_________________________________
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a
member firm of a major stock exchange if
shares of Common Stock are to be issued,
or Debentures to be delivered, other than
to and in the name of the registered
holder.
_________________________________
Signature Guarantee
Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of January 3, 1997, by and among Omnicom Group Inc., a New York
corporation (the "Company") and Morgan Stanley & Co. Incorporated (the "Initial
Purchaser") pursuant to the Placement Agreement, dated as of December 11, 1996
(the "Placement Agreement"), between the Company and the Initial Purchaser. In
order to induce the Initial Purchaser to enter into the Placement Agreement the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution of this Agreement is a condition to the closing under
the Placement Agreement.
The Company agrees with the Initial Purchaser, (i) for its benefit as
Initial Purchaser and (ii) for the benefit of the holders from time to time of
the Debentures (including the Initial Purchaser) and the holders from time to
time of the Common Stock issued upon conversion of the Debentures (each of the
foregoing a "Holder" and together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition shall have
their respective meanings set forth in the Placement Agreement. As used in this
Agreement, the following terms shall have the following meanings:
Affiliate: "Affiliate" means, with respect to any specified person,
(i) any other person directly or indirectly controlling or controlled by,
or under direct or indirect common control with, such specified person or
(ii) any officer or director of such other person. For purposes of this
definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a person means the
possession, direct or indirect, of the power (whether or not exercised) to
direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract, or
otherwise.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
Common Stock: The shares of common stock, $.50 par value per share, of
the Company and any other shares of common stock as may constitute "Common
Stock" for purposes of the Indenture, in each case, as issuable or issued
upon conversion of the Debentures.
Damages Accrual Period: See Section 2(e) hereof.
Damages Payment Date: Each of the semi-annual interest payment dates
provided in the Indenture.
Deferral Period: See Section 2(d) hereof.
<PAGE>
Effectiveness Period: The period commencing with the date hereof and
ending on the date that all Registrable Securities have ceased to be
Registrable Securities.
Event: See Section 2(e) hereof.
Event Date: See Section 2(e) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Filing Date: See Section 2(a) hereof.
Holder: See the second paragraph of this Agreement.
Indenture: The Indenture, dated as of January 3, 1997, between the
Company and The Chase Manhattan Bank, pursuant to which the Debentures are
being issued, as amended or supplemented from time to time in accordance
with the terms hereof.
Initial Purchaser: Morgan Stanley & Co. Incorporated.
Initial Shelf Registration: See Section 2(a) hereof.
Liquidated Damages: See Section 2(e) hereof.
Losses: See Section 6 hereof.
Debentures: The 4-1/4% Convertible Subordinated Debentures due 2004 of
the Company being issued and sold pursuant to the Placement Agreement and
the Indenture.
Notice Holder: See Section 2(d)(i) hereof.
Placement Agreement: See the first paragraph of this Agreement.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such
Prospectus.
Record Holder: (i) with respect to any Damages Payment Date relating
to any Debenture as to which any such Liquidated Damages have accrued, the
registered holder of such Debenture on the record date with respect to the
interest payment date under the Indenture on which such Damages Payment
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<PAGE>
Date shall occur and (ii) with respect to any Damages Payment Date relating
to any Common Stock as to which any such Liquidated Damages have accrued,
the registered holder of such Common Stock 15 days prior to the next
succeeding Damages Payment Date.
Registrable Securities: (A) The Common Stock into which the Debentures
are convertible or converted, whether or not such Debentures have been
converted, and at all times subsequent thereto, and any Common Stock issued
with respect thereto upon any stock dividend, split or similar event until,
in the case of any such Common Stock, (i) it is effectively registered
under the Securities Act and disposed of in accordance with the
Registration Statement covering it, (ii) it is saleable by the holder
thereof pursuant to Rule 144(k) or (iii) it is sold to the public pursuant
to Rule 144, and, as a result of the event or circumstance described in any
of the foregoing clauses (i) through (iii), the legends with respect to
transfer restrictions required under the Indenture (other than any such
legends required solely as the consequence of the fact that such Common
Stock (or the Debentures, upon the conversion of which, such Common Stock
was issued or is issuable) is owned by, or was previously owned by, the
Company or an Affiliate of the Company) are removed or removable in
accordance with the terms of the Indenture; (B) the Debentures, until, in
the case of any such Debenture, (i) it is converted into shares of Common
Stock in accordance with the terms of the Indenture, (ii) it is effectively
registered under the Securities Act and disposed of in accordance with the
Registration Statement covering it, (iii) it is saleable by the holder
thereof pursuant to Rule 144(k) or (iv) it is sold to the public pursuant
to Rule 144, and, as a result of the event or circumstance described in any
of the foregoing clauses (ii) through (iv), the legends with respect to
transfer restrictions required under the Indenture (other than any such
legends required solely as the consequence of the fact that such Debenture
is owned by, or was previously owned by, the Company or an Affiliate of the
Company) are removed or removable in accordance with the terms of the
Indenture.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration statement of the Company
which covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to
such registration statement, including post-effective amendments, all
exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
3
<PAGE>
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
Selling Period: See Section 2(d)(i) hereof.
Shelf Registration: See Section 2(a) hereof.
Special Counsel: Davis Polk & Wardwell or such successor counsel as
shall be specified by the Holders of a majority of the Registrable
Securities, the fees and expenses of which will be paid by the Company
pursuant to Section 5 hereof.
Subsequent Shelf Registration: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The Trustee under the Indenture.
2. Shelf Registration.
(a) The Company shall prepare and file with the SEC, as soon as practicable
but in any event on or prior to the date ninety (90) days following the latest
date of original issuance of the Debentures (the "Filing Date"), a Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415
of the Securities Act (a "Shelf Registration") registering the resale from time
to time by Holders thereof of all of the Registrable Securities (the "Initial
Shelf Registration"). The Initial Shelf Registration shall be on Form S-3 or
another appropriate form permitting registration of such Registrable Securities
for resale by the Holders in the manner or manners designated by them. The
manner of sale may include, without limitation, a sale to a dealer acting as
principal for resale to the public. The Company shall use its reasonable efforts
to cause the Initial Shelf Registration to be declared effective under the
Securities Act as soon as practicable and to keep the Initial Shelf Registration
continuously effective under the Securities Act until the earlier of the
expiration of the Effectiveness Period or the date a Subsequent Shelf
Registration, as defined below, covering all of the Registrable Securities has
been declared effective under the Securities Act.
