<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED:
SEPTEMBER 30, 1995
-OR-
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 1-5050
ALBERTO-CULVER COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2525 Armitage Avenue
Melrose Park, Illinois 60160
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (708)450-3000
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of each exchange
Title of each class on which registered
<S> <C>
Class A Common Stock, par value $.22 per share New York Stock Exchange
Class B Common Stock, par value $.22 per share New York Stock Exchange
</TABLE>
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES X NO____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of common stock held by non-affiliates (assuming for
this purpose only that all directors and executive officers are affiliates) on
November 27, 1995 was $259.3 million for Class A Common Stock and $235.5
million for Class B Common Stock.
At November 27, 1995, there were 10,988,506 shares of Class A Common Stock
outstanding and 16,766,240 shares of Class B Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II - Portions of annual report to stockholders for the year
ended September 30, 1995
Part III - Portions of proxy statement and notice of annual meeting
of stockholders on January 25, 1996.
<PAGE> 2
PART I
ITEM 1. BUSINESS
BUSINESS SEGMENTS AND GEOGRAPHIC AREA INFORMATION
Alberto-Culver Company and its consolidated subsidiaries (herein referred to
collectively as the "company", unless indicated otherwise) have two principal
business segments. One segment, "Consumer Products" principally includes
developing, manufacturing, distributing and marketing branded consumer products
worldwide and includes the company's Alberto-Culver USA and Alberto-Culver
International business units. This segment also includes products intended for
end use by institutions and industries. The second segment, "Specialty
Distribution - Sally", consists of Sally Beauty Company, a specialty
distributor of professional beauty supplies with 1,494 stores as of September
30, 1995 in the United States, Puerto Rico, the United Kingdom and Japan.
In April 1995, Cederroth International AB, the company's Sweden-based
subsidiary, acquired the Toiletries Division of Molnlycke AB. As a result of
the acquisition, Cederroth has become one of the largest health and beauty care
companies in Scandinavia.
Financial information about business segments and geographic area information
is incorporated herein by reference to the Business Segments and Geographic
Area Information note of "Notes to Consolidated Financial Statements" in the
registrant's annual report to stockholders for the year ended September 30,
1995.
PRODUCTS
The classes of products in the "Consumer Products" business segment include
health and beauty care products and food and household products. Health and
beauty care products accounted for approximately 39%, 39% and 43% of the
company's consolidated net sales for the years ended September 30, 1995, 1994
and 1993, respectively. Food and household products accounted for approximately
10%, 9% and 9% of the company's consolidated net sales for the years ended
September 30, 1995, 1994 and 1993, respectively.
The company's major health and beauty care products in the United States
include the ALBERTO VO5 line of hair care products, TRESemme hair care
products, CONSORT hair sprays, FDS feminine deodorant sprays and the TCB line
of hair care products for the ethnic market.
Food and household products sold in the United States include MRS. DASH
salt-free seasonings, MOLLY McBUTTER dairy sprinkles, SUGARTWIN sugar
substitute, STATIC GUARD anti-static spray, DIAFOODS THICK-IT specialty food
thickener and various institutional food products sold under the MILANI and
SMITHERS trademarks.
The company's consumer products are sold in more than 100 countries. Through
its Cederroth subsidiary, the company manufactures and markets health and
beauty care products throughout Scandanavia and in Spain and Italy. Major
products include SALVEKVICK adhesive bandages, ALBERTO VO5 hair care products,
SAMARIN antacids, SELTIN salt substitute, LACTACYD liquid soap and TOPZ cotton
buds. New products resulting from the Molnlycke acquisition include BLIW liquid
soaps, DATE anti-perspirants and cologne for women, FAMILY FRESH shampoo and
shower products, SUKETTER artificial sweetener, HEMANENT home permanents, HTH
and L300 skin care products and GRUMME TVATTSAPA detergents.
In the United Kingdom, the company markets, among other products, the ALBERTO
VO5 line of hair care products, ALBERTO BALSAM shampoo and conditioner and the
TRESemme line of hair care products. INDOLA professional color bleaches,
shampoos, conditioners and styling products are sold throughout Europe and
other international markets. Other major international markets include Canada,
Mexico, Puerto Rico, Australia, Italy and New Zealand.
- 2 -
<PAGE> 3
The "Specialty Distribution - Sally" business segment represents the operations
of Sally Beauty Company, Inc. which operates a network of cash-and-carry
professional beauty supply stores. Sally stores provide salon owners,
hairdressers and consumers with an extensive selection of hair care and skin
care products, cosmetics, styling appliances and other beauty items. Sales of
the "Specialty Distribution - Sally" business segment accounted for
approximately 51%, 52% and 48% of the company's consolidated net sales for the
years ended September 30, 1995, 1994 and 1993, respectively.
Many of the company's consumer products are developed in the company's
laboratories. New products introduced by the company are assigned product
managers who guide the products from development to the consumer. The product
managers are responsible for the overall marketing plans for the products and
coordinate advertising, promotion and market research activities.
MARKETING
The company allocates a large portion of its revenues to advertising, promotion
and market research. Net earnings for all periods are materially affected by
advertising, promotion and market research expenditures. These expenditures are
charged to income in the period in which they are incurred. Advertising,
promotion and market research expenditures for the fiscal years ended September
30, 1995, 1994 and 1993 were as follows (in millions):
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Advertising, promotion and market research $188.0 178.5 172.8
</TABLE>
Advertising, promotion, and market research expenditures relating to a new
product will ordinarily constitute a higher percentage of sales than in the
case of a well-established product. There can be no assurance that such
expenditures will result in consumer acceptance and profitability for a
product.
The company regards television as the best medium for its advertising and uses
it to conduct extensive network, spot and cable television advertising
campaigns. The company also advertises through other media such as newspapers,
magazines and radio.
Extensive advertising and promotion are required to build and protect a
product's market position. The company believes there is significant consumer
awareness of its major brands and that such awareness is an important factor in
the company's operating results.
COMPETITION
The markets for the company's branded consumer products are highly competitive
and sensitive to changes in consumer preferences and demands. The company's
competitors range in size from large, highly diversified companies (some of
which have substantially greater financial resources than the company) to
small, specialized producers. The company competes on the basis of product
quality and price and believes that brand loyalty and consumer acceptance are
important factors. The company's markets are characterized by frequent
introductions of competitive products and by the entry of other manufacturers
as new competitors, both typically accompanied by extensive advertising and
promotional campaigns. Such campaigns are often very costly and can
significantly affect sales and earnings of the sponsor and its competitors.
Sally Beauty Company experiences competition from local and regional suppliers,
full service dealers calling directly on salons and retail outlets carrying a
narrow range of professional products.
- 3 -
<PAGE> 4
DISTRIBUTION IN THE UNITED STATES
Retail health and beauty care products and food and household products are sold
in the United States primarily through the company's sales force of
approximately 80 employees and 70 food brokers calling upon wholesale drug
establishments and retail outlets such as supermarkets, drug stores, mass
merchandisers and variety stores.
Hair care products for the professional trade in the United States are sold by
company sales representatives and brokers to beauty supply outlets and to
beauty distributors who in turn sell to beauty salons, barber shops and beauty
schools.
Specialty food products are sold to institutional users by approximately 105
commissioned sales representatives and 80 food brokers, assisted by 12 regional
managers.
Sally Beauty Company had 1,494 stores located in 46 states, Puerto Rico, the
United Kingdom and Japan at September 30, 1995. Sally's stores are
self-service, cash-and-carry and are primarily located in shopping centers.
Sally operates the world's largest chain of professional beauty supply stores
and as such is a major customer of some of the company's competitors in the
personal care products industry. Sally sells the company's professional hair
care products, but these products represent only a small portion of Sally's
selection of salon brands.
FOREIGN OPERATIONS
Products of the company are sold in more than 100 countries or geographic
regions, primarily through direct sales by subsidiaries, independent
distributors and licensees.
The company's foreign operations are subject to risks inherent in transactions
involving foreign currencies and fluctuating exchange rates.
EMPLOYEES
In its domestic and foreign operations, the company had approximately 9,900
full-time equivalent employees as of September 30, 1995, consisting of 5,700
hourly personnel and 4,200 salaried employees. At September 30, 1994, the
company had approximately 9,300 full-time equivalent employees. The increase
in fiscal year 1995 employees over fiscal year 1994 employees is principally
due to the growth in the number of Sally Beauty Company stores and the
acquisition of Molnlycke Toiletries.
Certain subsidiaries of the company have union contracts covering production,
warehouse, shipping and maintenance personnel. The company considers relations
with its employees to be satisfactory.
REGULATION
The company is subject to the regulations of several federal and state
agencies, including the Federal Food and Drug Administration and the Federal
Trade Commission.
TRADEMARKS AND PATENTS
The company's trademarks, certain of which are material to its business, are
registered or legally protected in the United States, Canada and other
countries throughout the world in which products of the company are sold.
Although the company owns patents and has other patent applications pending,
its business is not materially dependent upon patents or patent protection.
- 4 -
<PAGE> 5
ITEM 2. PROPERTIES
The company's properties, plants and equipment are maintained in good condition
and are suitable and adequate to support the business. The company's principal
properties and their general characteristics are described in the following
table:
<TABLE>
<CAPTION>
Type of Business
Location Facility Segment
- -------- -------- -------
<S> <C> <C>
COMPANY-OWNED PROPERTIES:
- -------------------------
Melrose Park, Illinois
(2525 Armitage Avenue) Executive Offices, Manufacturing, Warehouse (1)
(2150 N. 15th Avenue) Manufacturing, Warehouse (1)
(2100 N. 15th Avenue) Warehouse (1)
(1930 George Street) Office, Warehouse (1)
Atlanta, Georgia Warehouse (1)
Columbus, Ohio Warehouse (2)
Denton, Texas Office, Warehouse (2)
Falun, Sweden Office, Manufacturing, Warehouse (1)
Madrid, Spain Office, Manufacturing, Warehouse (1)
Naguabo, Puerto Rico Manufacturing, Warehouse (1)
Naucalpan de Juarez, Mexico Office, Manufacturing, Warehouse (1)
North Rocks, New South Wales,
Australia Office, Manufacturing, Warehouse (1)
Reno, Nevada Warehouse (2)
Swansea, Wales, England Office, Manufacturing, Warehouse (1)
Tilburg, Holland Office, Manufacturing, Warehouse (1)
Toronto, Ontario, Canada Office, Manufacturing, Warehouse (1)
LEASED PROPERTIES:
- ------------------
Albertslund, Denmark Office, Warehouse (1)
Auckland, New Zealand Office (1)
Basingstoke, Hampshire, England Office (1)
Espoo, Finland Office, Warehouse (1)
Morrow, Georgia Warehouse (2)
Rakkestad, Norway Office, Warehouse (1)
Sparks, Nevada Office, Warehouse (1)
Stockholm, Sweden Office, Manufacturing, Warehouse (1)
Various (1,494 locations in 46 states,
Puerto Rico, the United Kingdom and Japan) Sally Beauty Company Stores (2)
</TABLE>
(1) Consumer Products
(2) Specialty Distribution - Sally
- 5 -
<PAGE> 6
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings pending.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the year
ended September 30, 1995.
EXECUTIVE OFFICERS
The following table sets forth the names and current positions of the
registrant's executive officers, including their five-year business history and
ages. Executive officers of the company and its subsidiaries are elected
annually.
<TABLE>
<CAPTION>
Current Position and
Name Five-Year Business History Age
- ---- -------------------------- ---
<S> <C> <C>
Leonard H. Lavin (1) October, 1994 - Chairman; previously Chairman and 76
Chief Executive Officer for more than five years
Howard B. Bernick (1) October, 1994 - President and Chief Executive Officer; 43
previously President and Chief Operating Officer for
more than five years
Bernice E. Lavin (1) July, 1994 - Vice Chairman, Secretary and Treasurer; 70
previously Vice President, Secretary and Treasurer for
more than five years
Carol L. Bernick (1) October, 1994 - Executive Vice President and Assistant 43
Secretary, Alberto-Culver Company and President,
Alberto-Culver USA, Inc., a subsidiary of registrant;
September, 1992 to October, 1994 - Executive Vice President
and Assistant Secretary; October, 1990 to September, 1992 -
Executive Vice President, Worldwide Marketing and
Assistant Secretary
John T. Boone June, 1994 - Group Vice President, Domestic Consumer 60
Products, Alberto-Culver USA, Inc., a subsidiary of
registrant; August, 1993 to June, 1994 - Vice President,
Operations, Modami Services, Inc.; August, 1991 to
August, 1993 - President, JTB Management, Inc.;
February, 1986 to August, 1991 - Chairman and Chief
Executive Officer, Inovet, Inc.
William J. Cernugel October, 1993 - Senior Vice President, Finance & 53
Controller; April, 1982 to October, 1993 - Vice President,
Finance & Controller
</TABLE>
- 6 -
<PAGE> 7
<TABLE>
Current Position and
Name Five-Year Business History Age
- ---- -------------------------- ---
<S> <C> <C>
David D. DeTomaso October, 1993 - Senior Vice President, Professional 52
Domestic Division, Alberto-Culver USA, Inc., a
subsidiary of registrant; May, 1983 to October, 1993 -
Vice President, Professional Domestic Division
Raymond W. Gass Vice President and General Counsel 58
John G. Horsman, Jr. January, 1994 - President, Alberto-Culver International, 57
Inc., a subsidiary of registrant; January, 1992 to January,
1994 - Retired; 1978 to January, 1992 - Group Vice
President, American Home Products Corporation
Thomas J. Pallone Vice President, Research and Development 50
Michael H. Renzulli President, Sally Beauty Company, Inc., a subsidiary of 55
registrant
</TABLE>
(1) Leonard H. Lavin and Bernice E. Lavin are husband and wife. Carol L.
Bernick is the wife of Howard B. Bernick and the daughter of Mr. and
Mrs. Lavin.
- 7 -
<PAGE> 8
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Information required for this Item is incorporated herein by reference to the
section entitled "Market Price of Common Stock and Cash Dividends Per Share"
and note 5 of "Notes to Consolidated Financial Statements" in the registrant's
annual report to stockholders for the year ended September 30, 1995.
ITEM 6. SELECTED FINANCIAL DATA
Information required for this Item is incorporated herein by reference to the
section entitled "Selected Financial Data" in the registrant's annual report to
stockholders for the year ended September 30, 1995.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information required for this Item is incorporated herein by reference to the
section entitled "Management's Discussion and Analysis of Results of Operations
and Financial Condition" in the registrant's annual report to stockholders for
the year ended September 30, 1995.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required for this Item is incorporated herein by reference to the
consolidated financial statements and notes and "Independent Auditors' Report"
of KPMG Peat Marwick LLP in the registrant's annual report to stockholders for
the year ended September 30, 1995.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
- 8 -
<PAGE> 9
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information required for this Item regarding the directors of the company and
regarding delinquent filers pursuant to Item 405 of Regulation S-K is
incorporated herein by reference to the sections entitled "Election of
Directors" and "Compliance under Section 16(a) of the Securities Exchange Act
of 1934", respectively, in the registrant's proxy statement for its annual
meeting of stockholders on January 25, 1996. Information concerning Executive
Officers of the registrant is included in Part I of this report.
ITEM 11. EXECUTIVE COMPENSATION
Information required for this Item is incorporated herein by reference to the
section entitled "Executive Compensation" in the registrant's proxy statement
for its annual meeting of stockholders on January 25, 1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required for this Item is incorporated herein by reference to the
sections entitled "Share Ownership of Directors and Executive Officers" and
"Principal Stockholders" in the registrant's proxy statement for its annual
meeting of stockholders on January 25, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
- 9 -
<PAGE> 10
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of this report:
1. Financial statements:
The consolidated financial statements and notes to be
included in Part II, Item 8 are incorporated by reference to
the registrant's annual report to stockholders for the year
ended September 30, 1995, which is filed as an exhibit to this
report.
2. Financial statement schedules:
<TABLE>
<CAPTION>
Description Schedule
----------- --------
<S> <C>
Valuation and Qualifying Accounts II
</TABLE>
Schedules I, III, IV, and V are omitted as the
information required by these schedules is not applicable.
3. Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number Description
-------- -----------
<S> <C>
3(i)(a) Copy of Restated Certificate of Incorporation of Alberto-Culver Company (filed
as Exhibit 3(a) and incorporated herein by reference from the company's Form
10-K Annual Report for the year ended September 30, 1988).
3(i)(b) Copy of the amendment to the Restated Certificate of Incorporation of
Alberto-Culver Company (filed as Exhibit 3(a)(1) and incorporated herein by
reference from the company's Form 10-Q Quarterly Report for the quarter ended
December 31, 1989).
3(ii) Copy of the By-Laws of Alberto-Culver Company, as amended and in effect as
of January 17, 1990 (filed as Exhibit 3(b)(1) and incorporated herein by reference
from the company's Form 10-Q Quarterly Report for the quarter ended December 31, 1989).