(b) If the Initial Shelf Registration or any Subsequent Shelf Registration,
as defined below, ceases to be effective for any reason as a result of the
issuance of a stop order by the SEC at any time during the Effectiveness Period,
the Company shall use its reasonable efforts to obtain the prompt withdrawal of
any order suspending the effectiveness thereof, and in any event shall within
thirty (30) days of such cessation of effectiveness amend the Shelf Registration
in a manner reasonably expected to obtain the withdrawal of the order suspending
the effectiveness thereof, or file an additional Shelf Registration covering all
of the Registrable Securities (a "Subsequent Shelf Registration"). If a
Subsequent Shelf Registration is filed, the Company shall use its reasonable
efforts to cause the Subsequent Shelf Registration to be
4
<PAGE>
declared effective as soon as practicable after such filing and to keep such
Registration Statement continuously effective until the end of the Effectiveness
Period.
(c) The Company shall supplement and amend the Shelf Registration if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration, if required
by the Securities Act, or if reasonably requested by the Initial Purchaser or by
the Trustee on behalf of a majority of the Holders of the Registrable Securities
covered by such Registration Statement.
(d) Each Holder of Registrable Securities agrees that if such Holder wishes
to sell its Registrable Securities pursuant to a Shelf Registration and related
Prospectus, it will do so only in accordance with this Section 2(d). Each Holder
of Registrable Securities agrees to give written notice to the Company at least
three Business Days prior to any intended distribution of Registrable Securities
under the Shelf Registration, which notice shall specify the date on which such
Holder intends to begin such distribution and any information with respect to
such Holder and the intended distribution of Registrable Securities by such
Holder as may be required to amend the Registration Statement or supplement the
related Prospectus with respect to such intended distribution of Registrable
Securities by such Holder (the "Requisite Information"). In the event the Holder
fails to provide the Requisite Information in its initial notice of its
intention to distribute the Registrable Securities pursuant to the Registration
Statement, the Company will promptly request such Holder to provide such
Requisite Information. As soon as practicable after the date such notice is
provided, and in any event within two Business Days after such date, the Company
shall either:
(i) (A) If necessary, prepare and file with the Commission a post
effective amendment to the Shelf Registration or a supplement to the
related Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required document so
that such Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and so
that, as thereafter delivered to purchasers of the Registrable Securities
being sold thereunder, such Prospectus will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (B) provide each
Notice Holder (as defined below) copies of any documents filed pursuant to
Section 2(d)(i)(A); and (C) inform each Notice Holder that the Company has
complied with its obligations in Section 2(d)(i)(A) (or that, if the
Company has filed a post-effective amendment to the Shelf Registration
which has not yet been declared effective, the Company will notify the
Notice Holder to that effect, will use its reasonable efforts to secure the
effectiveness of such post-effective amendment and will immediately notify
the Notice Holder when the amendment has become effective); each Holder who
has given notice of intention to distribute such Holder's Registrable
Securities in accordance with Section 2(d) hereof (a "Notice Holder") will
sell all or any of such Registrable Securities pursuant to the Shelf
Registration and related Prospectus only during the 45-day period
commencing with the date on
5
<PAGE>
which the Company gives notice, pursuant to Section 2(d)(i)(C), that the
Registration Statement and Prospectus may be used for such purpose (such
45-day period is referred to as a "Selling Period"). The Notice Holders
will not sell any Registrable Securities pursuant to such Registration
Statement or Prospectus after such Selling Period without giving a new
notice of intention to sell pursuant to Section 2(d) hereof and receiving a
further notice from the Company pursuant to Section 2(d)(i)(C) hereof.
(ii) in the event (A) of the happening of any event of the kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), or 3(c)(vi)
hereof or (B) that, in the judgment of the Company, it is advisable to
suspend use of the Prospectus for a discrete period of time due to pending
material corporate developments or similar material events that have not
yet been publicly disclosed and as to which the Company believes public
disclosure will be prejudicial to the Company, the Company shall deliver a
certificate in writing, signed by an authorized executive officer of the
Company, to the Notice Holders and the Special Counsel to the effect of the
foregoing and, upon receipt of such certificate, each such Notice Holder's
Selling Period will not commence until such Notice Holder's receipt of
copies of the supplemented or amended Prospectus provided for in Section
2(d)(i)(A) hereof, or until it is advised in writing by the Company that
the Prospectus may be used and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by
reference in such Prospectus. The Company will use its reasonable efforts
to ensure that the use of the Prospectus may be resumed, and the Selling
Period will commence, as soon as practicable and, in the case of a pending
development or event referred to in Section 2(d)(ii)(B) hereof, as soon as
the earlier of (x) public disclosure of such pending material corporate
development or similar material event or (y) in the judgment of the
Company, public disclosure of such material corporate development or
similar material event would not be prejudicial to the Company.
Notwithstanding the foregoing, the Company shall not under any
circumstances be entitled to exercise its right under this Section 2(d)(ii)
to defer the commencement of a Selling Period except as follows: the
Company may defer the commencement of a Selling Period in accordance with
this Section 2(d)(ii) for a period not to exceed 30 days in any three-month
period, or not to exceed an aggregate of 60 days in any 12-month period,
and the period in which a Selling Period is suspended shall not exceed
fifteen (15) days unless the Company shall deliver to such Notice Holders a
second notice to the effect set forth above, which shall have the effect of
extending the period during which such Selling Period is deferred by up to
an additional fifteen (15) days, or such shorter period of time as is
specified in such second notice. In no event shall the Company be permitted
to extend the period during which such Selling Period is deferred (a
"Deferral Period") beyond such thirty (30) day period from and after the
date a Notice Holder provides notice to the Company in accordance with this
Section 2(d) of its intention to distribute Registrable Securities.
(e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if (i) the Initial Shelf Registration has not
been filed on or prior to the Filing Date, (ii) prior to the end of the
Effectiveness Period, the SEC shall have issued a stop order suspending
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the effectiveness of the Shelf Registration or proceedings have been initiated
with respect to the Shelf Registration under Section 8(d) or 8(e) of the
Securities Act, (iii) the aggregate number of days in any one Deferral Period
exceeds the periods permitted pursuant to Section 2(d)(ii) hereof or (iv) the
number of Deferral Periods exceeds the number permitted pursuant to Section
2(d)(ii) hereof (each of the events of a type described in any of the foregoing
clauses (i) through (iv) are individually referred to herein as an "Event," and
the Filing Date in the case of clause (i), the date on which the effectiveness
of the Shelf Registration has been suspended or proceedings with respect to the
Shelf Registration under Section 8(d) or 8(e) of the Securities Act have been
commenced in the case of clause (ii), the date on which the duration of a
Deferral Period exceeds the periods permitted by Section 2(d)(ii) hereof in the
case of clause (iii), and the date of the commencement of a Deferral Period that
causes the limit on the number of Deferral Periods under Section 2(d)(ii) hereof
to be exceeded in the case of clause (iv), being referred to herein as an "Event
Date"). Events shall be deemed to continue until the date of the termination of
such Event, which shall be the following dates with respect to the respective
types of Events: the date the Initial Registration Statement is filed in the
case of an Event of the type described in clause (i), the date that all stop
orders suspending effectiveness of the Shelf Registration have been removed and
the proceedings initiated with respect to the Shelf Registration under Section
8(d) or 8(e) of the Securities Act have terminated, as the case may be, in the
case of Events of the types described in clause (ii), termination of the
Deferral Period which caused the aggregate number of days in any one Deferral
Period to exceed the number permitted by Section 2(d)(ii) to be exceeded in the
case of Events of the type described in clause (iii), and termination of the
Deferral Period the commencement of which caused the number of Deferral Periods
permitted by Section 2(d)(ii) to be exceeded in the case of Events of the type
described in clause (iv).
Accordingly, upon the occurrence of any Event and until such time as there
are no Events which have occurred and are continuing (a "Damages Accrual
Period"), commencing on the Event Date on which such Damages Accrual Period
began, the Company agrees to pay, as liquidated damages, and not as a penalty,
an additional amount (the "Liquidated Damages"): (A)(i) to each holder of a
Debenture that is a Notice Holder, accruing at a rate equal to one-half of one
percent per annum (50 basis points) on the aggregate principal amount of
Debentures held by such Notice Holder and (ii) to each holder of Common Stock
that is a Notice Holder, accruing at a rate equal to one-half of one percent per
annum (50 basis points) calculated on an amount equal to the product of (x) the
then-applicable Conversion Price (as defined in the Indenture), times (y) the
number of shares of Common Stock held by such holder; and (B) if the Damages
Accrual Period continues for a period in excess of thirty (30) days from the
Event Date, from and after the end of such thirty (30) days until such time as
there are no Events which have occurred and are continuing, (i) to each holder
of a Debenture (whether or not a Notice Holder), accruing at a rate equal to
one-half of one percent per annum (50 basis points) on the aggregate principal
amount of Debentures held by such holder and (ii) to each holder of Common Stock
(whether or not a Notice Holder), accruing at a rate equal to one-half of one
percent per annum (50 basis points) calculated on an amount equal to the product
of (x) the then applicable Conversion Price (as defined in the Indenture), times
(y) the number of shares of Common Stock held by such holder. Notwithstanding
the foregoing, no Liquidated Damages shall accrue under clause (A) of
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the preceding sentence during any period for which Liquidated Damages accrue
under clause (B) of the preceding sentence or as to any Registrable Securities
from and after the expiration of the Effectiveness Period. The rate of accrual
of the Liquidated Damages with respect to any period shall not exceed the rate
provided for in this paragraph notwithstanding the occurrence of multiple
concurrent Events.
The Company shall pay the Liquidated Damages due on any Debentures or
Common Stock by depositing with the Trustee under the Indenture, in trust, for
the benefit of the holders of Debentures or Common Stock or Notice Holders, as
the case may be, entitled thereto, at least one Business Day prior to the
applicable Damages Payment Date, sums sufficient to pay the Liquidated Damages
accrued or accruing since the last preceding Damages Payment Date through such
Damages Payment Date. The Liquidated Damages shall be paid by the Company to the
Record Holders on each Damages Payment Date by wire transfer of immediately
available funds to the accounts specified by them or by mailing checks to their
registered addresses as they appear in the Debenture register (as defined in the
Indenture), in the case of the Debentures, and in the register of the Company
for the Common Stock, in the case of the Common Stock, if no such accounts have
been specified on or before the Damage Payment Date; provided, however, that any
Liquidated Damages accrued with respect to any Debenture or portion thereof
called for redemption on a redemption date, repurchased on January 3, 2003 at
the option of the holder, or repurchased in connection with a Fundamental Change
(as defined in the Indenture) on a redemption date, repurchase date, or
converted into Common Stock on a conversion date prior to the Damages Payment
Date, shall, in any such event, be paid instead to the holder who submitted such
Debenture or portion thereof for redemption, repurchase or conversion on the
applicable redemption date, repurchase date or conversion date, as the case may
be, on such date (or promptly following the conversion date, in the case of
conversion of a Debenture). The Trustee shall be entitled, on behalf of the
holders of Debentures, holders of Common Stock and Notice Holders, to seek any
available remedy for the enforcement of this Agreement, including for the
payment of such Liquidated Damages. Notwithstanding the foregoing, the parties
agree that the sole damages payable for a violation of the terms of this
Agreement with respect to which Liquidated Damages are expressly provided shall
be such Liquidated Damages. Nothing shall preclude a Notice Holder or Holder of
Registrable Securities from pursuing or obtaining specific performance or other
equitable relief with respect to this Agreement, in addition to the payment of
Liquidated Damages.