4 Certain instruments defining the rights of holders of long-term obligations of
the registrant and certain of its subsidiaries (the total amount of securities
authorized under each of which does not exceed ten percent of the registrant's
consolidated assets) are omitted pursuant to part 4 (iii) (A) of Item 601 (b) of
Regulation S-K. The registrant agrees to furnish copies of any such instruments to
the Securities and Exchange Commission upon request.
</TABLE>
- 10 -
<PAGE> 11
3. Exhibits (continued)
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
4 (a) Copy of the Note Agreement dated November 30, 1988 among Alberto-Culver
Company and Institutional Purchasers (filed as Exhibit 4(2) and
incorporated herein by reference from the company's Form 10-Q Quarterly Report
for the quarter ended March 31, 1989).
4 (b) Copy of Note Agreement dated September 28, 1993 among Alberto-Culver Company
and Institutional Investors (filed as Exhibit 4(f) and incorporated herein by
reference from the company's Form 10-K Annual Report for the year ended
September 30, 1993).
4 (c) Copy of Indenture dated June 30, 1995 by and between Alberto-Culver Company
as Issuer and Bankers Trustee Company Limited as Trustee of 5-1/2% Convertible
Subordinated Debentures due June 30, 2005.
10 (a) Copy of Alberto-Culver Company Management Incentive Plan dated October 27, 1994
*(filed as Exhibit 10(a) and incorporated herein by reference from the company's
Form 10-Q Quarterly Report for the quarter ended March 31, 1995).
10 (b) Copy of Alberto-Culver Company Employee Stock Option Plan of 1988, as amended. *
10 (c) Copy of Alberto-Culver Company 1994 Shareholder Value Incentive Plan *
(filed as Exhibit 10 (c) and incorporated herein by reference from the company's
Form 10-Q Quarterly Report for the quarter ended March 31, 1995).
10 (d) Copy of Alberto-Culver Company 1994 Restricted Stock Plan *(filed as Exhibit 10(d)
and incorporated herein by reference from the company's Form 10-Q Quarterly Report
for the quarter ended March 31, 1995.)
10 (e) Copy of Alberto-Culver Company 1994 Stock Option Plan for Non-Employee Directors
*(filed as Exhibit 10(e) and incorporated herein by reference from the company's Form
10-Q Quarterly Report for the quarter ended March 31, 1995).
10 (f) Copy of Split Dollar Life Insurance Agreement dated September 30, 1993 between
Alberto-Culver company and the trustee of the Lavin Survivorship Insurance Trust
* (filed as Exhibit 10(e) and incorporated herein by reference from the company's
Form 10-K Annual Report for the year ended September 30, 1993).
</TABLE>
- 11 -
<PAGE> 12
3. Exhibits (continued)
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
11 Computation of net earnings per share.
13 Portions of annual report to stockholders for the year ended
September 30, 1995 incorporated herein by reference.
21 Subsidiaries of the Registrant.
23 Consent of KPMG Peat Marwick LLP
27 Financial Data Schedule
* This exhibit is a management contract or compensatory plan or arrangement of
the registrant.
</TABLE>
(b) Reports on Form 8-K: None
- 12 -
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on the 13th day of
December, 1995.
ALBERTO-CULVER COMPANY
By /s/ Howard B. Bernick
Howard B. Bernick
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Leonard H. Lavin Chairman of the Board December 13, 1995
- -----------------------
Leonard H. Lavin and Director
/s/ Howard B. Bernick President, Chief Executive December 13, 1995
- ------------------------
Howard B. Bernick Officer and Director
/s/ Bernice E. Lavin Vice Chairman, Secretary, December 13, 1995
- -----------------------
Bernice E. Lavin Treasurer and Director
/s/ Carol L. Bernick Executive Vice President, December 13, 1995
- -------------------------
Carol L. Bernick Assistant Secretary and Director
/s/ William J. Cernugel Senior Vice President, December 13, 1995
- -------------------------
William J. Cernugel Finance & Controller (Principal
Financial & Accounting Officer)
/s/ Robert Abboud Director December 13, 1995
- --------------------
A. Robert Abboud
Director* December 13, 1995
- -------------------------------
A. G. Atwater
Director December 13, 1995
- -------------------------------
Robert P. Gwinn
/s/ Leander W. Jennings Director December 13, 1995
- -------------------------
Leander W. Jennings
Director* December 13, 1995
- ---------------------------------------
Allan B. Muchin
Director* December 13, 1995
- ----------------------------------------
Robert H. Rock
</TABLE>
- 13 -
<PAGE> 14
<TABLE>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Dr. Harold M. Visotsky Director December 13, 1995
- ----------------------------
Dr. Harold M. Visotsky
Director December 13, 1995
- ---------------------------------------------
William W. Wirtz
</TABLE>
* Appointed to Board of Directors in October, 1995.
- 14 -
<PAGE> 15
Independent Auditors' Report
The Board of Directors and Stockholders
Alberto-Culver Company:
Under date of October 30, 1995, we reported on the consolidated balance sheets
of Alberto-Culver Company and subsidiaries as of September 30, 1995 and 1994
and the related consolidated statements of earnings, retained earnings, and
cash flows for each of the years in the three-year period ended September 30,
1995, as contained in the 1995 annual report to stockholders. These
consolidated financial statements and our report thereon are incorporated by
reference in the annual report on Form 10-K for the year 1995. In connection
with our audits of the aforementioned consolidated financial statements, we
also have audited the related financial statement schedule as listed in Item
14(a)2 of the annual report on Form 10-K. This financial statement schedule is
the responsibility of the company's management. Our responsibility is to
express an opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Chicago, Illinois
October 30, 1995
<PAGE> 16
Schedule VIII
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Valuation and Qualifying Accounts
(Thousands)
<TABLE>
<CAPTION>
Year Ended September 30,
-------------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Allowance for doubtful accounts:
Balance at beginning of period $5,497 5,493 4,839
Additions (deductions):
Charged to costs and expenses 3,277 3,412 3,296
Uncollectible accounts
written off, net of
recoveries (3,187) (3,588) (2,160)
Allowance for doubtful accounts
of acquired company -- 83 --
Other 76 97 (482)
------ ------ ------
Balance at end of period $5,663 5,497 5,493
====== ====== ======
</TABLE>
<PAGE> 1
EXHIBIT 4(c)
============================================================
ALBERTO-CULVER COMPANY
ISSUER
TO
BANKERS TRUST COMPANY
TRUSTEE
________________
INDENTURE
DATED AS OF JUNE 30, 1995
________________
U.S.$100,000,000
5 1/2% CONVERTIBLE SUBORDINATED DEBENTURES
DUE JUNE 30, 2005
============================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agent Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Applicable Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Authorized Newspaper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bearer Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
CEDEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Class A Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Class B Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Closing Price Per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Company Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Constituent Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Conversion Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Conversion Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Definitive Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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Determination Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
U.S.$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
EUROCLEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Exchange Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Global Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Non-electing Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Permitted Holder of Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Place of Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Principal Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Quoted Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Repurchase Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Repurchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Restricted Global Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Risk Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Rule 144A Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
"Security Register" and "Security Registrar" . . . . . . . . . . . . . . . . . . . . . . . . 10
Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Senior Nonmonetary Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Senior Payment Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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Tax Affected Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Tax Law Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Temporary Global Bearer Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Time of Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Trading Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
United States person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Unrestricted Global Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Western Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 102. Compliance Certificates and
Opinions; Form of Documents
Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 103. Acts of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 104. Notices, Etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . 18
SECTION 105. Notice to Holders of Securities; Waiver . . . . . . . . . . . . . . . . . . . . 18
SECTION 106. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . 20
SECTION 107. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 108. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 109. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 110. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 111. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 202. Forms of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 203. Form of Coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 204. Form of Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . 61
SECTION 205. Form of Conversion Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 206. Legend on Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 303. Execution, Authentication, Delivery
and Dating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 304. Global Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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SECTION 305. Registration, Registration of Transfer
and Exchange; Restrictions on
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 306. Mutilated, Destroyed, Lost or Stolen
Securities and Coupons . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 307. Payment of Interest, Interest Rights
Preserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 311. Forms of Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 312. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . 91
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . 92
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 502. Acceleration of Maturity; Rescission
and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities or Coupons . . . . . . . . . . . . . . . . . . . . 99
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 508. Unconditional Right of Holders to
Receive Principal and Interest
and to Convert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 512. Control by Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 515. Waiver of Usury, Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . 104
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ARTICLE SIX
THE TRUSTEE
<S> <C>
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 604. Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 605. May Hold Securities, Act as Trustee
Under Other Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 607. Compensation and Indemnification of
Trustee and Its Prior Claims . . . . . . . . . . . . . . . . . . . . . . . 109
SECTION 608. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . 110
SECTION 609. Resignation and Removal; Appointment
of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 610. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . 112
SECTION 611. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . . . . . . . . . . . . . 112
SECTION 612. Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 701. Company May Consolidate, Etc., Only
on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
SECTION 702. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 801. Supplemental Indentures Without
Consent of Holders of Securities
or Coupons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
SECTION 802. Supplemental Indentures with Consent
of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . 118
SECTION 803. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . 119
SECTION 804. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . 120
SECTION 805. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
SECTION 806. Notice of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . 120
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ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
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SECTION 901. Purposes for Which Meetings
May Be Called . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
SECTION 902. Call, Notice and Place of Meetings . . . . . . . . . . . . . . . . . . . . . . 121
SECTION 903. Persons Entitled to Vote at Meetings . . . . . . . . . . . . . . . . . . . . . 121
SECTION 904. Quorum; Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 905. Determination of Voting Rights; Conduct
and Adjournment of Meetings . . . . . . . . . . . . . . . . . . . . . . . . 123
SECTION 906. Counting Votes and Recording Action
of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . 125
SECTION 1002. Maintenance of Offices or Agencies . . . . . . . . . . . . . . . . . . . . . . 125
SECTION 1003. Money for Security Payments To Be
Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
SECTION 1004. Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
SECTION 1005. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
SECTION 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 129
SECTION 1007. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . 130
SECTION 1008. Registration and Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
SECTION 1009. Statement by Officers as to Default. . . . . . . . . . . . . . . . . . . . . . 131
SECTION 1010. Delivery of Certain Information. . . . . . . . . . . . . . . . . . . . . . . . 131
SECTION 1011. Resale of Certain Securities;
Reporting Issuer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
SECTION 1102. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
SECTION 1103. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . 133
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . 134
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . 135
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
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<TABLE>
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ARTICLE TWELVE
CONVERSION OF SECURITIES
<S> <C>
SECTION 1201. Conversion Privilege and
Conversion Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
SECTION 1202. Exercise of Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . 137
SECTION 1203. Fractions of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
SECTION 1204. Adjustment of Conversion Rate . . . . . . . . . . . . . . . . . . . . . . . . 140
SECTION 1205. Notice of Adjustments of
Conversion Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
SECTION 1206. Notice of Certain Corporate Action . . . . . . . . . . . . . . . . . . . . . . 146
SECTION 1207. Company to Reserve Class A
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
SECTION 1208. Taxes on Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
SECTION 1209. Agreements as to Class A
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
SECTION 1210. Cancellation of Converted Securities . . . . . . . . . . . . . . . . . . . . . 149
SECTION 1211. Provision in Case of Consolidation,
Merger or Conveyance of Assets . . . . . . . . . . . . . . . . . . . . . . 149
SECTION 1212. Responsibility of Trustee for
Conversion Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
ARTICLE THIRTEEN
SUBORDINATION
SECTION 1301. Securities Subordinated to
Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
SECTION 1302. Payment Over of Proceeds Upon
Dissolution, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
SECTION 1303. No Payment When Senior Debt
in Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
SECTION 1304. Payment Permitted If No Default . . . . . . . . . . . . . . . . . . . . . . . 154
SECTION 1305. Subrogation to Rights of Holders
of Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
SECTION 1306. Provisions Solely to Define
Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
SECTION 1307. Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . 156
SECTION 1308. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . 156
SECTION 1309. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
SECTION 1310. Reliance on Judicial Order or
Certificate of Liquidating Agent . . . . . . . . . . . . . . . . . . . . . 157
SECTION 1311. Trustee Not Fiduciary for Holders
of Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
SECTION 1312. Rights of Trustee as Holder of
Senior Debt; Preservation of
Trustee's Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
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<TABLE>
<CAPTION>
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<S> <C>
SECTION 1313. Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . 158
SECTION 1314. Certain Conversions Deemed Payment . . . . . . . . . . . . . . . . . . . . . . 159
ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A RISK EVENT
SECTION 1401. Right to Require Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . 160
SECTION 1402. Notices; Method of Exercising
Repurchase Right, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
SECTION 1403. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
ARTICLE FIFTEEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1501. Company to Furnish Trustee Names and
Addresses of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
SECTION 1502. Preservation of Information. . . . . . . . . . . . . . . . . . . . . . . . . . 166
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
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<PAGE> 10
INDENTURE, dated as of June 30, 1995, between ALBERTO-CULVER COMPANY, a
corporation duly organized and existing under the laws of the State of Delaware,
having its principal office at 2525 Armitage Avenue, Melrose Park, Illinois
60160 (herein called the "Company"), and Bankers Trust Company, a New York
banking corporation, as Trustee hereunder (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 5 1/2%
Convertible Subordinated Debentures due June 30, 2005 (herein called the
"Securities") and the coupons, if any, thereto appertaining, of substantially
the tenor and amount hereinafter set forth, and to provide therefor the Company
has duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities and the coupons thereto
appertaining, when the Securities are executed by the Company and authenticated
and delivered hereunder and duly issued by the Company, the valid obligations of
the Company, and to make this Indenture a valid agreement of the Company, in
accordance with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities and the coupons
thereto appertaining, as follows:
<PAGE> 11
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles
in the United States prevailing at the time of any relevant computation
hereunder; and
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Security, has the
meaning specified in Section 103.
"Additional Amounts" has the meaning specified in Section 202.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" has the meaning specified in Section 305(c).
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<PAGE> 12
"Authenticating Agent" means any Person authorized pursuant to Section
612 to act on behalf of the Trustee to authenticate Securities.
"Authorized Newspaper" means a newspaper, in an official language of the
country of publication or in the English language, customarily published on each
Monday, Tuesday, Wednesday, Thursday and Friday, whether or not published on
Saturdays, Sundays or holidays, and of general circulation in the place in
connection with which the term is used or in the financial community of such
place. Where successive publications are required to be made in Authorized
Newspapers, the successive publications may be made in the same or in different
newspapers in the same city meeting the foregoing requirements and in each case
on any Monday, Tuesday, Wednesday, Thursday and Friday. For purposes of
publication in London and Luxembourg, such term shall mean the Financial Times
and the Luxembourger Wort, respectively, unless such newspapers are not
available.
"Bearer Security" means any Security issued in the form set forth in
Section 202(a).
"Board of Directors" means either the board of directors of the Company
or any committee of that board empowered to act for it with respect to this
Indenture.
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, shall have been
delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, Place of
Conversion or any other place, as the case may be, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in such Place of Payment, Place of Conversion or other place, as the case may
be, are authorized or obligated by law or executive order to close; provided,
however, that a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close shall not be a
Business Day for purposes of Section 1309; provided, further, that a day on
which banking institutions in New York, New York or London, England are
authorized or obligated by law or executive order to close shall not be a
Business Day for purposes of Sections 1001, 1003 or 1106.
"CEDEL" has the meaning specified in Section 304.
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<PAGE> 13
"Class A Common Stock" means the Class A Common Stock, par value $.22
per share, of the Company authorized at the date of this instrument as
originally executed. Subject to the provisions of Section 1211, shares issuable
on conversion of Securities shall include only shares of Class A Common Stock or
shares of any class or classes of common stock resulting from any
reclassification or reclassifications thereof; provided, however, that if at any
time there shall be more than one such resulting class, the shares so issuable
on conversion shall include shares of all such classes, and the shares of each
such class then so issuable shall be substantially in the proportion 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.
"Class B Common Stock" means the Class B Common Stock, par value $.22
per share, of the Company authorized at the date of this instrument as
originally executed.
"Closing Date" means the date of the Time of Delivery pursuant to the
Underwriting Agreement.
"Closing Price Per Share" means, with respect to the Class A Common
Stock of the Company, for any day, the reported last sales price regular way
per share or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either
case (i) on the New York Stock Exchange as reported in The Wall Street Journal
(or other similar newspaper) for New York Stock Exchange Composite Transactions
or, if the Class A Common Stock is not listed or admitted to trading on such
Exchange, on the principal (as determined by the Company's Board of Directors)
national securities exchange on which the Class A Common Stock is listed or
admitted to trading or (ii) if not listed or admitted to trading on any
national securities exchange, on the Nasdaq National Market system, or, if the
Class A Common Stock is not listed or admitted to trading on any national
securities exchange or quoted on such National Market system, the average of
the closing bid and asked prices in the over-the-counter market as furnished by
any New York Stock Exchange member firm selected from time to time by the
Company for that purpose. If no such prices are available, the Closing Price
Per Share shall be the fair value of a share as determined by the Board of
Directors of the Company.
"Code" has the meaning specified in Section 201.
"Commission" means the United States Securities and Exchange Commission.
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<PAGE> 14
"Common Depositary" has the meaning specified in Section 304.