All of the Company's obligations set forth in this Section 2(e) which are
outstanding with respect to any Registrable Securities at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of the Agreement pursuant to Section 8(o)).
The parties hereto agree that the Liquidated Damages provided for in this
Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities (other than the Initial Purchaser)
by reason of the failure of the Shelf Registration to be filed or declared
effective or unavailable (absolutely or as a practical matter) for effecting
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<PAGE>
resales of Registrable Securities, as the case may be, in accordance with the
provisions hereof.
3. Registration Procedures. In connection with the Company's registration
obligations under Section 2 hereof, the Company shall effect such registrations
to permit the sale of the Registrable Securities in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(a) Prepare and file with the SEC a Registration Statement or Registration
Statements on any appropriate form under the Securities Act available for the
sale of the Registrable Securities by the Holders thereof in accordance with the
intended method or methods of distribution thereof, and use its reasonable
efforts to cause each such Registration Statement to become effective and remain
effective as provided herein; provided, that before filing any such Registration
Statement or Prospectus or any amendments or supplements thereto (other than
documents that would be incorporated or deemed to be incorporated therein by
reference and that the Company is required by applicable securities laws or
stock exchange requirements to file) the Company shall furnish to the Initial
Purchaser and the Special Counsel copies of all such documents proposed to be
filed, which documents will be subject to the review of the Initial Purchaser
and the Special Counsel, and the Company shall not file any such Registration
Statement or amendment thereto or any Prospectus or any supplement thereto
(other than such documents which, upon filing, would be incorporated or deemed
to be incorporated by reference therein and that the Company is required by
applicable securities laws or stock exchange requirements to file) to which the
Holders of a majority of the Registrable Securities covered by such Registration
Statement, the Initial Purchaser or the Special Counsel shall reasonably object
in writing within two full Business Days.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable period
specified in Section 2; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act; and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement and Prospectus during
the applicable period in accordance with the intended methods of disposition by
the sellers thereof set forth in such Registration Statement as so amended or
such Prospectus as so supplemented.
(c) Notify the Notice Holders, the Initial Purchaser, and the Special
Counsel promptly, and (if requested by any such person) confirm such notice in
writing, (i) when a Prospectus, any Prospectus supplement, a Registration
Statement or a post-effective amendment to a Registration Statement has been
filed with the SEC, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or related Prospectus or
for additional information, (iii) of the issuance by the SEC or any other
federal or state governmental authority of any stop order
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suspending the effectiveness of a Registration Statement or the initiation or
threatening of any proceedings for that purpose, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the existence of any fact or happening of any event which makes
any statement of a material fact in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue or which would require the making of any changes in the
Registration Statement or Prospectus in order that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and (vi) of the Company's determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) Use its reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest possible
moment.
(e) If reasonably requested by the Initial Purchaser or the Holders of a
majority of the Registrable Securities being sold, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment to a Registration Statement
such information as the Initial Purchaser, the Special Counsel, or such Holders,
in connection with any offering of Registrable Securities, agree should be
included therein as required by applicable law, and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
provided, that the Company shall not be required to take any actions under this
Section 3(e) that are not, in the reasonable opinion of counsel for the Company,
in compliance with applicable law.
(f) Furnish to each selling Holder, the Special Counsel and the Initial
Purchaser, without charge, at least one conformed copy of the Registration
Statement or Statements and any amendment thereto, including financial
statements but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits (unless requested in writing
by such selling Holder, counsel or the Initial Purchaser).
(g) Deliver to each selling Holder, the Special Counsel and the Initial
Purchaser, in connection with any offering of Registrable Securities, without
charge, as many copies of the Prospectus or Prospectuses relating to such
Registrable Securities (including each preliminary prospectus) and any amendment
or supplement thereto as such persons may reasonably request; and the Company
hereby consents to the use of such Prospectus or each
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<PAGE>
amendment or supplement thereto by each of the selling Holders of Registrable
Securities and the underwriters, if any, in connection with any offering and
sale of the Registrable Securities covered by such Prospectus or any amendment
or supplement thereto.
(h) Prior to any offering of Registrable Securities, to register or qualify
or cooperate with the selling Holders, and the Special Counsel in connection
with the registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any selling Holder, reasonably requests in writing; keep each such registration
or qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided, that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it is not then so
qualified or (ii) take any action that would subject it to general service of
process in suits or to taxation in any such jurisdiction where it is not then so
subject.
(i) Cause the Registrable Securities covered by the applicable Registration
Statement to be registered with or approved by such other governmental agencies
or authorities within the United States, except as may be required solely as a
consequence of the nature of such selling Holder, in which case the Company will
cooperate in all reasonable respects with the filing of such Registration
Statement and the granting of such approvals, as may be necessary to enable the
selling Holder or Holders thereof, to consummate the disposition of such
Registrable Securities.
(j) During any Selling Period (other than during a Deferral Period),
immediately upon the existence of any fact or the occurrence of any event as a
result of which a Registration Statement shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or a Prospectus
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, promptly prepare and file (subject to the proviso in Section 3(a)) a
post-effective amendment to each Registration Statement or a supplement to the
related Prospectus or any document incorporated therein by reference or file any
other required document (such as a Current Report on Form 8-K) that would be
incorporated by reference into the Registration Statement so that the
Registration Statement shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and so that the Prospectus will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, as
thereafter delivered to the purchasers of the Registrable Securities being sold
thereunder, and, in the case of a post-effective amendment to a Registration
Statement, use its reasonable efforts to cause it to become effective
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as soon as practicable.
(k) If requested in connection with a disposition of Registrable Securities
pursuant to a Registration Statement, make available for inspection by a
representative of the Holders of Registrable Securities being sold, and the
Special Counsel , financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the executive
officers, directors and employees of the Company and its subsidiaries to supply
all information reasonably requested by any such representative, or the Special
Counsel in connection with such disposition; subject to reasonable assurances by
each such person that such information will only be used in connection with
matters relating to such Registration Statement; provided, however, that such
persons shall first agree in writing with the Company that any information that
is reasonably and in good faith designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to Federal
securities laws in connection with the filing of any Registration Statement or
the use of any prospectus referred to in this Agreement), (iii) such information
becomes generally available to the public other than as a result of a disclosure
or failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement.