"common stock" includes any stock of any class of capital stock 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
issuer thereof and which is not subject to redemption by the issuer thereof.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its Chief Executive Officer, its President or a Vice
President, and by its principal financial officer, Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Constituent Person" has the meaning specified in Section 1211.
"Conversion Agent" means any Person authorized by the Company to
convert Securities in accordance with Article Twelve.
"Conversion Price" has the meaning specified in Section 1403.
"Conversion Rate" has the meaning specified in Section 1201.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered
(which at the date of this Indenture is located at 4 Albany Street, New York,
New York 10006.
"corporation" means a corporation, limited liability company,
association, joint-stock company or business trust.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Defaulted Interest" has the meaning specified in Section 307.
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<PAGE> 15
"Definitive Security" means any Security that is a Bearer Security or a
Registered Security (other than a Global Registered Security).
"Depositary" means, with respect to any Securities issued in whole or in
part in the form of one or more Global Registered Securities, the clearing
agency that is registered under the Exchange Act and designated to act as
Depositary for such Securities, as contemplated by Section 304(b), or any
successor clearing agency registered under the Exchange Act as contemplated by
Section 304(b).
"Determination Notice" has the meaning specified in Section 202.
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"EUROCLEAR" has the meaning specified in Section 304.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"Exchange Date" means the date 40 days after the Time of Delivery.
"Global Registered Security" means any Registered Security issued in the
form set forth in Section 202(b) and registered in the Security Register in the
name of a Depositary or a nominee thereof.
"Global Security" means any Security that is a Temporary Global Bearer
Security or a Global Registered Security.
"Holder", when used with respect to any Registered Security, means the
Person in whose name the Security is registered in the Security Register, when
used with respect to any Bearer Security or Temporary Global Bearer Security,
means the bearer thereof and, when used with respect to any coupon, means the
bearer thereof.
"Indebtedness" has the meaning specified in Section 501.
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<PAGE> 16
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set forth in
Article Fourteen or otherwise.
"Non-electing Share" has the meaning specified in Section 1211.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, its Chief Executive Officer, the
President or a Vice President and by the principal financial officer, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1009 shall be the principal
executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for, or an employee of, the Company and who shall be reasonably
acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities for the payment or redemption of which money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) or set aside and segregated in trust
by the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities and any coupons thereto appertaining, provided
that if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
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<PAGE> 17
(iii) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a meeting of Holders
of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such determination as to the presence of a quorum or upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company and, except
as otherwise specifically set forth herein, such term shall include the Company
if it shall act as its own Paying Agent. The Company has initially appointed
the Trustee, the Principal Paying Agent, Bankers Trust Luxembourg S.A. and Swiss
Bank Corporation as Paying Agents.
"Permitted Holder of Senior Debt" means any duly authorized
representative of a holder of Senior Debt.
"Person" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Conversion" has the meaning specified in Section 301.
"Place of Payment" has the meaning specified in Section 301.
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<PAGE> 18
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Paying Agent" means Bankers Trust Company, London branch,
located at 1 Appold Street, Broadgate, London, until a successor, if any, has
been appointed pursuant to the terms hereof, or if there shall be no Principal
Paying Agent, the Trustee.
"Quoted Price" has the meaning specified in Section 1403(c).
"Record Date" means any Regular Record Date or Special Record Date.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" means any Security issued in the form set forth in
Section 202(b) and registered in the Security Register. A Global Registered
Security is a Registered Security.
"Regular Record Date" for interest payable in respect of any Registered
Security on any Interest Payment Date means the June 15 or December 15 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date.
"Repurchase Date" has the meaning specified in Section 1401.
"Repurchase Price" has the meaning specified in Section 1401.
"Responsible Officer", when used with respect to the Trustee, means any
officer within the Corporate Trust and Agency Group (or any successor group) of
the Trustee including without limitation any vice president, assistant vice
president, assistant secretary or other officer of the Trustee
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<PAGE> 19
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge and familiarity with the particular subject.
"Restricted Global Registered Security" means a Global Registered
Security which is a Restricted Security.
"Restricted Securities" has the meaning specified in Section 206.
"Risk Event" has the meaning specified in Section 1403(d).
"Rule 144A Information" has the meaning specified in Section 1010.
"Securities" has the meaning ascribed to it in the first paragraph under
the caption "Recitals of the Company".
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Debt" means the principal of (and premium, if any) and interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) on, and all fees and
other amounts payable in connection with, the following, whether absolute or
contingent, secured or unsecured, due or to become due, outstanding on the date
of the Indenture or thereafter created, incurred or assumed: (a) indebtedness
of the Company to banks, insurance companies and other financial institutions
evidenced by credit agreements, notes or other written obligations, (b) all
other indebtedness of the Company which is (i) for money borrowed (including
obligations of the Company in respect of overdrafts, foreign exchange contracts
and currency exchange agreements, letters of credit, bankers' acceptances,
interest rate protection agreements, and any loans or advances from banks,
whether or not evidenced by notes or similar instruments) or (ii) evidenced by a
note or similar instrument given in connection with an acquisition of any
businesses, properties or assets of any kind (other than any account payable or
other accrued current liability or obligation incurred in the ordinary course of
business in connection with the obtaining of materials or services ("Trade
Accounts")), (c) obligations of
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<PAGE> 20
the Company as lessee under leases required to be capitalized on the balance
sheet of the lessee under generally accepted accounting principles, (d) all
obligations of the Company issued or assumed as the deferred purchase price of
property (except Trade Accounts), all conditional sale obligations of the
Company and all obligations of the Company under any title retention
agreements, (e) all indebtedness and obligations of other Persons of the types
described in clauses (a) through (d) for the payment of which the Company is
responsible or liable as obligor or guarantor, including, without limitation,
obligations (contingent or otherwise) to purchase or otherwise acquire, or to
assure a creditor against loss in respect of, any such indebtedness or
obligation, and any such indebtedness or obligation secured by a lien on any
asset of the Company, whether or not such indebtedness or obligation is assumed
by the Company and (f) amendments, renewals, extensions, modifications and
refundings of any such indebtedness or obligation described in clauses (a)
through (e), unless in any case in the instrument creating or evidencing any
such indebtedness or obligation or pursuant to which the same is outstanding it
is provided that such indebtedness or obligation is not superior in right of
payment to the Securities.
"Senior Nonmonetary Default" has the meaning specified in Section 1303.
"Senior Payment Default" has the meaning specified in Section 1303.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Company pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security or a
coupon representing such installment of interest as the fixed date on which the
principal of such Security or such installment of interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
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<PAGE> 21
"Tax Affected Security" means any Security held by a non-United States
person to whom Additional Amounts have or will become payable.
"Tax Law Change" means any change in, or amendment to, the laws
(including any regulations or rulings promulgated thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, or any change in, or amendment to, the application or
official interpretation of such laws, regulations or rulings.
"Temporary Global Bearer Security" means any Security issued in the form
set forth in Section 203.
"Time of Delivery" means July 13, 1995.
"Trading Days" means (i) if the Class A Common Stock is listed or
admitted for trading on any national securities exchange, days on which such
national securities exchange is open for business or (ii) if the Class A Common
Stock is quoted on the Nasdaq National Market system or any similar system of
automated dissemination of quotations of securities prices, days on which trades
may be made on such system or (iii) if the Class A Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on such
National Market system or similar system, days on which the Class A Common Stock
is traded regular way in the over-the-counter market and for which a closing bid
and a closing asked price for the Class A Common Stock are available.
"Transfer Agent" has the meaning specified in Section 202(a). The
Company has initially appointed the Trustee, the Principal Paying Agent and
Bankers Trust Luxembourg S.A. as Transfer Agents.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Underwriting Agreement" means the Underwriting Agreement, dated July
10, 1995, between the Company and Goldman Sachs International, Nat West
Securities Limited, J. Henry Schroder Wagg & Co. Limited and Swiss Bank
Corporation.
"United States" has the meaning specified in Section 202(a), except for
the purposes of the certificates set forth in Sections 304 and 311, in which
context it has the meaning specified in those sections.
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<PAGE> 22
"United States person" has the meaning specified in Section 202(a).
"Unrestricted Global Registered Security" means a Global Registered
Security which is not a Restricted Security.
"Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".
"Western Europe" means Austria, Belgium, Denmark, France, Germany,
Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland and the United Kingdom.
SECTION 102. Compliance Certificates and Opinions; Form of
Documents Delivered to Trustee.
(a) Upon any application or request by the Company to the Trustee or
the Principal Paying Agent to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee or the Principal Paying
Agent, as the case may be, 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, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (including certificates provided for
in Section 1009) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) 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;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as
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is necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
(b) In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 103. Acts of Holders of Securities.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders of Securities may be embodied in and evidenced by (1) one or
more instruments of substantially similar tenor signed by such Holders in person
or by an agent or proxy duly appointed in writing by such Holders or (2) the
record of Holders of Securities voting in favor thereof, either in person or by
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<PAGE> 24
proxies duly appointed in writing, at any meeting of Holders of Securities duly
called and held in accordance with the provisions of Article Nine. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record is delivered to the Trustee and copies
thereof are delivered to the Company. The Trustee shall promptly deliver to
the Company copies of all such instruments and records delivered to the
Trustee. Such instrument or instruments and record (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders of Securities signing such instrument or instruments and so voting
at such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent or proxy, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee and the Company if made in the
manner provided in this Section. The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section 906.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) The principal amount and serial number of any Bearer Security held
by any Person, and the date of his holding the same, may be proved by the
production of such Bearer Security or by a certificate executed by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee or the Principal Paying Agent to be
satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depositary, or exhibited to it, the Bearer Security therein
described; or such facts may be proved by the certificate or affidavit of the
Person holding such Bearer Security, if such certificate or affidavit is deemed
by the Trustee or the Principal Paying Agent to be satisfactory. The Trustee,
the Principal Paying Agent and the Company may assume that any Bearer Security
continues to be held by such Person until (1) another certificate or affidavit
bearing a later date issued in respect of such Bearer Security is produced, or
(2) such Bearer Security is produced to the Trustee or the Principal Paying
Agent by some other Person, or (3) such Bearer Security
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<PAGE> 25
is surrendered in exchange for a Registered Security, or (4) such Bearer
Security is no longer Outstanding.
(d) The principal amount and serial number of any Registered Security
held by any Person, and the date of his holding the same, shall be proved by the
Security Register.
(e) The principal amount and serial numbers of Bearer Securities held
by the Person so executing such instrument or writing and the date of holding
the same may also be proved in any other manner which the Trustee or the
Principal Paying Agent deems sufficient; and the Trustee or the Principal Paying
Agent may in any instance require further proof with respect to any of the
matters referred to in this Section 103.
(f) The fact and date of execution of any such instrument or writing
and the authority of the Person executing the same may also be proved in any
other manner which the Trustee or the Principal Paying Agent deems sufficient;
and the Trustee or the Principal Paying Agent may in any instance require
further proof with respect to any of the matters referred to in this Section
103.
(g) The Company may set any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted by this Indenture to be given or taken by
Holders. Promptly and in any case not later than ten days after setting a
record date, the Company shall notify the Trustee, the Principal Paying Agent
and the Holders of such record date. If not set by the Company prior to the
first solicitation of a Holder made by any Person in respect of any such action,
or, in the case of any such vote, prior to such vote, the record date for any
such action or vote shall be the 30th day (or, if later, the date of the most
recent list of Holders required to be provided pursuant to Section 1501) prior
to such first solicitation or vote, as the case may be. With regard to any
record date, the Holders on such date (or their duly appointed agents or
proxies), and only such Persons, shall be entitled to give or take, or vote on,
the relevant action, whether or not such Holders remain Holders after such
record date. Notwithstanding the foregoing, the Company shall not set a record
date for, and the provisions of this paragraph shall not apply with respect to,
any notice, declaration or direction referred to in the next paragraph.
Upon receipt by the Trustee or the Principal Paying Agent from any
Holder of (i) any notice of default or breach referred to in Section 501(3), if
such default or breach has
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<PAGE> 26
occurred and is continuing and the Trustee shall not have given such a notice
to the Company, (ii) any declaration of acceleration referred to in Section
502, if an Event of Default has occurred and is continuing and the Trustee
shall not have given such a declaration to the Company, or (iii) any direction
referred to in Section 512, if the Trustee shall not have taken the action
specified in such direction, then a record date shall automatically and without
any action by the Company or the Trustee be set for determining the Holders
entitled to join in such notice, declaration or direction, which record date
shall be the close of business on the tenth day (or, if such day is not a
Business Day, the first Business Day thereafter) following the day on which the
Trustee receives such notice, declaration or direction. Promptly after such
receipt by the Trustee, and as soon as practicable thereafter, the Trustee
shall notify the Company and the Holders of any such record date so fixed. The
Holders on such record date (or their duly appointed agents or proxies), and
only such Persons, shall be entitled to join in such notice, declaration or
direction, whether or not such Holders remain Holders after such record date;
provided that, unless such notice, declaration or direction shall have become
effective by virtue of Holders of the requisite principal amount of Securities
on such record date (or their duly appointed agents or proxies) having joined
therein on or prior to the 90th day after such record date, such notice,
declaration or direction shall automatically and without any action by any
Person be cancelled and of no further effect. Nothing in this paragraph shall
be construed to prevent a Holder (or a duly appointed agent or proxy thereof)
from giving, before or after the expiration of such 90-day period, a notice,
declaration or direction contrary to or different from, or, after the
expiration of such period, identical to, the notice, declaration or direction
to which such record date relates, in which event a new record date in respect
thereof shall be set pursuant to this paragraph. In addition, nothing in this
paragraph shall be construed to render ineffective any notice, declaration or
direction of the type referred to in this paragraph given at any time to the
Trustee and the Company by Holders (or their duly appointed agents or proxies)
of the requisite principal amount of Securities on the date such notice,
declaration or direction is so given.
(h) Except as provided in Sections 512 and 513, any request, demand,
authorization, direction, notice, consent, election, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and
any coupon appertaining thereto and the Holder of every Security or coupon
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the
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<PAGE> 27
Company in reliance thereon, whether or not notation of such action is made
upon such Security or coupon.
(i) The provisions of this Section 103 are subject to the
provisions of Section 905.
SECTION 104. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders of Securities or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,
(1) the Trustee or the Principal Paying Agent by any Holder
of Securities or by the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the
Trustee at its Corporate Trust Office, Attention: Corporate Trust and
Agency Group, or to or with the Principal Paying Agent at 1 Appold Street,
Broadgate, London EC2A 2HE, Attention: Corporate Trust and Agency Group,
or
(2) the Company by the Trustee or by any Holder of
Securities shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing, mailed, first-class
postage prepaid, or telecopied and confirmed by mail, first-class postage
prepaid, or delivered by hand or overnight courier, addressed to the
Company at 2525 Armitage Avenue, Melrose Park, Illinois 60160, telecopy
no.: (708) 450-3110, Attention: President and General Counsel, or at any
other address previously furnished in writing to the Trustee by the
Company.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that any published notice (other than a notice
published in Luxembourg) may be in an official language of the country of
publication.
SECTION 105. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event,
(1) such notice shall be sufficiently given to Holders of Bearer
Securities or any Temporary Global
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<PAGE> 28
Bearer Security if published in an Authorized Newspaper in the City of
London, England, and, so long as the Securities are listed on the
Luxembourg Stock Exchange and such stock exchange shall so require, in
Luxembourg or, if not practicable in either London, England, or
Luxembourg, elsewhere in any country in Western Europe, on a Business Day
at least twice, the first such publication to be not earlier than the
earliest date and the second such publication to be not later than the
latest date prescribed for the giving of such notice; and
(2) such notice shall be sufficiently given to Holders of
Registered Securities if in writing and mailed, first-class postage
prepaid, to each Holder of a Registered Security affected by such event,
at the address of such Holder as it appears in the Security Register, not
earlier than the earliest date and not later than the latest date
prescribed for the giving of such notice.
Neither the failure to give notice by publication to Holders of
Bearer Securities or any Temporary Global Bearer Security as provided above,
nor any defect in any notice so published, shall affect the sufficiency of any
notice mailed to Holders of Registered Securities as provided above. In case
by reason of the suspension of publication of any Authorized Newspaper or
Authorized Newspapers or by reason of any other cause it shall be impracticable
to publish any notice as provided above, then such notification as shall be
given with the approval of the Trustee, which approval shall not be
unreasonably withheld, shall constitute sufficient notice to such Holders for
every purpose hereunder.
In any case where notice to Holders of Registered Securities is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder of a Registered Security shall
affect the sufficiency of such notice with respect to other Holders of
Registered Securities or the sufficiency of any notice by publication to
Holders of Bearer Securities or any Temporary Global Bearer Security given as
provided above. In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification to Holders of Registered Securities as shall be
made with the approval of the Trustee, which approval shall not be unreasonably
withheld, shall constitute a sufficient notification to such Holders for every
purpose hereunder.
In the case of paragraph (1) of this section, such notice shall be
deemed to have been given on the date of such
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<PAGE> 29
publication or, if published in Authorized Newspapers on different dates, on
the date of the first such publication.
In the case of paragraph (2) of this section, such notice shall be
deemed to have been given when such notice is mailed.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 106. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 107. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 108. Separability Clause.
In case any provision in this Indenture or the Securities or coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 109. Benefits of Indenture.
Except as provided in the next sentence, nothing in this Indenture
or in the Securities or coupons, express or implied, shall give to any Person,
other than the parties hereto and their successors and assigns hereunder and
the Holders of Securities and coupons, any benefit or legal or equitable right,
remedy or claim under this Indenture. The provisions of Article Thirteen are
intended to be for the benefit of, and shall be enforceable directly by, the
holders of Senior Debt.
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<PAGE> 30
SECTION 110. Governing Law.
THIS INDENTURE AND THE SECURITIES AND COUPONS SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED
STATES OF AMERICA.
SECTION 111. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity of any Security or coupon or the last day on
which a Holder of a Security has a right to convert his Security shall not be a
Business Day at a Place of Payment or Place of Conversion, as the case may be,
then (notwithstanding any other provision of this Indenture or of the
Securities or coupons) payment of interest or principal or delivery for
conversion of such Security need not be made at such Place of Payment or Place
of Conversion, as the case may be, on or by such day, but may be made on or by
the next succeeding Business Day at such Place of Payment or Place of
Conversion, as the case may be, with the same force and effect as if made on
the Interest Payment Date, Redemption Date or Repurchase Date, or at the Stated
Maturity or by such last day for conversion; provided, however, that in the
case that payment is made on such succeeding Business Day, no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date, Redemption Date, Repurchase Date, Stated Maturity or last day for
conversion, as the case may be.
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ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities and the coupons shall be in substantially the forms
set forth in this Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange, the Internal Revenue Code of 1986,
as amended (the "Code"), and regulations thereunder, or as may, consistently
herewith, be determined by the officers executing such Securities and coupons,
as evidenced by their execution thereof.
The Trustee's certificates of authentication shall be in
substantially the form set forth in Section 205.
Conversion notices shall be in substantially the form set forth in
Section 205.
Registered Securities that are Restricted Securities shall bear the
legend required by Section 206.
The Registered Securities shall be issued in the form of one or more
Global Registered Securities and will only be issued in definitive form in
accordance with Section 304(b). The Depositary for such Global Registered
Securities shall initially be The Depository Trust Company.
A Global Security may be printed, lithographed, typewritten,
mimeographed or otherwise produced, as determined by the officers of the
Company executing such Security, as evidenced by their execution thereof. The
format and spacing of the text of a Definitive Security may be varied to
facilitate such production.
The Definitive Securities and coupons shall be printed, lithographed
or engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the officers executing such Securities and coupons, as evidenced by their
execution thereof.
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<PAGE> 32
SECTION 202. Forms of Securities.
(a) Form of Bearer Security
[FORM OF FACE]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.
ALBERTO-CULVER COMPANY
5 1/2% CONVERTIBLE SUBORDINATED DEBENTURE
DUE JUNE 30, 2005
No. B-_____________ U.S.$5,000
ALBERTO-CULVER COMPANY, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which
term includes any successor Person under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to bearer upon
presentation and surrender of this Security the principal sum of Five Thousand
United States Dollars on June 30, 2005 and to pay interest thereon, from July
13, 1995, or from the most recent Interest Payment Date (as defined below) to
which interest has been paid or duly provided for, semi-annually in arrears on
June 30 and December 31 in each year (an "Interest Payment Date"), commencing
December 31, 1995, at the rate of 5 1/2% per annum, until the principal hereof
is due, and at the rate of 5 1/2% per annum on any overdue principal and, to
the extent permitted by law, on any overdue interest. Such payments shall be
made, subject to any laws or regulations applicable thereto and to the right of
the Company (limited as provided in the Indenture) to terminate the appointment
of any such Paying Agent, at the option of the Holder at (a) the office of
Bankers Trust Company, 1 Appold Street, Broadgate, London EC2A 2HE, England,
(b) the office of Bankers Trust Luxembourg S.A., 14 Boulevard F.D. Roosevelt,
L-2450 Luxembourg, Grand Duchy of Luxembourg and (c) the office of Swiss Bank
Corporation, Paradeplatz 6, CH-8010 Zurich, Switzerland, or at such other
offices or agencies outside the United States (as defined below) as the Company
may designate, at the option of the Holder by United States Dollar check drawn
on a bank in The City of New York or by transfer of United States Dollars to an
account maintained by the payee with a bank located outside the United States
(such transfers to be made only to Holders of an aggregate principal amount of
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<PAGE> 33
Securities in excess of U.S.$2,000,000 provided that such Holder shall have
furnished wire instructions in writing to the Trustee by no later than 15 days
prior to the relevant payment date). Interest on this Security due on or
before Maturity shall be payable only upon presentation and surrender at such
an office or agency of the interest coupons hereto attached as they severally
mature. No payment of principal of or interest on, including Additional
Amounts (as defined below) with respect to, this Security shall be made at the
Corporate Trust Office of the Trustee under the Indenture referred to on the
reverse hereof or at any other office or agency of the Company in the United
States or by check mailed to any address in the United States or by transfer to
an account maintained with a bank located in the United States; provided,
however, that payment of principal of or interest on this Security and payment
of any such Additional Amounts may be made at the office of the Paying Agent in
the Borough of Manhattan, The City of New York, if (but only if) payment of the
full amount of such principal, interest or Additional Amounts, as the case may
be, at all offices outside the United States maintained for such purpose by the
Company in accordance with the Indenture is illegal or effectively precluded by
exchange controls or other similar restrictions on the full payment or receipt
of such amounts in United States Dollars, as determined by the Company.
The Company will pay to the Holder of this Security or any coupon
appertaining hereto who is not a United States person (as defined below) such
additional amounts ("Additional Amounts") as may be necessary in order that
every net payment of the principal of and interest on this Security (including
payment on redemption or repurchase), after deduction or withholding for or on
account of any present or future tax, assessment or governmental charge imposed
upon or as a result of such payment by the United States or any political
subdivision or taxing authority thereof or therein, will not be less than the
amount provided for in this Security or in such coupon to be then due and
payable; provided, however, that the foregoing obligation to pay Additional
Amounts will not apply to:
(a) any tax, assessment or other governmental charge which would
not have been so imposed but for (i) the existence of any present or
former connection between such Holder (or between a fiduciary, settlor,
beneficiary, member, shareholder of or possessor of a power over such
Holder, if such Holder is an estate, a trust, a partnership or a
corporation) and the United States or any political subdivision or taxing
authority thereof or therein, including, without limitation, such Holder
(or such fiduciary, settlor, beneficiary, member,
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<PAGE> 34
shareholder or possessor) being or having been a citizen or resident of
the United States or treated as a resident thereof, or being or having
been engaged in trade or business or present therein, or having or having
had a permanent establishment therein, or (ii) such Holder's present or
former status as a personal holding company, a foreign personal holding
company with respect to the United States, a controlled foreign
corporation or a passive foreign investment company for United States tax
purposes or a corporation which accumulates earnings to avoid United
States Federal income tax;
(b) any tax, assessment or other governmental charge which would
not have been so imposed but for the presentation by the Holder of this
Security or any coupon appertaining hereto for payment on a date more than
15 days after the date on which such payment became due and payable or the
date on which payment thereof is duly provided for, whichever occurs
later;
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which would
not have been imposed but for the failure to comply with any
certification, identification or other reporting requirements concerning
the nationality, residence, identity or connection with the United States
of the Holder or beneficial owner of this Security or any coupon
appertaining hereto, if compliance is required by statute or by regulation
of the United States Treasury Department as a precondition to exemption
from such tax, assessment or other governmental charge;
(e) any tax, assessment or other governmental charge which is
payable otherwise than by deduction or withholding from payments of
principal of or interest on this Security;
(f) any tax, assessment or other governmental charge imposed as a
result of a Person's past or present actual or constructive ownership of
10% or more of the total combined voting power of all classes of stock of
the Company entitled to vote;
(g) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of the principal of or
interest on this Security, if such payment can be made without such
withholding by any other Paying Agent in Western Europe;
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<PAGE> 35
(h) any tax, assessment or other governmental charge imposed on a
Holder that is not the beneficial owner of this Security or that is a
partnership or a fiduciary, but only to the extent that any beneficial
owner or member of the partnership or beneficiary or settlor with respect
to the fiduciary would not have been entitled to the payment of Additional
Amounts had the beneficial owner or member directly received its
beneficial or distributive share of payments on this Security;
(i) any tax, assessment or other governmental charge which would not
have been imposed but for the fact that this Security constitutes a
"United States real property interest", as defined in Section 897(c)(1) of
the United States Internal Revenue Code of 1986, as amended, with respect
to the beneficial owner of this Security; or
(j) any combination of items (a), (b), (c), (d), (e), (f), (g), (h)
and (i).
For purposes of this Security, "United States" means the United
States of America (including the States and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction, and
"United States person" is a person who, for United States Federal income tax
purposes, is (a) a citizen or resident of the United States, (b) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof or (c) an estate or trust
the income of which is subject to United States Federal income taxation
regardless of source.
Notwithstanding the foregoing, if and so long as a certification,
identification or other information reporting requirement referred to in the
fourth paragraph of the reverse hereof would be fully satisfied by payment of a
backup withholding tax or similar charge, the Company may elect, by so stating
in the Determination Notice (as defined on the reverse hereof), to have the
provisions of this paragraph apply in lieu of the provisions of such paragraph.
In such event, the Company will pay as Additional Amounts such amounts as may
be necessary so that every net payment made, following the effective date of
such requirements, outside the United States by the Company or any Paying Agent
of principal due in respect of this Security, or interest represented by any
coupon, the beneficial owner of which is not a United States person (but
without any requirement that the nationality, residence or identity of such
beneficial owner be disclosed to the Company, any Paying Agent or any
governmental authority), after deduction or withholding for or on account of
such backup withholding tax or similar charge, other than a backup
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<PAGE> 36
withholding tax or similar charge which is (a) the result of a certification,
identification or information reporting requirement described in the first
parenthetical clause of such paragraph, (b) imposed as a result of the fact
that the Company or any Paying Agent has actual knowledge that the beneficial
owner of this Security or such coupon is within the category of Persons
described in clause (a) of the second preceding paragraph or (c) imposed as a
result of presentation of this Security or such coupon for payment more than 15
days after the date on which such payment becomes due and payable or on which
payment thereof is duly provided for, whichever occurs later, will not be less
than the amount provided for in this Security or such coupon to be then due and
payable.
Except as specifically provided herein and in the Indenture, the
Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein. Whenever in this
Security there is a reference, in any context, to the payment of the principal
of or interest on, or in respect of, any Security or any coupon appertaining
thereto, such mention shall be deemed to include mention of the payment of
Additional Amounts payable pursuant to the first and third preceding paragraphs
to the extent that, in such context, Additional Amounts are, were or would be
payable in respect of this Security pursuant to such paragraphs, and express
mention of the payment of Additional Amounts (if applicable) in any provisions
of this Security shall not be construed as excluding Additional Amounts in
those provisions of this Security where such express mention is not made.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by the manual signature of one of
its authorized signatories, neither this Security, nor any coupon appertaining
hereto, shall be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed under its corporate seal and coupons bearing the facsimile signature
of its Treasurer to be annexed hereto.
Dated as of June 30, 1995
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<PAGE> 37
ALBERTO-CULVER COMPANY
[Corporate Seal]
By:__________________________
Title:
Attest:
________________________
Title:
[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities of the
Company designated as its "5 1/2% Convertible Subordinated Debentures due June
30, 2005" (herein called the "Securities"), limited in aggregate principal
amount to U.S.$100,000,000, issued and to be issued under an Indenture, dated
as of June 30, 1995 (herein called the "Indenture"), between the Company and
Bankers Trust Company, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Debt and the Holders of the
Securities and any coupons appertaining thereto and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The Securities are
issuable as Bearer Securities, with interest coupons attached, in the
denomination of U.S.$5,000 and as Registered Securities, without coupons, in
denominations of (a) U.S.$100,000 and integral multiples of U.S.$1,000 in
excess thereof if such Registered Securities are Restricted Securities; and (b)
U.S.$5,000 and integral multiples of U.S.$1,000 in excess thereof if such
Registered Securities are not Restricted Securities. As provided in the
Indenture and subject to certain limitations therein set forth, Bearer
Securities are exchangeable for a like aggregate principal amount of Registered
Securities of any authorized denominations as requested by the Holder
surrendering the same upon surrender of the Security or Securities to be
exchanged, with all unmatured coupons and all matured coupons in default
thereto appertaining, except as provided below, (a) at the Corporate Trust
Office of the Trustee or at such other office or agency of the Company as
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may be designated by it for such purpose in The City of New York or (b) subject
to any laws or regulations applicable thereto and to the right of the Company
to terminate the appointment of any Transfer Agent (as defined below), (i) the
office of Bankers Trust Company, 1 Appold Street, Broadgate, London EC2A 2HE,
England (the "Principal Paying Agent") or (ii) the office of Bankers Trust
Luxembourg S.A., 14 Boulevard F.D. Roosevelt, L-2450 Luxembourg, Grand Duchy
of Luxembourg, or at such other offices or agencies outside the United States
as the Company may designate (each a "Transfer Agent"); provided, however, that
such surrender may be made at the Corporate Trust Office of the Trustee in the
Borough of Manhattan, The City of New York, if (but only if) such surrender at
all offices outside the United States maintained for such purpose by the
Company in accordance with the Indenture is illegal or effectively precluded by
exchange controls or other similar restrictions. Bearer Securities surrendered
in exchange for Registered Securities between a Record Date and the relevant
Interest Payment Date or date for payment of Defaulted Interest will not be
required to be surrendered with the coupon relating to such Interest Payment
Date or date for payment of Defaulted Interest. Bearer Securities may not be
issued in exchange for Registered Securities.
No sinking fund is provided for the Securities. The Securities are
subject to redemption at the option of the Company on or after June 30, 1998,
in whole but not in part, upon not more than 60 nor less than 30 days' notice
to the Holders prior to the Redemption Date, at a Redemption Price equal to
100% of the principal amount plus accrued interest to the Redemption Date, and
Securities held by non-United States persons are also redeemable in whole but
not in part, under the circumstances described in the next two succeeding
paragraphs, at a Redemption Price equal to 100% of the principal amount plus
interest accrued to the Redemption Date; provided, however, that interest
installments on Bearer Securities whose Stated Maturity is on or prior to such
Redemption Date will be payable only upon presentation and surrender of coupons
for such interest (at an office or agency outside the United States except as
herein provided otherwise); and provided further that payments of principal
upon redemption of any Security shall be made only upon delivery to the Company
of a certification, substantially in the form provided in Section 311(b) of the
Indenture, by the Holder as to whether the Security surrendered in connection
with such redemption is a "United States real property interest", as defined in
the United States Internal Revenue Code of 1986, as amended, with respect to
the beneficial owner of the Security being surrendered.
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If as a result of a Tax Law Change, the Company has or will become
obligated to pay to the Holder of any Security or coupon Additional Amounts, as
described in the second paragraph of the face of this Security, and such
obligation cannot be avoided by the Company taking reasonable measures
available to it, then the Company may, at its option, redeem the Tax Affected
Securities as a whole, but not in part, upon not more than 60 nor less than 30
days' notice to the Holders prior to the Redemption Date, at a Redemption Price
equal to 100% of the principal amount plus interest accrued to the Redemption
Date, but without reduction for any applicable United States withholding taxes;
provided, that (i) no such notice of redemption shall be given earlier than 90
days prior to the earliest date on which the Company would be obligated to pay
any such Additional Amounts were a payment in respect of the Tax Affected
Securities then due and (ii) at the time such notice of redemption is given,
such obligation to pay such Additional Amounts remains in effect. Prior to the
publication of any notice of redemption pursuant to this paragraph, the Company
shall deliver to the Trustee (a) an Officers' Certificate stating that the
Company is entitled to effect such redemption and setting forth a statement of
facts showing that the conditions precedent to the right of the Company so to
redeem have occurred and (b) an Opinion of Counsel selected by the Company to
the effect that the Company has or will become obligated to pay such Additional
Amounts as a result of such change or amendment. The Company's right to redeem
the Tax Affected Securities shall continue as long as the Company is obligated
to pay such Additional Amounts, notwithstanding that the Company shall have
made payments of Additional Amounts specified in such second paragraph.