(l) Comply with all applicable rules and regulations of the SEC and make
generally available to its securityholders earning statements (which need not be
audited) satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) (i) commencing at
the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment or best efforts underwritten offering and (ii)
if not sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Company commencing after the effective date of a
Registration Statement, which statements shall cover said 12-month periods.
(m) Cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends; and
enable such Registrable Securities to be in such denominations and registered in
such names as such Holders may request.
(n) Provide the Trustee under the Indenture and the transfer agent for the
Common Stock with printed certificates for the Registrable Securities which are
in a form eligible for deposit with The Depository Trust Company.
(o) Cause the Common Stock covered by the Registration Statement to be
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listed on each securities exchange or quoted on each automated quotation system
on which any of the Company's "Common Stock," as that term is defined in the
Indenture, is then listed or quoted) no later than the date the Registration
Statement is declared effective and, in connection therewith, to the extent
applicable, to make such filings under the Exchange Act (e.g., the filing of a
Registration Statement on Form 8-A) and to have such filings declared effective
thereunder.
(p) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.
Nothing herein shall obligate the Company to provide accountants' "cold comfort"
letters, opinions of counsel, or to enter into underwriting agreements, as would
be customary in an underwritten offering (or incur any expenses in connection
therewith) unless otherwise specifically agreed to by the Company at such time.
4. Holder's Obligations. Each Holder agrees, by acquisition of the
Debentures and Registrable Securities, that no Holder of Registrable Securities
shall be entitled to sell any of such Registrable Securities pursuant to a
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with the notice required pursuant to Section
2(d) hereof and such other information regarding such Holder and the
distribution of such Registrable Securities as may be required to be included in
the Registration Statement or the Prospectus or as the Company may from time to
time reasonably request. The Company may exclude from such registration the
Registrable Securities of any Holder who does not furnish such information
provided above for so long as such information is not so furnished. Each Holder
of Registrable Securities as to which any Registration Statement is being
effected agrees promptly to furnish to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not misleading. Any sale of any Registrable Securities by
any Holder shall constitute a representation and warranty by such Holder that
the information relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection with such
disposition, that such Prospectus does not as of the time of such sale contain
any untrue statement of a material fact relating to such Holder or its plan of
distribution and that such Prospectus does not as of the time of such sale omit
to state any material fact relating to such Holder or its plan of distribution
necessary to make the statements in such Prospectus, in light of the
circumstances under which they were made, not misleading.
5. Registration Expenses. All fees and expenses incident to the Company's
performance of or compliance with this Agreement shall be borne by the Company
whether or not any of the Registration Statements become effective. Such fees
and expenses shall include, without limitation, (i) all registration and filing
fees (including, without limitation, fees and expenses (x) with respect to
filings required to be made with the SEC or the National Association of
Securities Dealers, Inc. and (y) relating to compliance with federal securities
or Blue Sky laws (including, without limitation, fees and disbursements of
Special Counsel in connection with Blue Sky qualifications of the Registrable
Securities under the laws of such
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jurisdictions as the Holders of a majority of the Registrable Securities being
sold may designate)), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities in a form eligible
for deposit with The Depository Trust Company and of printing prospectuses if
the printing of prospectuses is requested by the Special Counsel or the Holders
of a majority of the Registrable Securities included in any Registration
Statement), (iii) the reasonable fees and disbursements of the Trustee and its
counsel and of the registrar and transfer agent for the Common Stock, (iv)
messenger, telephone and delivery expenses relating to the performance of the
Company's obligations hereunder, (v) reasonable fees and disbursements of
counsel for the Company and the Special Counsel in connection with the Shelf
Registration (provided that the Company shall not be liable for the fees and
expenses of more than one separate firm, in addition to counsel for the Company,
for all parties participating in any transaction hereunder) and (vi) Securities
Act liability insurance, to the extent obtained by the Company in its sole
discretion. In addition, the Company shall pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties and auditors' fees), the expense of any
annual audit, the fees and expenses incurred in connection with the listing of
the securities to be registered on any securities exchange on which similar
securities issued by the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company. Notwithstanding
the provisions of this Section 5, each seller of Registrable Securities shall
pay all selling expenses and all registration expenses to the extent that the
Company is prohibited by applicable Blue Sky laws from paying for or on behalf
of such seller of Registrable Securities.
6. Indemnification.
(a) Indemnification by the Company. The Company shall indemnify and hold
harmless the Initial Purchaser, each Holder and each person, if any, who
controls the Initial Purchaser or any Holder (within the meaning of either
Section 15 of the Securities Act or Section 20(a) of the Exchange Act) from and
against all losses, liabilities, damages and expenses (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (collectively, "Losses"),
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement or Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such Losses arise out of or are based upon the
information relating to the Initial Purchaser or any Holder furnished to the
Company in writing by the Initial Purchaser or such Holder expressly for use
therein; provided, that the Company shall not be liable to any Holder of
Registrable Securities (or any person controlling such Holder) to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus if either (A)(i) such Holder failed to send or deliver a copy of the
Prospectus with or prior to the delivery of written confirmation of the sale by
such Holder to the person asserting the claims from which such Losses arise and
(ii) the Prospectus would have corrected such untrue statement or alleged
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untrue statement or such omission or alleged omission, or (B)(x) such untrue
statement or alleged untrue statement, omission or alleged omission is corrected
in an amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Holder thereafter fails to deliver such Prospectus
as so amended or supplemented, with or prior to the delivery of written
confirmation of the sale of a Registrable Security to the person asserting the
claim from which such Losses arise. The Company shall also indemnify each person
purchasing Registrable Securities from a Holder who is an "underwriter" as
defined in the Securities Act and each person who controls such person (within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) to the same extent and with the same limitations as provided above with
respect to the indemnification of the Initial Purchaser or the Holders of
Registrable Securities.