In addition, if the Company determines, based upon an Opinion of
Counsel, selected by the Company that, as a result of a Tax Law Change, any
payment made outside the United States by the Company or any of its Paying
Agents of the full amount of principal or interest due with respect to any
Bearer Security or coupon appertaining thereto would be subject to any
certification, identification or other information reporting requirement of any
kind, the effect of which requirement is the disclosure to the Company, any
Paying Agent or any governmental authority of the nationality, residence or
identity of a beneficial owner of such Bearer Security or coupon who is not a
United States person (other than such a requirement (a) which would not be
applicable to a payment made by the Company or any one of its Paying Agents (i)
directly to the beneficial owner or (ii) to any custodian, nominee or other
agent of the beneficial owner, (b) which can be satisfied by the custodian,
nominee or other agent certifying that such beneficial owner is not a United
States person, provided that, in each case referred to in clauses (a)(ii) and
(b), payment by such
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custodian, nominee or agent to such beneficial owner is not otherwise subject
to any such requirement, or (c) which would not be applicable but for the fact
that such Bearer Security constitutes a "United States real property interest,"
as defined in Section 897(c)(1) of the United States Internal Revenue Code of
1986, as amended, with respect to the beneficial owner of such Bearer
Security), the Company at its election will either (x) redeem the Bearer
Securities, as a whole but not in part, upon not less than 30 nor more than 60
days' notice prior to the Redemption Date, at a Redemption Price equal to 100%
of the principal amount plus interest accrued to the Redemption Date, or (y) if
and so long as the conditions of the second paragraph on the face hereof are
satisfied, pay the Additional Amounts specified in such paragraph. The Company
will make such determination and election and notify the Trustee and the
Principal Paying Agent thereof in writing as soon as practicable, and the
Trustee will promptly give notice of such determination in the manner provided
in the following paragraph (the "Determination Notice"), in each case stating
the effective date of such certification, identification or information
reporting requirement, whether the Company will redeem the Securities or will
pay the Additional Amounts specified in the second paragraph on the face hereof
and (if applicable) the last date by which the redemption of the Securities
must take place. If the Company elects to redeem the Bearer Securities, such
redemption shall take place on a date, not later than one year after the
publication of the Determination Notice, as the Company elects by notice in
writing to the Trustee and the Principal Paying Agent at least 75 days before
the Redemption Date, unless shorter notice is acceptable to the Trustee.
Notwithstanding the foregoing, the Company will not so redeem the Securities if
the Company, based upon an Opinion of Counsel selected by the Company
subsequently determines, not less than 30 days prior to the Redemption Date,
that subsequent payments would not be subject to any such requirement, in which
case the Company will notify the Trustee in writing, and the Trustee will
promptly give notice to the Holders of the Bearer Securities of that
determination and any earlier redemption notice will thereupon be revoked and
of no further effect. If the Company elects as provided in clause (y) above to
pay Additional Amounts, the Company may, as long as the Company is obligated to
pay such Additional Amounts, subsequently redeem all the Bearer Securities, at
any time, as a whole but not in part, upon not less than 30 nor more than 60
days' notice prior to the Redemption Date, at a Redemption Price equal to 100%
of the principal amount plus interest accrued to the Redemption Date, but
without reduction for applicable United States withholding taxes with respect
to which the Company is obligated to pay Additional Amounts. In the event of a
redemption for such taxation reasons, the Company will not be required (a) to
register the transfer of or
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exchange Registered Debentures or to exchange Bearer Debentures for Registered
Debentures for a period of 15 days immediately preceding the date notice is
given identifying the serial numbers of the Debentures called for such
redemption, (b) to register the transfer of or exchange any Registered
Debenture, or portion thereof, called for redemption, or (c) to exchange any
Bearer Debenture called for redemption; provided, however, that a Bearer
Debenture called for redemption may be exchanged for a Registered Debenture
which is simultaneously surrendered to the Registrar or Transfer Agent making
such exchange with written instructions for payment consistent with the
provisions described in Sections 205 and 1202 of the Indenture.
Notice of redemption will be given by publication in Authorized
Newspapers in the City of London, England, and, so long as the Securities are
listed on the Luxembourg Stock Exchange and the rules of such stock exchange
shall so require, in Luxembourg, or, if not practicable in either London,
England, or Luxembourg, elsewhere in any country in Western Europe, and by mail
to Holders of Registered Securities. Notice to the Holders will be given at
least once not more than 60 nor less than 30 days prior to the Redemption Date
as provided in the Indenture.
In any case where the due date for the payment of the principal of
or interest, including Additional Amounts, on any Security or the last day on
which a Holder of a Security has a right to convert his Security shall be, at
any Place of Payment or Place of Conversion, as the case may be, a day on which
banking institutions at such Place of Payment or Place of Conversion are
authorized or obligated by law or executive order to close, then payment of
principal or interest, including Additional Amounts, or delivery for conversion
of such Security need not be made on or by such date at such place but may be
made on or by the next succeeding day at such place which is not a day on which
banking institutions are authorized or obligated by law or executive order to
close, with the same force and effect as if made on the date for such payment
or the date fixed for redemption, or by such last day for conversion, and no
interest shall accrue for the period after such date.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time after
September 11, 1995 and on or before the close of business on June 30, 2005, or
in case this Security is called for redemption or the Holder hereof has
exercised his right to require the Company to repurchase this Security, then in
respect of this Security until and including, but (unless the Company defaults
in making the payment due upon redemption or repurchase, as the case may be)
not after, the close of business on the Redemption Date or the fifth Trading
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Day prior to the Repurchase Date, as the case may be, to convert this Security
into newly issued, fully paid and nonassessable shares of Class A Common Stock
of the Company at an initial Conversion Rate equal to 30.888 shares of Class A
Common Stock per U.S.$1,000 principal amount of Securities (or at the current
adjusted Conversion Rate if an adjustment has been made as provided in the
Indenture) by surrender of this Security, together with all coupons
appertaining hereto that mature after the date of conversion, and also the
conversion notice hereon, duly executed to the Company, subject to any laws or
regulations applicable thereto and subject to the right of the Company to
terminate the appointment of any Conversion Agent (as defined below), at (a)
the office of Bankers Trust Company, 1 Appold Street, Broadgate, London EC2A
2HE, England, and (b) the office of Bankers Trust Luxembourg S.A., 14 Boulevard
F.D. Roosevelt, L-2450 Luxembourg, Grand Duchy of Luxembourg, or at such other
offices or agencies outside the United States as the Company may designate
(each a "Conversion Agent"); provided, however, that such surrender for
conversion may be made at the Corporate Trust Office of the Trustee in the
Borough of Manhattan, The City of New York, if (but only if) such surrender for
conversion at all offices outside the United States maintained for such purpose
by the Company in accordance with the Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions. Subject to the
aforesaid requirement to surrender coupons, no cash payment or adjustment is to
be made on conversion if the date of conversion is not an Interest Payment
Date, for interest accrued hereon from the Interest Payment Date next preceding
the date of conversion, or for dividends on the Class A Common Stock issued on
conversion hereof. The Company shall thereafter deliver to the Holder the
fixed number of shares of Class A Common Stock (together with any cash
adjustment, as provided in the Indenture) into which this Security is
convertible and such delivery will be deemed to satisfy the Company's
obligation to pay the principal amount of this Security. The Conversion Rate
will not be adjusted at any time during the term of this Security for dividends
on the Common Stock issued on conversion. No fractions of shares or scrip
representing fractions of shares will be issued on conversion, but instead of
any fractional interest (calculated to the nearest 1/100th of a share) the
Company shall pay a cash adjustment as provided in the Indenture. The
Conversion Rate is subject to adjustment as provided in the Indenture. In
addition, the Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the conveyance, transfer, sale or
lease of all or substantially all of the property and assets of the Company,
the Indenture shall be amended, without the consent of any Holders of
Securities, so that this Security, if then Outstanding, will be convertible
thereafter, during the period this Security shall
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be convertible as specified above, only into the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, conveyance,
transfer, sale or lease by a holder of the number of shares of Class A Common
Stock of the Company into which this Security could have been converted
immediately prior to such consolidation, merger, conveyance, transfer, sale or
lease (assuming such holder of Common Stock is not a Constituent Person, failed
to exercise any rights of election and received per share the kind and amount
received per share by a plurality of Non-electing Shares and further assuming,
if such consolidation, merger, conveyance, transfer, sale or lease occurs prior
to the Exchange Date, that the Temporary Global Bearer Security was convertible
at the time of such occurrence at the Conversion Rate specified above as
adjusted from the Issue Date of such Security to such time as provided in the
Indenture). No adjustment in the Conversion Rate will be made until such
adjustment would require an increase or decrease of at least one percent of
such rate, provided that any adjustment that would otherwise be made will be
carried forward and taken into account in the computation of any subsequent
adjustment.
Subject to certain limitations in the Indenture, at any time when
the Company is not subject to Section 13 or 15(d) of the United States
Securities Exchange Act of 1934, as amended, upon the request of a Holder of a
Restricted Security or the holder of shares of Class A Common Stock issued upon
conversion thereof, the Company will promptly furnish or cause to be furnished
Rule 144A Information (as defined below) to such Holder of Restricted
Securities or such holder of shares of Common Stock issued upon conversion of
Restricted Securities, or to a prospective purchaser of any such security
designated by any such Holder or holder, as the case may be, to the extent
required to permit compliance by any such Holder or holder with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"), in
connection with the resale of any such security. "Rule 144A Information" shall
be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).
If a Risk Event (as defined in the Indenture) occurs, the Holder of
this Security shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security for cash at a
Repurchase Price equal to 100% of the principal amount plus accrued interest to
the Repurchase Date; provided, however, that interest installments on Bearer
Securities whose Stated Maturity is on or prior to such Repurchase Date will be
payable only upon presentation and surrender of coupons for such interest (at
an office or agency outside the United States except as herein provided
otherwise); and provided further that payments of principal upon repurchase
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of any Security shall be made only upon delivery to the Company of a
certification, substantially in the form provided in Section 311(b) of the
Indenture, by the Holder as to whether the Security surrendered in connection
with such repurchase is a "United States real property interest", as defined in
the United States Internal Revenue Code of 1986, as amended, with respect to
the beneficial owner of the Security being surrendered. Whenever in this
Security there is a reference, in any context, to the principal of any Security
as of any time, such reference shall be deemed to include reference to the
Repurchase Price payable in respect of such Security to the extent that such
Repurchase Price is, was or would be so payable at such time, and express
mention of the Repurchase Price in any provision of this Security shall not be
construed as excluding the Repurchase Price in those provisions of this
Security when such express mention is not made.
The indebtedness evidenced by this Security and any coupons
appertaining hereto is, to the extent and in the manner provided in Article
Thirteen of the Indenture, subordinate and subject in right of payment to the
prior payment in full of all amounts then due on all Senior Debt of the
Company, and this Security is issued subject to such provisions of Article
Thirteen of the Indenture with respect thereto. Each Holder of this Security
or any coupon appertaining to this Security, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the principal
(in the amount specified in the next sentence) of all the Securities, together
with accrued interest to the date of declaration, may be declared due and
payable in the manner and with the effect provided in the Indenture. Upon
payment (i) of the amount of principal so declared due and payable, together
with accrued interest to the date of declaration, and (ii) of interest on any
overdue principal and overdue interest, all of the Company's obligations in
respect of the payment of the principal of and interest on the Securities shall
terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities and coupons under the
Indenture at any time by the Company and the Trustee with either (a) the
written consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding, or (b) by the adoption of a resolution, at
a meeting of Holders of the
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Outstanding Securities at which a quorum is present, by the Holders of 66 2/3%
in principal amount of the Outstanding Securities represented and entitled to
vote at such meeting. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities and coupons,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and any
coupon appertaining hereto and of any Security issued in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon
this Security or such other Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security or any coupon appertaining hereto shall not have the
right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless
such Holder shall have previously given the Trustee written notice of a
continuing Event of Default, the Holders of not less than 25% in principal
amount of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity and the Trustee shall not have
received from the Holders of a majority in principal amount of the Securities
Outstanding a direction inconsistent with such request, and shall have failed
to institute any such proceeding, for 60 days after receipt of such notice,
request and offer of indemnity. The foregoing shall not apply to any suit
instituted by the Holder of this Security or any coupon appertaining hereto for
the enforcement of any payment of principal hereof or interest hereon
(including any Additional Amounts) on or after the respective due dates
expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest (including Additional Amounts, as described on the face hereof) on
this Security at the times, places and rate, and in the coin or currency,
herein prescribed or to convert this Security as provided in the Indenture.
Title to Bearer Securities and coupons shall pass by delivery. As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of Registered Securities is registrable on the Security Register
upon surrender of a Registered Security for registration of transfer (a)
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at the Corporate Trust Office of the Trustee, or at such other office or agency
of the Company as may be designated by it for such purpose in The City of New
York, or (b) subject to any laws or regulations applicable thereto and to the
right of the Company to terminate the appointment of any Transfer Agent, at the
offices of the Transfer Agents described herein or at such other offices or
agencies as the Company may designate, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder thereof or its attorney duly
authorized in writing, and thereupon one or more new Registered Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees. No service charge shall be
made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to recover any tax or other governmental
charge payable in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of a Bearer Security and any coupon appertaining thereto,
and prior to due presentation of a Registered Security for registration of
transfer the Person in whose name a Registered Security is registered, as the
owner thereof for all purposes, whether or not the Security or coupon be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
THE INDENTURE, THE SECURITIES AND ANY COUPONS APPERTAINING THERETO
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, UNITED STATES OF AMERICA.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 1401 of the Indenture, the undersigned
hereby elects to have this Security repurchased by the Company.
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2. The undersigned hereby directs the Trustee or the Principal
Paying Agent to pay bearer an amount in cash equal to 100% of the principal
amount hereof plus interest accrued to the Repurchase Date.
Dated: _______________________ ________________________
Signature
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(b) Form of Registered Security
[FORM OF FACE]
[THE FOLLOWING LEGEND (THE "RULE 144A LEGEND") SHALL APPEAR ON THE FACE OF EACH
RESTRICTED SECURITY OTHER THAN ANY GLOBAL REGISTERED SECURITY:
THIS DEBENTURE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS DEBENTURE AND ANY SHARES OF
CLASS A COMMON STOCK ISSUABLE UPON ITS CONVERSION MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. DEBENTURES MAY ONLY BE SOLD IN ACCORDANCE WITH THE INDENTURE,
COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT THE CORPORATE TRUST OFFICE OF
THE TRUSTEE. EACH PURCHASER OF THIS DEBENTURE IS HEREBY NOTIFIED THAT THE
SELLER OF THIS DEBENTURE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS DEBENTURE AGREES FOR THE BENEFIT OF
ALBERTO-CULVER COMPANY THAT (A) THIS DEBENTURE AND ANY SHARES OF CLASS A COMMON
STOCK ISSUABLE UPON ITS CONVERSION MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(III) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (IV) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), AND IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES, AND
THAT (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS DEBENTURE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
(A) ABOVE.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED GLOBAL
REGISTERED SECURITY:
THE DEBENTURES EVIDENCED BY THIS GLOBAL REGISTERED SECURITY WERE
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SUCH
DEBENTURES AND ANY SHARES OF CLASS A COMMON STOCK ISSUABLE UPON THEIR
CONVERSION MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
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THEREFROM AND IN ACCORDANCE WITH THE INDENTURE, COPIES OF WHICH ARE AVAILABLE
FOR INSPECTION AT THE CORPORATE TRUST OFFICE OF THE TRUSTEE. EACH PURCHASER OF
THIS DEBENTURE IS HEREBY NOTIFIED THAT THE SELLER OF THIS DEBENTURE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
EACH BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE DEBENTURES
EVIDENCED BY THIS GLOBAL REGISTERED SECURITY (INCLUDING ANY PARTICIPANT IN THE
DEPOSITARY HOLDING THE GLOBAL REGISTERED SECURITY THAT IS SHOWN AS HOLDING SUCH
AN INTEREST ON THE RECORDS OF SUCH DEPOSITARY AND EACH BENEFICIAL OWNER THAT
HOLDS THROUGH ANY SUCH PARTICIPANT) AGREES FOR THE BENEFIT OF ALBERTO-CULVER
COMPANY THAT (A) ANY BENEFICIAL INTEREST IN THE DEBENTURES OR ANY SHARES OF
CLASS A COMMON STOCK ISSUABLE UPON THEIR CONVERSION MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (III) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (IV) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), AND IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES, AND
THAT (B) THE BENEFICIAL OWNER WILL, AND EACH SUBSEQUENT OWNER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF ANY BENEFICIAL INTEREST IN THE DEBENTURE FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL REGISTERED
SECURITY:
THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY,
THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL
PURPOSES.
UNLESS THE SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS SECURITY IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR
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OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED
SECURITIES IN DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED
TO IN THE INDENTURE, THIS GLOBAL REGISTERED SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]
ALBERTO-CULVER COMPANY
5 1/2% CONVERTIBLE SUBORDINATED DEBENTURE
DUE JUNE 30, 2005
No. R-_____________ U.S.$_____
CUSIP No. ____________
Alberto-Culver Company, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which
term includes any successor Person under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to _______________,
or registered assigns, the principal sum of _____________ United States Dollars
on June 30, 2005 and to pay interest thereon, from July 13, 1995, or from the
most recent Interest Payment Date (as defined below) to which interest has been
paid or duly provided for, semi-annually in arrears on June 30 and December 31
in each year (the "Interest Payment Date"), commencing December 31, 1995, at
the rate of 5 1/2% per annum, until the principal hereof is due, and at the
rate of 5 1/2% per annum on any overdue principal and, to the extent permitted
by law, on any overdue interest. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the June 15 or December 15
(whether or not a Business Day) next preceding such Interest Payment Date.