(b) Indemnification by Holder of Registrable Securities. Each Holder
agrees, and such agreement shall be evidenced by the Holder delivering the
notice described in Section 2(d) hereof, severally and not jointly to indemnify
and hold harmless the Initial Purchaser, the other selling Holders, the Company,
its directors, its officers who sign a Registration Statement, and each person,
if any, who controls the Company, the Initial Purchaser and any other selling
Holder (within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act), from and against all losses arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus or preliminary prospectus or
arising out of or based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue statement or
omission is contained in any information relating to such Holder so furnished in
writing by such Holder to the Company expressly for use in such Registration
Statement or Prospectus. In no event shall the liability of any selling Holder
of Registrable Securities hereunder be greater in amount than the dollar amount
of the proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties
15
<PAGE>
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall not,
in respect of the legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for the Initial Purchaser and all persons, if any, who control the
Initial Purchaser within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, (b) the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Holders and all
persons, if any, who control any Holder within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, and (c) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Company, its directors, its officers who sign a Registration Statement and
each person, if any, who controls the Company within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In such case involving the Initial
Purchaser and persons who control the Initial Purchaser, such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated. In such case
involving the Holders and such persons who control Holders, such firm shall be
designated in writing by the Holders of the majority of Registrable Securities
sold pursuant to the Registration Statement. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party,
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability or claims that are the subject matter
of such proceeding.
(d) Contribution. If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under Section 6(a) or 6(b) hereof in respect
of any Losses or is insufficient to hold such indemnified party harmless, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such Losses, (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party or parties on the other hand or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only
16
<PAGE>
the relative benefits referred to in clause (i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such Losses, as well as any other relevant
equitable considerations. Benefits received by the Company shall be deemed to be
equal to the total net proceeds from the initial placement (before deducting
expenses) of the Debentures pursuant to the Placement Agreement. Benefits
received by the Initial Purchaser shall be deemed to be equal to the total
purchase discounts and commissions received by it pursuant to the Placement
Agreement and benefits received by any other Holders shall be deemed to be equal
to the value of receiving Debentures registered under the Securities Act.
Benefits received by any underwriter shall be deemed to be equal to the total
underwriting discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Registration Statement which resulted in such
Losses. The relative fault of the Holders on the one hand and the Company on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Holders
or by the Company and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Holders' respective obligations to contribute pursuant to this paragraph are
several in proportion to the respective number of Registrable Securities they
have sold pursuant to a Registration Statement, and not joint.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method or allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 6(d), an
indemnifying party that is a selling Holder of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such indemnifying party and
distributed to the public were offered to the public exceeds the amount of any
damages which such indemnifying party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement obligations of the
Company hereunder shall be in addition to any liability the Company may
otherwise have hereunder, under the Placement Agreement or otherwise. The
provisions of this Section 6 shall survive so long as Registrable Securities
remain outstanding, notwithstanding any transfer of the Registrable Securities
by any Holder or any termination of this Agreement.
17
<PAGE>
The indemnity and contribution provisions contained in this Section 6
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Initial Purchaser, any Holder or any person controlling any Holder, or the
Company, its officers or directors or any person controlling the Company and
(iii) the sale of any Registrable Securities by any Holder.
7. Information Requirements.
(a) The Company shall file the reports required to be filed by it under the
Securities Act and the Exchange Act, and if at any time the Company is not
required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. The Company further covenants that it will cooperate with any
Holder of Registrable Securities and take such further reasonable action as any
Holder of Registrable Securities may reasonably request (including, without
limitation making such reasonable representations as any such Holder may
reasonably request), all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 and Rule 144A
under the Securities Act. Upon the request of any Holder of Registrable
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such filing requirements. Notwithstanding the
foregoing, nothing in this Section 7 shall be deemed to require the Company to
register any of its securities under any section of the Exchange Act.
(b) The Company shall file the reports required to be filed by it under the
Exchange Act and shall comply with all other requirements set forth in the
instructions to Form S-3 in order to allow the Company to be eligible to file
registration statements on Form S-3.
8. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its obligations
under this Agreement, each Holder of Registrable Securities, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement; provided that the sole damages payable for a violation of the terms
of this Agreement for which Liquidated Damages are expressly provided pursuant
to Section 2(e) hereof shall be such Liquidated Damages. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would be
adequate.
(b) No Conflicting Agreements. The Company has not, as of the date hereof
and shall not, on or after the date of this Agreement, enter into any agreement
with respect to its securities which conflicts with the rights granted to the
Holders of Registrable
18
<PAGE>
Securities in this Agreement. The Company represents and warrants that the
rights granted to the Holders of Registrable Securities hereunder do not in any
way conflict with the rights granted to the holders of the Company's securities
under any other agreements.
(c) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of Holders of a majority of
the then outstanding Common Stock constituting Registrable Securities (with
Holders of Debentures deemed to be the Holders, for purposes of this Section, of
the number of outstanding shares of Common Stock into which such Debentures are
convertible). Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders of Registrable Securities may be given by
Holders of at least a majority of the Registrable Securities being sold by such
Holders; provided, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(d) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing and shall be deemed given (i) when made, if
made by hand delivery, (ii) upon confirmation, if made by telecopier or (iii)
one business day after being deposited with a reputable next-day courier,
postage prepaid, to the parties as follows:
(x) if to a Holder of Registrable Securities, at the most current
address given by such Holder to the Company in accordance with the
provisions of Section 8(e);
(y) if to the Company, to:
Omnicom Group Inc.
437 Madison Avenue, 9th Floor
New York, NY 10022
Telephone: (212) 415-3600
Telecopy No.: (212) 415-3536
with a copy to:
Davis & Gilbert
1740 Broadway
New York, New York 10019
Attention: Mike Ditzian
Telephone: (212) 468-4800
Telecopy No.: (212) 468-4888
19
<PAGE>
and
(z) if to the Special Counsel to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Francis J. Morison
Telecopy No: (212) 450-4800
or to such other address as such person may have furnished to the other persons
identified in this Section 8(d) in writing in accordance herewith.