Except as otherwise provided in the Indenture, any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special
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Record Date for the payment of such Defaulted Interest to be fixed by the
Company, notice whereof shall be given to Holders of Registered Securities not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture. Payments of principal shall be made upon the surrender of this
Security at the option of the Holder at the Corporate Trust Office of the
Trustee, or at such other office or agency of the Company as may be designated
by it for such purpose in The City of New York, 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, or at such other offices or agencies
as the Company may designate, by United States Dollar check drawn on, or
transfer to a United States Dollar account (such transfers to be made only to
Holders of an aggregate principal amount of Securities in excess of
U.S.$2,000,000 provided that such Holder shall have furnished wire instructions
in writing to the Trustee no later than 15 days prior to the relevant payment
date) maintained by the payee with a bank in The City of New York. Payment of
interest on this Security may be made by United States Dollar check drawn on a
bank in The City of New York mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register, or, upon written
application by the Holder to the Security Registrar setting forth wire
instructions not later than the relevant Record Date, by transfer to a United
States Dollar account (such transfers to be made only to Holders of an
aggregate principal amount of Securities in excess of U.S.$2,000,000 provided
that such Holder shall have furnished wire instructions in writing to the
Trustee no later than 15 days prior to the relevant payment date) maintained by
the payee with a bank in The City of New York.
The Company will pay to the Holder of this Security who is not a
United States person (as defined below) such additional amounts ("Additional
Amounts") as may be necessary in order that every net payment of the principal
of and interest on this Security (including payment on redemption or
repurchase), after deduction or withholding for or on account of any present or
future tax, assessment or governmental charge imposed upon or as a result of
such payment by the United States or any political subdivision or taxing
authority thereof or therein, will not be less than the amount provided for in
this Security to be then due and payable; provided, however, that the foregoing
obligation to pay Additional Amounts will not apply to:
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(a) any tax, assessment or other governmental charge which would
not have been so imposed but for (i) the existence of any present or
former connection between such Holder (or between a fiduciary, settlor,
beneficiary, member, shareholder of or possessor of a power over such
Holder, if such Holder is an estate, a trust, a partnership or a
corporation) and the United States or any political subdivision or taxing
authority thereof or therein, including, without limitation, such Holder
(or such fiduciary, settlor, beneficiary, member, shareholder or
possessor) being or having been a citizen or resident of the United States
or treated as a resident thereof, or being or having been engaged in trade
or business or present therein, or having or having had a permanent
establishment therein, or (ii) such Holder's present or former status as a
personal holding company, a foreign personal holding company with respect
to the United States, a controlled foreign corporation or a passive
foreign investment company for United States tax purposes or a corporation
which accumulates earnings to avoid United States Federal income tax;
(b) any tax, assessment or other governmental charge which would
not have been so imposed but for the presentation by the Holder of this
Security for payment on a date more than 15 days after the date on which
such payment became due and payable or the date on which payment thereof
is duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which would
not have been imposed but for the failure to comply with any
certification, identification or other reporting requirements concerning
the nationality, residence, identity or connection with the United States
of the Holder or beneficial owner of this Security, if compliance is
required by statute or by regulation of the United States Treasury
Department as a precondition to exemption from such tax, assessment or
other governmental charge;
(e) any tax, assessment or other governmental charge which is
payable otherwise than by deduction or withholding from payments of
principal of or interest on this Security;
(f) any tax, assessment or other governmental charge imposed as a
result of a Person's past or present actual
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or constructive ownership of 10% or more of the total combined voting power
of all classes of stock of the Company entitled to vote;
(g) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of the principal of or
interest on this Security, if such payment can be made without such
withholding by any other Paying Agent in Western Europe;
(h) any tax, assessment or other governmental charge imposed on a
Holder that is not the beneficial owner of this Security or that is a
partnership or a fiduciary, but only to the extent that any beneficial owner
or member of the partnership or beneficiary or settlor with respect to the
fiduciary would not have been entitled to the payment of Additional Amounts
had the beneficial owner or member directly received its beneficial or
distributive share of payments on this Security;
(i) any tax, assessment or other governmental charge which would not
have been imposed but for the fact that this Security constitutes a "United
States real property interest", as defined in Section 897(c)(1) of the
United States Internal Revenue Code of 1986, as amended, with respect to the
beneficial owner of this Security; or
(j) any combination of items (a), (b), (c), (d), (e), (f), (g), (h) and
(i).
For purposes of this Security, "United States" means the United States
of America (including the States and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction, and
"United States person" is a person who, for United States Federal income tax
purposes, is (a) a citizen or resident of the United States, (b) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof or (c) an estate or trust
the income of which is subject to United States Federal income taxation
regardless of source.
Notwithstanding the foregoing, if and so long as a certification,
identification or other information reporting requirement relating to a Bearer
Security or coupon and referred to in the fourth paragraph of the reverse
hereof would be fully satisfied by payment of a backup withholding tax or
similar charge, the Company may elect, by so stating in the Determination
Notice (as defined on the reverse hereof), to have the provisions of this
paragraph apply in lieu of the provisions of such paragraph. In such event,
the Company will
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pay as Additional Amounts such amounts as may be necessary so that every net
payment made, following the effective date of such requirements, outside the
United States by the Company or any Paying Agent of principal due in respect of
any Bearer Security, or interest represented by any coupon, the beneficial
owner of which is not a United States person (but without any requirement that
the nationality, residence or identity of such beneficial owner be disclosed to
the Company, any Paying Agent or any governmental authority), after deduction
or withholding for or on account of such backup withholding tax or similar
charge (other than a backup withholding tax or similar charge which is (a) the
result of a certification, identification or information reporting requirement
described in the first parenthetical clause of such paragraph, (b) imposed as a
result of the fact that the Company or any Paying Agent has actual knowledge
that the beneficial owner of such Bearer Security or such coupon is within the
category of Persons described in clause (a) of the second preceding paragraph
or (c) imposed as a result of presentation of such Bearer Security or such
coupon for payment more than 15 days after the date on which such payment
becomes due and payable or on which payment thereof is duly provided for,
whichever occurs later), will not be less than the amount provided for in such
Bearer Security or such coupon to be then due and payable.
Except as specifically provided herein and in the Indenture, the
Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein. Whenever in this
Security there is a reference, in any context, to the payment of the principal
of or interest on, or in respect of, any Security or any coupon appertaining
thereto, such mention shall be deemed to include mention of the payment of
Additional Amounts payable as described in the first and third preceding
paragraphs to the extent that, in such context, Additional Amounts are, were or
would be payable in respect of such Security or coupon described in such
paragraphs, and express mention of the payment of Additional Amounts (if
applicable) in any provisions of this Security shall not be construed as
excluding Additional Amounts in those provisions of this Security where such
express mention is not made.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by the manual signature of one of
its authorized signatories,
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this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed under its corporate seal.
Dated:
ALBERTO-CULVER COMPANY
[Corporate Seal]
By:__________________________
Title:
Attest:
________________________
Title:
[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities of the
Company designated as its "5 1/2% Convertible Subordinated Debentures due June
30, 2005" (herein called the "Securities"), limited in aggregate principal
amount to U.S.$100,000,000, issued and to be issued under an Indenture, dated
as of June 30, 1995 (herein called the "Indenture"), between the Company and
Bankers Trust Company, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Debt and the Holders of the
Securities and any coupons appertaining thereto and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The Securities are
issuable as Bearer Securities, with interest coupons attached, in the
denomination of U.S.$5,000, and as Registered Securities, without coupons, in
denominations of (a) U.S.$100,000 and integral multiples of U.S.$1,000 in
excess thereof if such Registered Securities are Restricted Securities; and (b)
U.S.$5,000 and integral multiples of U.S.$1,000 in excess thereof if such
Registered Securities are not Restricted Securities. As provided in the
Indenture and subject to certain limitations therein set forth,
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<PAGE> 56
Registered Securities are exchangeable for a like aggregate principal amount of
Registered Securities of any authorized denominations as requested by the
Holder surrendering the same upon surrender of the Registered Security or
Securities to be exchanged, at the Corporate Trust Office of the Trustee or at
such other office or agency of the Company as may be designated by it for such
purpose in The City of New York or at such other offices or agencies as the
Company may designate (each a "Transfer Agent"). The Transfer Agent will then
forward such surrendered Registered Securities (together with any payment
surrendered therewith) to the Trustee who in turn will issue the new Registered
Securities. Bearer Securities may not be issued in exchange for Registered
Securities.
No sinking fund is provided for the Securities. The Securities are
subject to redemption at the option of the Company on or after June 30, 1998,
in whole but not in part, upon not more than 60 nor less than 30 days' notice
to the Holders prior to the Redemption Date, at a Redemption Price equal to
100% of the principal amount plus accrued interest to the Redemption Date, and
Securities held by non-United States persons are also redeemable in whole but
not in part, in the circumstances described in the next two succeeding
paragraphs, at a Redemption Price equal to 100% of the principal amount plus
interest accrued to the Redemption Date; provided, however, that interest
installments on Registered Securities whose Stated Maturity is on or prior to
such Redemption Date will be payable to the Holders of such Securities, or one
or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture; provided further that payments of principal upon redemption of any
Security shall be made only upon delivery to the Company of a certification,
substantially in the form provided in Section 311(b) of the Indenture, by the
Holder as to whether the Security surrendered in connection with such
redemption is a "United States real property interest", as defined in the
United States Internal Revenue Code of 1986, as amended, with respect to the
beneficial owner of the Security being surrendered.
If as a result of a Tax Law Change, the Company has or will become
obligated to pay to the Holder of any Security or coupon Additional Amounts, as
described in the second paragraph of the face of this Security, and such
obligation cannot be avoided by the Company taking reasonable measures
available to it, then the Company may, at its option, redeem the Tax Affected
Securities as a whole, but not in part, upon not more than 60 nor less than 30
days' notice to the Holders prior to the Redemption Date, at a Redemption Price
equal to 100% of the principal amount plus interest accrued to the Redemption
Date, but without reduction for any applicable
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United States withholding taxes; provided, that (i) no such notice of
redemption shall be given earlier than 90 days prior to the earliest date on
which the Company would be obligated to pay any such Additional Amounts were a
payment in respect of the Tax Affected Securities then due and (ii) at the time
such notice of redemption is given, such obligation to pay such Additional
Amounts remains in effect. Prior to the publication of any notice of
redemption pursuant to this paragraph, the Company shall deliver to the Trustee
(a) an Officers' Certificate stating that the Company is entitled to effect
such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Company so to redeem have occurred and
(b) an Opinion of Counsel selected by the Company to the effect that the
Company has or will become obligated to pay such Additional Amounts as a result
of such change or amendment. The Company's right to redeem the Tax Affected
Securities shall continue as long as the Company is obligated to pay such
Additional Amounts, notwithstanding that the Company shall have made payments
of Additional Amounts specified in such second paragraph.
In addition, if the Company determines, based upon an Opinion of
Counsel, selected by the Company that, as a result of a Tax Law Change, any
payment made outside the United States by the Company or any of its Paying
Agents of the full amount of principal or interest due with respect to any
Bearer Security or coupon appertaining thereto would be subject to any
certification, identification or other information reporting requirement of any
kind, the effect of which requirement is the disclosure to the Company, any
Paying Agent or any governmental authority of the nationality, residence or
identity of a beneficial owner of such Bearer Security or coupon who is not a
United States person (other than such a requirement (a) which would not be
applicable to a payment made by the Company or any one of its Paying Agents (i)
directly to the beneficial owner or (ii) to any custodian, nominee or other
agent of the beneficial owner, (b) which can be satisfied by the custodian,
nominee or other agent certifying that such beneficial owner is not a United
States person, provided that, in each case referred to in clauses (a)(ii) and
(b), payment by such custodian, nominee or agent to such beneficial owner is
not otherwise subject to any such requirement, or (c) which would not be
applicable but for the fact that such Bearer Security constitutes a "United
States real property interest," as defined in Section 897(c)(1) of the United
States Internal Revenue Code of 1986, as amended, with respect to the
beneficial owner of such Bearer Security), the Company at its election will
either (x) redeem the Bearer Securities (including Registered Securities), as a
whole but not in part, upon not less than 30 nor more than 60 days' notice
prior to the Redemption Date, at a Redemption Price equal to 100% of the
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principal amount plus interest accrued to the Redemption Date, or (y) if and so
long as the conditions referred to in the second paragraph on the face hereof
are satisfied, pay the Additional Amounts specified in such paragraph. The
Company will make such determination and election and notify the Trustee
thereof in writing as soon as practicable, and the Trustee will promptly give
notice of such determination in the manner provided in the following paragraph
(the "Determination Notice"), in each case stating the effective date of such
certification, identification or information reporting requirement, whether the
Company will redeem the Securities or will pay the Additional Amounts specified
in the second paragraph on the face hereof and (if applicable) the last date by
which the redemption of the Securities must take place. If the Company elects
to redeem the Bearer Securities, such redemption shall take place on a date,
not later than one year after the publication of the Determination Notice, as
the Company elects by notice in writing to the Trustee at least 75 days before
the Redemption Date, unless shorter notice is acceptable to the Trustee.
Notwithstanding the foregoing, the Company will not so redeem the Securities if
the Company, based upon an Opinion of Counsel selected by the Company
subsequently determines, not less than 30 days prior to the Redemption Date,
that subsequent payments would not be subject to any such requirement, in which
case the Company will notify the Trustee in writing, and the Trustee will
promptly give notice to the Holders of the Bearer Securities of that
determination and any earlier redemption notice will thereupon be revoked and
of no further effect. If the Company elects as provided in clause (y) above to
pay Additional Amounts, the Company may, as long as the Company is obligated to
pay such Additional Amounts, subsequently redeem all the Bearer Securities, at
any time, as a whole but not in part, upon not less than 30 nor more than 60
days' notice prior to the Redemption Date, at a Redemption Price equal to 100%
of the principal amount plus interest accrued to the Redemption Date, but
without reduction for applicable United States withholding taxes with respect
to which the Company is obligated to pay Additional Amounts. In the event of a
redemption for such taxation reasons, the Company will not be required (a) to
register the transfer of or exchange Registered Debentures or to exchange
Bearer Debentures for Registered Debentures for a period of 15 days immediately
preceding the date notice is given identifying the serial numbers of the
Debentures called for such redemption, (b) to register the transfer of or
exchange any Registered Debenture, or portion thereof, called for redemption,
or (c) to exchange any Bearer Debenture called for redemption; provided,
however, that a Bearer Debenture called for redemption may be exchanged for a
Registered Debenture which is simultaneously surrendered to the Registrar or
Transfer Agent making such exchange with written
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instructions for payment consistent with the provisions described in Sections
205 and 1202 of the Indenture.
Notice of redemption will be given by publication in Authorized
Newspapers in the City of London, England, and, so long as the Securities are
listed on the Luxembourg Stock Exchange and the rules of such stock exchange
shall so require, in Luxembourg, or, if not practicable in either London,
England, or Luxembourg, elsewhere in any country in Western Europe, and by mail
to Holders of Registered Securities. Notice will be given at least once not
more than 60 nor less than 30 days prior to the Redemption Date as provided in
the Indenture.
In any case where the due date for the payment of the principal of or
interest, including Additional Amounts, on any Security or the last day on
which a Holder of a Security has a right to convert his Security shall be, at
any Place of Payment or Place of Conversion, as the case may be, a day on which
banking institutions at such Place of Payment or Place of Conversion are
authorized or obligated by law or executive order to close, then payment of
principal or interest, including Additional Amounts, or delivery for conversion
of such Security need not be made on or by such date at such place but may be
made on or by the next succeeding day at such place which is not a day on which
banking institutions are authorized or obligated by law or executive order to
close, with the same force and effect as if made on the date for such payment
or the date fixed for redemption, or by such last day for conversion, and no
interest shall accrue for the period after such date.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time after
September 11, 1995, and on or before the close of business on June 30, 2005, or
in case this Security is called for redemption or the Holder hereof has
exercised his right to require the Company to repurchase this Security, then in
respect of this Security until and including, but (unless the Company defaults
in making the payment due upon redemption or repurchase, as the case may be)
not after, the close of business on the Redemption Date or the fifth Trading
Day prior to the Repurchase Date, as the case may be, to convert this Security
(or any portion of the principal amount hereof that is U.S.$5,000 or any
integral multiple of U.S.$1,000 in excess thereof, provided the unconverted
portion of such principal amount is also U.S.$5,000 or any integral multiple of
U.S.$1,000 in excess thereof) into newly issued, fully paid and nonassessable
shares of Class A Common Stock of the Company at an initial Conversion Rate
equal to 30.888 shares of Class A Common Stock per U.S.$1,000 principal amount
of Securities (or at the current adjusted Conversion Rate if an
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adjustment has been made as provided in the Indenture) by surrender of this
Security, duly endorsed or assigned to the Company or in blank and, in case
such surrender shall be made during the period from the close of business of
any Regular Record Date next preceding any Interest Payment Date to the opening
of business on such Interest Payment Date (unless this Security or the portion
thereof being converted has been called for redemption on a Redemption Date, or
is to be repurchased on a Repurchase Date, that occurs within such period),
also accompanied by payment in New York Clearing House or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Security then being
converted (or, if this Security was issued in exchange for a Bearer Security
after the close of business on such Regular Record Date, by surrender of one or
more coupons relating to such Interest Payment Date or by both payment in such
funds and surrender of such coupon or coupons, in either case, in an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of this Security then being converted), and also the conversion notice
hereon duly executed, to the Company at the Corporate Trust Office of the
Trustee, or at such other office or agency of the Company as may be designated
by it for such purpose in The City of New York, or at such other offices or
agencies as the Company may designate (each a "Conversion Agent"). Subject to
the aforesaid requirement for payment and, in the case of a conversion after
the Regular Record Date next preceding any Interest Payment Date and on or
before such Interest Payment Date, to the right of the Holder of this Security
(or any Predecessor Security) of record at such Regular Record Date to receive
an installment of interest (with certain exceptions provided in the Indenture),
no cash payment or adjustment is to be made on conversion if the date of
conversion is not an Interest Payment Date, for interest accrued hereon from
the Interest Payment Date next preceding the date of conversion, or for
dividends on the Class A Common Stock issued on conversion hereof. The Company
shall thereafter deliver to the Holder the fixed number of shares of Class A
Common Stock (together with any cash adjustment, as provided in the Indenture)
into which this Security is convertible and such delivery will be deemed to
satisfy the Company's obligation to pay the principal amount of this Security.
The Conversion Rate will not be adjusted at any time during the term of this
Security for dividends on the Class A Common Stock issued on conversion. No
fractions of shares or scrip representing fractions of shares will be issued on
conversion, but instead of any fractional interest (calculated to the nearest
1/100th of a share) the Company shall pay a cash adjustment as provided in the
Indenture. The Conversion Rate is subject to adjustment as provided in the
Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a
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party or the conveyance, transfer, sale or lease of all or substantially all of
the property and assets of the Company, the Indenture shall be amended, without
the consent of any Holders of Securities, so that this Security, if then
Outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, transfer, sale or lease by a holder of the number of shares of
Class A Common Stock of the Company into which this Security could have been
converted immediately prior to such consolidation, merger, conveyance,
transfer, sale or lease (assuming such holder of Class A Common Stock is not a
Constituent Person, failed to exercise any rights of election and received per
share the kind and amount received per share by a plurality of Non-electing
Shares). No adjustment in the Conversion Rate will be made until such
adjustment would require an increase or decrease of at least one percent of
such rate, provided that any adjustment that would otherwise be made will be
carried forward and taken into account in the computation of any subsequent
adjustment.
If a Risk Event (as defined in the Indenture) occurs, the Holder of
this Security shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion
of the principal amount hereof equal to U.S.$5,000 or any integral multiple of
$1,000 in excess thereof, provided the unrepurchased portion of such principal
amount is U.S.$5,000 or any integral multiple of $1,000 in excess thereof) for
cash at a Repurchase Price equal to 100% of the principal amount plus interest
accrued to the Repurchase Date; provided, however, that payments of principal
upon repurchase shall be made only upon delivery to the Company of a
certification, substantially in the form provided in Section 311(b) of the
Indenture, by the Holder as to whether the Security surrendered in connection
with such repurchase is a "United States real property interest", as defined in
the United States Internal Revenue Code of 1986, as amended, with respect to
the beneficial owner of the Security being surrendered. Whenever in this
Security there is a reference, in any context, to the principal of any Security
as of any time, such reference shall be deemed to include reference to the
Repurchase Price payable in respect of such Security to the extent that such
Repurchase Price is, was or would be so payable at such time, and express
mention of the Repurchase Price in any provision of this Security shall not be
construed as excluding the Repurchase Price in those provisions of this
Security when such express mention is not made.
In the event of redemption, repurchase or conversion of this Security
in part only, a new Registered Security or
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Securities for the unredeemed, unrepurchased or unconverted portion hereof will
be issued in the name of the Holder hereof.
Subject to certain limitations in the Indenture, at any time when the
Company is not subject to Section 13 or 15(d) of the United States Securities
Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted
Security or the holder of shares of Class A Common Stock issued upon conversion
thereof, the Company will promptly furnish or cause to be furnished Rule 144A
Information (as defined below) to such Holder of Restricted Securities or such
holder of shares of Class A Common Stock issued upon conversion of Restricted
Securities, or to a prospective purchaser of any such security designated by
any such Holder or holder, as the case may be, to the extent required to permit
compliance by such Holder or holder with Rule 144A under the Securities Act of
1933, as amended (the "Securities Act"), in connection with the resale of any
such security. "Rule 144A Information" shall be such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto).
The indebtedness evidenced by this Security is, to the extent and in
the manner provided in Article Thirteen of the Indenture, subordinate and
subject in right of payment to the prior payment in full of all amounts then
due on all Senior Debt of the Company, and this Security is issued subject to
such provisions of Article Thirteen of the Indenture with respect thereto.
Each Holder of this Security, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee on his behalf
to take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.
If an Event of Default shall occur and be continuing, the principal (in
the amount specified in the next sentence) of all the Securities, together with
accrued interest to the date of declaration, may be declared due and payable in
the manner and with the effect provided in the Indenture. Upon payment (i) of
the amount of principal so declared due and payable, together with accrued
interest to the date of declaration, and (ii) of interest on any overdue
principal and overdue interest, all of the Company's obligations in respect of
the payment of the principal of and interest on the Securities shall terminate.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities and coupons under the
Indenture at any time by the Company and the Trustee with either (a) the
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written consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding, or (b) by the adoption of a resolution, at
a meeting of Holders of the Outstanding Securities at which a quorum is
present, by the Holders of 66 2/3% in principal amount of the Outstanding
Securities represented, and entitled to vote at such meeting. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities and coupons, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security or such other Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee
or for any other remedy thereunder, unless such Holder shall have previously
given the Trustee written notice of a continuing Event of Default, the Holders
of not less than 25% in principal amount of the Outstanding Securities shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity
and the Trustee shall not have received from the Holders of a majority in
principal amount of the Securities Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or interest hereon
(including any Additional Amounts) on or after the respective due dates
expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest (including
Additional Amounts, as described on the face hereof) on this Security at the
times, places and rate, and in the coin or currency, herein prescribed or to
convert this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of Registered Securities is registrable on the Security
Register upon surrender of a Registered Security for registration of transfer
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<PAGE> 64
(a) at the Corporate Trust Office of the Trustee or at such other officer or
agency of the Company as may be designated by it for such purpose in The City
of New York, or (b) subject to any laws or regulations applicable thereto and
to the right of the Company to terminate the appointment of any Transfer Agent,
at the offices of the Transfer Agents described herein or at such other offices
or agencies as the Company may designate, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing, and thereupon one or more new Registered Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees by the Registrar. No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sun sufficient to recover any tax or
other governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of a Bearer Security and any coupon appertaining thereto,
and prior to due presentation of a Registered Security for registration of
transfer the Person in whose name a Registered Security is registered, as the
owner thereof for all purposes, whether or not such Security or coupon be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
THE INDENTURE, THE SECURITIES AND ANY COUPONS APPERTAINING THERETO
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, UNITED STATES OF AMERICA.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 1401 of the Indenture, the undersigned hereby
elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or Paying Agent to pay
it or __________________ an amount in cash
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equal to 100% of the principal amount hereof plus interest accrued to the
Repurchase Date.
Dated: _______________________ ________________________
Signature
________________________
Signature Guaranteed:
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
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<PAGE> 66
(c) Form of Temporary Global Bearer Security
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
ALBERTO-CULVER COMPANY
5 1/2% CONVERTIBLE SUBORDINATED DEBENTURES
DUE JUNE 30, 2005
TEMPORARY GLOBAL SECURITY
ISIN NO. XS 005 838 4016
ALBERTO-CULVER COMPANY, a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to bearer upon presentation and
surrender of this Temporary Global Bearer Security the principal sum of
Forty-Six Million, Seven Hundred Thousand United States Dollars
(U.S.$46,700,000) on June 30, 2005, and to pay interest thereon, from July 13,
1995, or from the most recent Interest Payment Date (as defined below) to which
interest has been paid or duly provided for, semi-annually in arrears on June
30 and December 31 in each year (the "Interest Payment Date"), commencing
December 31, 1995, at the rate of 5 1/2% per annum, until the principal hereof
is due and at the rate of 5 1/2% per annum on any overdue principal and, to the
extent permitted by law, on any overdue interest; provided, however, that
interest on this Temporary Global Bearer Security shall be payable only after
the issuance of the Definitive Securities in bearer form for which this
Temporary Global Bearer Security is exchangeable and, in the case of Definitive
Securities in bearer form, only upon presentation and surrender (at an office
or agency outside the United States, except as otherwise provided in the
Indenture referred to below) of the interest coupons thereto attached as they
severally mature.
This Temporary Global Bearer Security is one of a duly authorized issue
of Securities of the Company designated as specified in the title hereof,
issued and to be issued under the Indenture, dated as of June 30, 1995 (herein
called the "Indenture"), between the Company and Bankers Trust Company, as
Trustee. This Temporary Global Bearer Security is a temporary security and is
exchangeable in whole or from time to time in part without charge upon request
of the Holder hereof for
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<PAGE> 67
definitive Securities in bearer form, with interest coupons attached, of
authorized denominations, (a) not earlier than 40 days after the date hereof
and (b) as promptly as practicable following presentation of certification, in
one of the forms set forth in the Indenture for such purpose, that the
beneficial owner or owners of this Temporary Global Bearer Security (or, if
such exchange is only for a part of this Temporary Global Bearer Security, of
such part) are not United States persons, are persons described in Section
1.163-5(c)(2)(i)(D)(6) of the United States Treasury Regulations or are
financial institutions that have purchased such Security for resale and that
have purchased such Security in accordance with the limitations set forth in
the Underwriting Agreement. Definitive Securities in bearer form to be
delivered in exchange for any part of this Temporary Global Bearer Security
shall be delivered only outside the United States. Upon any exchange of a part
of this Temporary Global Bearer Security for Definitive Securities, the portion
of the principal amount hereof so exchanged shall be endorsed by the Principal
Paying Agent or its agent on the Schedule hereto, and the principal amount
hereof shall be reduced for all purposes by the amount so exchanged.
Until exchanged in full for Definitive Securities, this Temporary
Global Bearer Security shall in all respects be entitled to the same benefits
under, and subject to the same terms and conditions of, the Indenture as Bearer
Securities authenticated and delivered thereunder, except that neither the
Holder hereof nor the beneficial owners of this Temporary Global Bearer
Security shall be entitled to receive payment of interest or other payments
hereon or to convert this Temporary Global Bearer Security into Class A Common
Stock of the Company or any other security, cash or other property.
THIS TEMPORARY GLOBAL BEARER SECURITY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES
OF AMERICA.
All terms used in this Temporary Global Bearer Security which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee or its agent by the manual signature of one of its authorized
signatories, this Temporary
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<PAGE> 68
Global Bearer Security shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Temporary Global Bearer
Security to be duly executed under its corporate seal.
Dated as of June 30, 1995
ALBERTO-CULVER COMPANY
By:___________________________
Title:
[Corporate Seal]
Attest:
____________________________
Title:
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<PAGE> 69
SCHEDULE OF EXCHANGES
<TABLE>
<CAPTION>
Principal Amount Remaining Notation Made
Exchanged for Principal on Behalf of
Date Bearer Amount Following Principal
Made Securities Such Exchange Paying Agent
---- ---------------- --------------- -------------
<S> <C> <C> <C>
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
____ ____________ ___________ _____________
</TABLE>
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<PAGE> 70
SECTION 203. Form of Coupon.
[FORM OF FACE]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.
NO.- _______________
ISIN NO. _______________
ALBERTO-CULVER COMPANY U.S.$ _______
DUE ________ __, ____
5 1/2% CONVERTIBLE SUBORDINATED DEBENTURE
DUE JUNE 30, 2005
Unless the Security to which this coupon appertains shall have been
redeemed, repurchased or converted prior to the date set forth hereon,
Alberto-Culver Company (the "Company") shall, subject to and in accordance with
the terms and conditions of such Security and the Indenture referred to
therein, pay to the bearer on the date set forth hereon, upon surrender hereof,
the amount shown hereon (together with any Additional Amounts in respect
thereof which the Company may be required to pay according to the terms of said
Security) at the paying agencies set out on the reverse hereof or at such other
places outside the United States of America (including the States and the
District of Columbia), its territories, its possessions and other areas subject
to its jurisdiction as the Company may determine from time to time.
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<PAGE> 71
[REVERSE OF COUPON]
TRANSFER, PAYING AND CONVERSION AGENTS
Bankers Trust Company, Bankers Trust Luxembourg, S.A.
1 Appold Street, 14 Boulevard F.D. Roosevelt,
Broadgate, London L-2450 Luxembourg,
EC2A 2HE, England Grand Duchy of Luxembourg
PAYING AGENT
Swiss Bank Corporation,
Paradeplatz 6
CH-8010 Zurich, Switzerland
SECTION 204. Form of Certificate of
Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
[BANKERS TRUST COMPANY,
as Trustee [or its Authenticating
Agent]*
By:___________________________
Authorized Signatory]
*For the Temporary Global Bearer Security.
SECTION 205. Form of Conversion Notice.
CONVERSION NOTICE
(a) For Bearer Securities:
The undersigned Holder of this Security hereby irrevocably exercises
the option to convert this Security into shares of Class A Common Stock in
accordance with the terms of the Indenture referred to in this Security and
directs that such shares be registered in the name of and delivered, together
with a check in payment for any fractional share, to the undersigned unless a
different name has been indicated below. The address for payment of any such
check must be outside the United States. If shares are to be registered in
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<PAGE> 72
the name of a Person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto.
The undersigned Holder of this Security understands that the Company may
be required by Section 1445 of the United States Internal Revenue Code of 1986,
as amended, to withhold ten percent of the fair market value of the shares of
stock and cash into which this Security is convertible if this Security
constitutes a "United States real property interest", as such term is defined
in United States Temporary Treasury Regulations Section 1.897-9T(b) or
applicable successor regulations, in the hands of the beneficial owner of this
Security if such beneficial owner is not a United States person, as such term
is defined in Section 7701 of the United States Internal Revenue Code of 1986,
as amended. In order to inform the Company whether withholding is required
upon the conversion of this Security, the undersigned Holder, for itself and on
behalf of the beneficial owner of this Security, hereby certifies as follows:
[ ] This Security constitutes a United States real property interest,
as above defined, in the hands of its beneficial owner;
[ ] This Security does not constitute a United States real property
interest, as above defined, in the hands of its beneficial owner;
[ ] The beneficial owner of this Security is a United States person,
as above defined, whose name, address and taxpayer identification
number are as follows:
____________________________
____________________________
____________________________
No shares of Class A Common Stock and no check in payment for any
fractional share will be delivered to the Holder or any other Person with
respect to the conversion of this Security unless one, but only one, of the
above boxes is marked.
Dated: ___________________ _________________________
Signature
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<PAGE> 73
If shares are to be registered HOLDER
in the name of and delivered
to a Person other than the
Holder, please print such Please print name and
Person's name and address: address of Holder:
___________________________ _________________________
Name Name
___________________________ _________________________
Address Address
___________________________ _________________________
___________________________ _________________________
Social Security or other Social Security or other
Taxpayer Identification Taxpayer Identification
Number, if any Number, if any
Name and address (outside the
United States) to where any
check referred to in the first
paragraph of this Conversion
Notice should be mailed:
___________________________
Name
___________________________
Address
___________________________
Social Security or other
Taxpayer Identification
Number, if any
_______________________________ Signature Guaranteed
(b) For Registered Securities:
The undersigned Holder of this Security hereby irrevocably exercises
the option to convert this Security, or any portion of the principal amount
hereof (which is U.S.$5,000 or any integral multiple of U.S.$1,000 in excess
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<PAGE> 74
thereof, provided the unconverted portion of such principal amount is also
U.S.$5,000 or any integral multiple of U.S.$1,000 in excess thereof) below
designated, into shares of Class A Common Stock in accordance with the terms of
the Indenture referred to in this Security, (to the extent required by Section
1202) delivers herewith the amount of interest payable on the next Interest
Payment Date if this conversion is made between the Regular Record Date for
such Interest Payment Date and such Interest Payment Date and directs that such
shares, together with a check in payment for any fractional share and any
Securities representing any unconverted principal amount hereof, be delivered
to and be registered in the name of the undersigned unless a different name has
been indicated below. If shares of Class A Common Stock or Securities are to
be registered in the name of a Person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto and, if
this Security is a Restricted Security as defined in the Indenture, the
undersigned is delivering herewith a certificate in proper form certifying that
the applicable restrictions on transfer have been complied with.