(e) Owner of Registrable Securities. The Company will maintain, or will
cause its registrar and transfer agent to maintain, a register with respect to
the Registrable Securities in which all transfers of Registrable Securities of
which the Company has received notice will be recorded. The Company may deem and
treat the person in whose name Registrable Securities are registered in such
register of the Company as the owner thereof for all purposes, including without
limitation, the giving of notices under this Agreement.
(f) Approval of Holders. Whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder, (i)
Holders of Debentures shall be deemed to be Holders, for such purposes, of the
number of outstanding shares of Common Stock into which such Debentures are
convertible and (ii) Registrable Securities held by the Company or its
affiliates (as such term is defined in Rule 405 under the Securities Act) (other
than the Initial Purchaser or subsequent Holders of Registrable Securities if
such subsequent Holders are deemed to be such affiliates solely by reason of
their holdings of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
(g) Successors and Assigns. Any person who purchases any Registrable
Securities from an Initial Purchaser shall be deemed, for purposes of this
Agreement, to be an assignee of such Initial Purchaser. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities.
(h) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
20
<PAGE>
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
(k) Severability. If any term, provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, and the parties hereto shall use their best efforts to find
and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such which may be hereafter declared invalid, illegal,
void or unenforceable.
(l) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and the registration rights granted by the
Company with respect to the Registrable Securities. Except as provided in the
Placement Agreement, there are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and understandings
among the parties with respect to such registration rights.
(m) Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, shall be
entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(n) Further Assurances. Each of the parties hereto shall use all reasonable
efforts to take, or cause to be taken, all appropriate action, do or cause to be
done all things reasonably necessary, proper or advisable under applicable law,
and execute and deliver such documents and other papers, as may be required to
carry out the provisions of this Agreement and the other documents contemplated
hereby and consummate and make effective the transactions contemplated hereby.
(o) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Sections 4, 5 or 6 hereof and the
obligations to make payments of and provide for Liquidated Damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
their terms.
21
<PAGE>
22
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
OMNICOM GROUP INC.
By:__________________________________
Name:
Title:
- -----------------------------------------------------------------------------
Accepted as of the date first above written:
MORGAN STANLEY & CO. INCORPORATED
By:_______________________________________
Name: William H. Wright, II
Title: Principal
23
Exhibit 5.1
DAVIS & GILBERT
1740 Broadway
New York, New York 10019
Omnicom Group Inc.
437 Madison Avenue
New York, NY 10022
Re: Registration Statement on Form S-3
Gentlemen:
In our capacity as counsel to Omnicom Group Inc., a New York corporation
(the "Company"), we have been asked to render this opinion in connection with a
Registration Statement on Form S-3 (the "Registration Statement") being filed by
the Company contemporaneously herewith with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, covering an aggregate
of (i) $218,500,000 Principal Amount of 4 1/4% Convertible Subordinated
Debentures due 2007 (the "Debentures") of the Company, and (ii) 3,468,254 shares
of common stock, $.50 par value, of the Company initially issuable upon
conversion of such Debentures plus such indeterminate amount of shares of Common
Stock as may become issuable upon conversion of the Debentures as a result of
adjustments to the conversion price (the "Shares"). The Debentures and the
Shares registered by the Registration Statement are to be offered for the
respective accounts of the holders thereof.
In that connection, we have examined the Certificate of Incorporation and
the By-Laws, both as amended, of the Company, the Indenture dated as of January
3, 1997 (the "Indenture") between the Company and The Chase Manhattan Bank, as
trustee, the Registration Rights Agreement dated as of January 3, 1997 between
the Company and Morgan Stanley & Co. Incorporated, the Registration Statement,
corporate proceedings relating to the issuance of the Debentures and the Shares,
and such other instruments and documents as we deemed relevant under the
circumstances.
In making the aforesaid examinations, we have assumed the genuineness of
all signatures and the conformity to original documents of all copies furnished
to us as original or photostatic copies. We have also assumed that the corporate
records furnished to us by the Company include all corporate proceedings taken
by the Company to date.
Based upon and subject to the foregoing, we are of the opinion (i) that the
Debentures have been duly authorized and are valid and binding obligations of
the Company and (ii) that the Shares have been duly authorized and, when issued
upon conversion of the Debentures in accordance with the terms of the Indenture,
will be validly issued, fully paid and nonassessable shares of common stock,
$.50 par value, of the Company.
We hereby consent to the use of our opinion as herein set forth as an
exhibit to the Registration Statement and to the use of our name under the
caption "Legal Matters" in the Prospectus forming part of the Registration
Statement.
Very truly yours,
DAVIS & GILBERT
Exhibit 8.1
February 28, 1997
Omnicom Group Inc.
437 Madison Avenue
New York, NY 10022
Dear Sirs:
As Tax Counsel of Omnicom Group Inc. (the "Company"), I am rendering this
opinion in connection with the preparation of the Registration Statement dated
February 28, 1997 relating to its 4 1/4% Convertible Subordinated Debentures due
2007 (the "Debentures").
For purposes of this letter, I have examined, among other items, the
Registration Statement and originals or copies, certified or otherwise
identified to my satisfaction, of such documents relating to the issuance of the
Debentures as I have deemed relevant and necessary.
I hereby confirm the opinion set forth in the Registration Statement under
the heading "Certain Federal Income Tax Considerations". I hereby consent to the
use of my name under the caption "Certain Federal Income Tax Considerations" in
the Registration Statement. The issuance of such a consent does not concede that
I am an "Expert" for purposes of the Securities Act of 1933, as amended.
The discussion of tax considerations in the Registration Statement is based
on the Internal Revenue Code of 1986, as amended to the date of the Registration
Statement (the "Code"), administrative pronouncements, judicial decisions, and
existing and proposed Treasury Regulations, changes to any of which subsequent
to the date hereof may affect the tax consequences described in the Registration
Statement (possibly on a retroactive basis). The discussion does not deal with
all aspects of federal income taxation that may be relevant to a particular
investor's decision to purchase the Debentures, and it is not intended to be
wholly applicable to all categories of investors. In addition, the discussion is
limited to persons who hold the Debentures as capital assets within the meaning
of section 1221 of the Code.
All prospective purchasers of the Debentures should consult their own tax
advisors regarding the federal, state, local and foreign tax consequences of the
purchase, ownership and disposition of the Debentures.
Very truly yours,
Kevin R. Conzelmann
Exhibit 12.1
OMNICOM GROUP INC.
Ratio of Earnings to Fixed Charges
1991-1996
($000's)
<TABLE>
<CAPTION>
1996
1991 1992 1993 1994 1995 Q3 YTD
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Earnings as defined:
Profit before tax as reported ..... $104,329 $116,196 $121,678 $188,914 $242,653 $205,276
Add: Dividends from affiliates .... 6,735 5,833 6,357 7,838 15,146 10,167
Interest expense ............... 42,190 51,390 47,105 40,485 43,271 26,745
Interest factor re: rentals
(as calculated below) .......... 38,908 44,106 49,888 50,851 56,357 50,251
-------- -------- -------- -------- -------- --------
Total earnings .................... $192,162 $217,525 $225,028 $288,088 $357,427 $292,439
======== ======== ======== ======== ======== ========
Fixed charges as defined:
Interest expense .................. $ 42,190 $ 51,390 $ 47,105 $ 40,485 $ 43,271 $ 26,745
Interest factor re: rentals
(as calculated below) .......... 38,908 44,106 49,888 50,851 56,357 50,251
-------- -------- -------- -------- -------- --------
Total fixed charges ............... $ 81,098 $ 95,496 $ 96,993 $ 91,336 $ 99,628 $ 76,996
======== ======== ======== ======== ======== ========
Ratio of earnings/
Fixed charges .................. 2.37 2.28 2.32 3.15 3.59 3.80
Total rent ........................ 116,725 132,317 149,664 152,553 169,072 150,752
Interest factor (1/3 of total) .... 38,908 44,106 49,888 50,851 56,357 50,251
</TABLE>
Notes:
1) Amortization of debt issuance costs and put premiums are included in
interest expense.
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Omnicom Group Inc. on Form S-3 of our report dated March 9, 1995 as included
in the Omnicom Group Inc. Form 10-K for the year ended December 31, 1995
(relating to the consolidated financial statements of Ross Roy Communications,
Inc. as of December 31, 1994 and for the two years in the period ended December
31, 1994 not presented separately herein), and to the reference to us under the
heading "Experts" appearing in this Registration Statement.
DELOITTE & TOUCHE LLP
Detroit, Michigan
February 26, 1997
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
of our report dated April 7, 1995, which includes an explanatory paragraph on
the ability of the company to continue as a going concern, of our audits of the
consolidated financial statements of Chiat/Day Holdings, Inc. for the two years
ended October 31, 1994, as included in the Omnicom Group Inc. Form 10-K for the
year ended December 31, 1995. We also consent to the reference to our Firm under
the caption "Experts" included in this Registration Statement.
COOPERS & LYBRAND LLP
Sherman Oaks, California
February 26, 1997
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our report dated February 20,
1996 (except for Note 14 as to which the date is March 1, 1996) included in the
Omnicom Group Inc. Form 10-K for the year ended December 31, 1995 and to all
references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
New York, New York
February 26, 1997
Exhibit 25.1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
---------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
---------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
---------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------
Omnicom Group Inc.
(Exact name of obligor as specified in its charter)
New York 13-1514814
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
437 Madison Avenue
New York, N.Y. 10022 10022
(Address of principal executive offices) (Zip Code)
---------------------
Debt Securities
(Title of the indenture securities)
- --------------------------------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New
York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 10th day of January, 1997.
THE CHASE MANHATTAN BANK
By /s/Glenn G. McKeever
-----------------------------
Glenn G. McKeever
Senior Trust Officer
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1996, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ........................................ $ 11,095
Interest-bearing balances ................................ 4,998
Securities:
Held to maturity securities ................................ 3,231
Available for sale securities .............................. 38,078
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ....................................... 8,018
Securities purchased under agreements to resell .......... 731
Loans and lease financing receivables:
Loans and leases, net of unearned income ................. $130,513
Less: Allowance for loan and lease losses ................ 2,938
Less: Allocated transfer risk reserve .................... 27
--------
Loans and leases, net of unearned income,
allowance, and reserve ................................. 127,548
Trading Assets ............................................. 48,576
Premises and fixed assets (including capitalized
leases) .................................................... 2,850
Other real estate owned .................................... 300
Investments in unconsolidated subsidiaries and
associated companies ..................................... 92
Customer's liability to this bank on acceptances
outstanding .............................................. 2,777
Intangible assets .......................................... 1,361
Other assets ............................................... 12,204
--------
TOTAL ASSETS ............................................... $261,859
========
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<PAGE>
LIABILITIES
Deposits
In domestic offices .................................. $ 80,163
Noninterest-bearing .................................. $ 30,596
Interest-bearing ..................................... 49,567
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ......................................... 65,173
Noninterest-bearing .................................. $ 3,616
Interest-bearing ..................................... 61,557
Federal funds purchased and securities
sold under agreements to repurchase in
domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased .............................. 14,594
Securities sold under agreements to repurchase ....... 14,110
Demand notes issued to the U.S. Treasury ............... 2,200
Trading liabilities .................................... 30,136
Other Borrowed money:
With a remaining maturity of one year or less ........ 16,895
With a remaining maturity of more than one year ........ 449
Mortgage indebtedness and obligations under
capitalized leases ................................... 49
Bank's liability on acceptances executed and outstanding 2,764
Subordinated notes and debentures ...................... 5,471
Other liabilities ...................................... 13,997
TOTAL LIABILITIES ...................................... 246,001
Limited-Life Preferred stock and related surplus ....... 550
EQUITY CAPITAL
Common stock ........................................... 1,209
Surplus ................................................ 10,176
Undivided profits and capital reserves ................. 4,385
Net unrealized holding gains (Losses)
on available-for-sale securities ....................... (481)
Cumulative foreign currency translation adjustments .... 19
TOTAL EQUITY CAPITAL ................................... 15,308
---------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ............................. $ 261,859
=========
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER ) DIRECTORS
THOMAS G. LABRECQUE )
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