The undersigned Holder of this Security understands that the Company may
be required by Section 1445 of the United States Internal Revenue Code of 1986,
as amended, to withhold ten percent of the fair market value of the shares of
stock and cash into which this Security is convertible if this Security
constitutes a "United States real property interest", as such term is defined
in United States Temporary Treasury Regulations Section 1.897-9T(b) or
applicable successor regulations, in the hands of the beneficial owner of this
Security if such beneficial owner is not a United States person, as such term
is defined in Section 7701 of the United States Internal Revenue Code of 1986,
as amended. In order to inform the Company whether withholding is required
upon the conversion of this Security, the undersigned Holder, for itself and on
behalf of the beneficial owner of this Security, hereby certifies as follows:
[ ] This Security constitutes a United States real property interest,
as above defined, in the hands of its beneficial owner;
[ ] This Security does not constitute a United States real property
interest, as above defined, in the hands of its beneficial owner;
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<PAGE> 75
[ ] The beneficial owner of this Security is a United States person,
as above defined, whose name, address and taxpayer identification
number are as follows:
____________________________
____________________________
____________________________
No shares of Class A Common Stock and no check in payment for any
fractional share will be delivered to the Holder or any other Person with
respect to the conversion of this Security unless one, but only one, of the
above boxes is marked.
Dated: _____________________ ____________________
Signature
<TABLE>
<S> <C>
If shares or Registered Securities are to be If only a portion of the Securities is to be
registered in the name of a Person other than converted, please indicate:
the Holder, please print such Person's name and
address:
1. Principal amount to be converted:
U.S.$_________
_________________________________
Name 2. Principal amount and denomination of
Registered Securities representing
unconverted principal amount to be
issued:
_________________________________
Address
Amount: U.S.$________
Denominations:
_________________________________ U.S.$______
Social Security or other Taxpayer (U.S.$5,000 or any integral multiple of
Identification Number, if any U.S.$1,000 in excess thereof)
___________________________________ [Signature Guaranteed]
</TABLE>
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<PAGE> 76
SECTION 206. Legend on Restricted Securities.
During the period beginning on the Closing Date and ending on the date
three years from the Closing Date, all Securities originally issued in the
United States in accordance with Rule 144A under the Securities Act, which
shall be Registered Securities, and all Registered Securities issued pursuant
to Section 305 or 306 in respect of such Registered Securities originally
issued in the United States shall be deemed "Restricted Securities" and shall
be subject to the restrictions on transfer provided in the legend set forth on
the face of the form of Registered Security in Section 202(b); provided,
however, that the term "Restricted Securities" shall not include Registered
Securities as to which restrictions have been terminated in accordance with
Section 305. All Restricted Securities shall bear the applicable legend set
forth on the face of the form of Registered Security in Section 202(b).
Securities which are not Restricted Securities shall not bear such legend. The
Trustee shall not issue any unlegended Registered Security until it has
received an Officers' Certificate from the Company directing it to do so.
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<PAGE> 77
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to U.S.$100,000,000, except for
Securities authenticated and delivered in exchange for, or in lieu of, other
Securities pursuant to Section 304, 305, 306 or 805.
The Securities shall be known and designated as the "5 1/2% Convertible
Subordinated Debentures due June 30, 2005" of the Company. Their Stated
Maturity shall be June 30, 2005 and they shall bear interest on their principal
amount from July 13, 1995, payable semi-annually in arrears on June 30 and
December 31 in each year, commencing December 31, 1995, at the rate of 5 1/2%
per annum until the principal thereof is due and at the rate of 5 1/2% per
annum on any overdue principal and, to the extent permitted by law, on any
overdue interest; provided, however, that payments shall only be made on
Business Days as provided in Section 111.
The principal of and interest on the Securities shall be payable as
provided in the forms of Securities set forth in Sections 202 and 203 (any city
in which any Paying Agent is located being herein called a "Place of Payment").
The Securities shall be redeemable at the option of the Company at any
time after June 30, 1998, in whole but not in part, and at the Company's option
upon the occurrence of certain events affecting United States taxation, as
provided in Article Eleven and in the forms of Securities set forth in Section
202.
The Securities shall be convertible as provided in Article Twelve (any
city in which any Conversion Agent is located being herein called a "Place of
Conversion").
The Securities shall be subordinated in right of payment to Senior Debt
of the Company as provided in Article Thirteen.
The Securities shall be subject to repurchase by the Company at the
option of the Holders as provided in Article Fourteen.
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<PAGE> 78
SECTION 302. Denominations.
The Definitive Securities shall be issuable (i) in bearer form, with
interest coupons attached, in the denomination of U.S.$5,000 and (ii) as
Registered Securities, without coupons, in denominations of U.S.$5,000 and
integral multiples of U.S.$1,000 in excess thereof (U.S.$100,000 and integral
multiples of U.S.$1,000 in excess thereof if such Registered Security is a
Restricted Security (other than a Restricted Security issued in connection with
a partial conversion or repurchase of a Restricted Security)).
SECTION 303. Execution, Authentication,
Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its President or one of its Vice Presidents, under a facsimile of its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. Any such signature may be manual or facsimile.
Securities bearing the manual or facsimile signature of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee or to its Order for authentication (or to the Principal Paying
Agent, in the case of Bearer Securities or the Temporary Global Bearer
Security), together with a Company Order for the authentication and delivery of
such Securities, and the Trustee or an Authenticating Agent in accordance with
such Company Order shall authenticate and deliver such Securities as in this
Indenture provided and not otherwise. In connection with any Company Order for
authentication, a compliance certificate and Opinion of Counsel pursuant to
Section 102 shall not be required.
Each Bearer Security and the Temporary Global Bearer Security shall be
dated as of June 30, 1995. Each Registered Security shall be dated the date of
its authentication.
No Security (or coupon attached thereto) shall be entitled to any
benefit under this Indenture or be valid or
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<PAGE> 79
obligatory for any purpose unless there appears on such Security a certificate
of authentication substantially in the form provided for herein executed
by the Trustee or an Authenticating Agent by manual signature of an authorized
signatory, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder. Except as permitted by Section 304 or 306, neither the
Trustee nor an Authenticating Agent shall authenticate and deliver any Bearer
Security unless all coupons appurtenant thereto for interest then matured have
been detached and canceled.
SECTION 304. Global Securities.
(a) The Securities (other than the Restricted Securities)
shall be issued initially in the form of one Temporary Global Bearer Security,
which Temporary Global Bearer Security shall be deposited on behalf of the
subscribers for the Securities represented thereby with Bankers Trust
Company, London Office, as common depositary (the "Common Depositary"), for
credit to their respective accounts (or to such other accounts as they may
direct) at MORGAN GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS OFFICE, as
operator of the EUROCLEAR CLEARANCE SYSTEM ("EUROCLEAR"), or CEDEL BANK
SOCIETE ANONYME ("CEDEL").
On or before the Exchange Date, the Company shall deliver to
the Principal Paying Agent at its principal London office located at 1 Appold
Street, Broadgate, London EC2A, England, or its designated agent, Bearer
Securities executed by the Company. On or after the Exchange Date, the
Temporary Global Bearer Security shall be surrendered by the Common Depositary
to the Trustee or its agent, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for Bearer Securities
without charge to Holders, and the Trustee or the Principal Paying Agent
shall authenticate and deliver (at an office or agency outside the United
States), in exchange for the Temporary Global Bearer Security or the portions
thereof to be exchanged, an equal aggregate principal amount of Bearer
Securities, as shall be specified by the beneficial owners thereof;
provided, however, that upon such presentation by the Common Depositary, the
Temporary Global Bearer Security is accompanied by a certificate dated the
Exchange Date or a subsequent date and signed by EUROCLEAR as to the portion
of the Temporary Global Bearer Security held for its account then to be
exchanged and a certificate dated the Exchange Date or a subsequent date and
signed by CEDEL as to the portion of the Temporary Global Bearer Security
held for its account then to be exchanged, each to the effect hereinafter
provided. The Company hereby
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<PAGE> 80
appoints the principal office of the Principal Paying Agent in London, England,
or its designated agent, as its agent outside the United States where Bearer
Securities may be delivered in exchange for the Temporary Global Bearer
Security or portions thereof. Each beneficial owner of any portion of the
Temporary Global Bearer Security shall be entitled to take delivery of
Bearer Securities only at such office. Notwithstanding any other provision
hereof or of the Securities, no Security initially represented by the Temporary
Global Bearer Security will be mailed to or otherwise delivered in connection
with its original issuance to any location within the United States. The
Trustee agrees that it will cause the Principal Paying Agent to retain each
certificate provided by EUROCLEAR or CEDEL for a period of four calendar
years following the year in which the certificate is received and not to
destroy or otherwise dispose of any such certificate without first offering to
deliver it to the Company.
Each certificate to be provided by EUROCLEAR and CEDEL shall
be substantially to the following effect or with such changes therein as
shall be approved by the Company and Goldman Sachs International and be
satisfactory to the Trustee:
"CERTIFICATE
ALBERTO-CULVER COMPANY
5 1/2% CONVERTIBLE SUBORDINATED DEBENTURES
DUE JUNE 30, 2005
This is to certify that, based on certificates we have
received from our member organizations substantially in the form set out in
Section 311(a) of the Indenture relating to the above-captioned Securities,
as of the date hereof, U.S.$_____________ principal amount of the
above-captioned Securities acquired from Alberto-Culver Company (i) is owned
by persons that are not United States persons (as defined below), (ii) is
owned by United States persons that are (a) foreign branches of United
States financial institutions (as defined in United States Treasury
Regulations Section 1.165-12(c)(1)(v) ("financial institutions")) purchasing
for their own account or for resale or (b) United States persons who acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such financial institutions on the date
hereof (and in the case of either clause (a) or (b), each financial
institution has agreed for the benefit of Alberto-Culver Company to comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of the United States
Internal Revenue
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Code of 1986, as amended, and the regulations thereunder) or (iii) is
owned by financial institutions for purposes of resale during the
restricted period (as defined in United States Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)). Financial institutions described in clause
(iii) of the preceding sentence (whether or not also described in clause (i)
or (ii)) have certified that they have not acquired the Securities for
purposes of resale directly or indirectly to United States persons or to
persons within the United States or its possessions.
As used in this Certificate, "United States persons" means
a citizen or resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the United States or
any political subdivision thereof or an estate or trust the income of which is
subject to United States Federal income taxation regardless of its source;
"United States" means the United States of America (including the States and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction; and its "possessions" include Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands.
We further certify that (i) we are not making available
herewith for exchange any portion of the Temporary Global Bearer Security
excepted in such certificates and (ii) as of the date hereof, we have
not received any notification from any of our member organizations to the
effect that the statements made by such member organizations with respect to
any portion of the part submitted herewith for exchange are no longer true and
cannot be relied upon as of the date hereof.
We understand that this certificate is required in
connection with certain tax laws of the United States. In connection
therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certificate is or would be
relevant, we irrevocably authorize you to produce this certificate to any
interested party in such proceedings. We agree to retain each statement
provided by a member organization for a period of four calendar years following
the year in which the statement is received.
Dated: ________, 19__*
*To be dated no
earlier than the
Exchange Date.
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[MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
BRUSSELS OFFICE, AS OPERATOR
OF THE EUROCLEAR CLEARANCE
SYSTEM]
[CEDEL BANK SOCIETE ANONYME]
By __________________________"
Each certificate received by EUROCLEAR and CEDEL from
Persons appearing in their records as Persons entitled to a portion of the
Temporary Global Bearer Security shall be substantially to the effect set forth
in Section 311(a).
Upon any such exchange of a portion of the Temporary Global
Bearer Security for Bearer Securities, the Temporary Global Bearer Security
shall be endorsed to reflect the reduction of the principal amount evidenced
thereby. Until so exchanged in full, the Temporary Global Bearer Security
shall in all respects be entitled to the same benefits under, and subject to
the same terms and conditions of, this Indenture as Bearer Securities
authenticated and delivered hereunder, except that none of EUROCLEAR, CEDEL
or the beneficial owners of the Temporary Global Bearer Security shall be
entitled to receive payment of interest or other payments thereon or to
convert the Temporary Global Bearer Security, or any portion thereof, into
Class A Common Stock of the Company or any other security, cash or other
property.
Bearer Securities shall be exchangeable for Registered
Securities as provided in Section 305.
(b) The Restricted Securities shall be issued initially in
the form of a Restricted Global Registered Security. Unless an event
described in the next paragraph shall have occurred, Registered Securities
issued in exchange for Bearer Securities as provided in Section 305 shall be
issued in the form of interests in a Global Registered Security. The
Depositary or its nominee shall be the Holder of the Global Registered
Securities, and owners of beneficial interests in the Securities represented
by the Global Registered Securities shall hold such interests pursuant to the
procedures and practices of the Depositary. Any such owners's beneficial
ownership of any such Securities will be shown only on, and the transfer of
such ownership interest shall be effected only through, records maintained
by the Depositary or its nominee. Transfer of interests in the Global
Registered Securities shall be subject to the provisions of Section 305(b).
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Unless (A) the Depositary notifies the Company that it is
unwilling or unable to continue as depositary for a Global Registered
Security or ceases to be a "Clearing Agency" registered under the Exchange
Act or announces an intention permanently to cease business or does in fact
do so, or (B) an Event of Default has occurred and is continuing with respect
to a Global Registered Security, owners of beneficial interests in a Global
Registered Security will not be entitled to have any portions of such Global
Registered Security registered in their names, will not receive or be
entitled to receive physical delivery of Registered Securities in definitive
form and will not be considered the owners or holders of the Global
Registered Security. Any Global Registered Security exchanged upon the
occurrence of an event described in Clause (A) of the preceding sentence shall
be so exchanged in whole and not in part and any Global Registered Security
exchanged upon the occurrence of an event described in Clause (B) of the
preceding sentence may be exchanged in whole or from time to time in part as
directed by the U.S. Depositary. Any Registered Security issued in exchange
for a Global Registered Security or any portion thereof shall be a Global
Registered Security, provided that any such Registered Security so issued that
is registered in the name of a Person other than the U.S. Depositary or a
nominee thereof shall not be a Global Registered Security.
Registered Securities issued in exchange for a Global
Registered Security or any portion thereof pursuant to the preceding
paragraph above shall be issued in definitive, fully registered form, without
interest coupons, shall have an aggregate principal amount equal to that of
such Global Registered Security or portion thereof to be so exchanged, shall
be registered in such names and be in such authorized denominations as the
Depositary shall designate and shall bear any legends required hereunder. Any
Global Registered Security to be exchanged in whole shall be surrendered by
the Depositary to the Trustee, as Security Registrar. With regard to any
Global Registered Security to be exchanged in part, either such Global
Registered Security shall be so surrendered for exchange or, if the Trustee
is acting as custodian for the Depositary or its nominee with respect to
such Global Registered Security, the principal amount thereof shall be
reduced, by an amount equal to the portion thereof to be so exchanged, by
means of an appropriate adjustment made on the records of the Trustee.
Upon any such surrender or adjustment, the Trustee shall authenticate and
deliver the Registered Security issuable on such exchange to or upon the
order of the Depositary or an authorized representative thereof. In the
event of the occurrence of any of the events specified in the preceding
paragraph, the Company will
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promptly make available to the Trustee a reasonable supply of certificated
Registered Securities in definitive form.
Except as otherwise set forth in the Indenture or a
Global Registered Security, owners of beneficial interests in the
Securities evidenced by a Global Registered Security will not be entitled
to any rights under the Indenture with respect to such Global Registered
Security, and the Depositary or its nominee may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the owner and
Holder of such Global Registered Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any such agent from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or its nominee or
impair, as between the Depositary or its nominee and such owners of
beneficial interests, the operation of customary practices governing the
exercise of the rights of the Depositary or its nominee as Holder of any
Security.
The Depositary shall be a clearing agency registered under
the Exchange Act. Initially, any and all Global Registered Securities
issued hereunder shall be issued to the Depositary, registered in the name
of Cede & Co., as the nominee of the Depositary, and deposited with the
Trustee, as custodian for Cede & Co.
SECTION 305. Registration, Registration of Transfer and
Exchange; Restrictions on Transfer.
(a) The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register maintained in such
office and in any other office or agency of the Company designated pursuant
to Section 1002 being herein sometimes collectively referred to as the
"Security Register") in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration of
Registered Securities and of transfers of Registered Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Registered Securities and transfers and exchanges of Registered Securities as
herein provided.
Upon surrender for registration of transfer of any
Registered Security at an office or agency of the Company designated
pursuant to Section 1002 for such purpose, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Registered Securities of any
authorized denominations and of a like aggregate principal
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amount and bearing such restrictive legends as may be required by this
Indenture (including Section 206).
At the option of the Holder, and subject to the other
provisions of this Section 305, Registered Securities may be exchanged for
other Registered Securities of any authorized denominations and of a like
aggregate principal amount, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any Registered Securities
are so surrendered for exchange, and subject to the other provisions of this
Section 305, the Company shall execute, and the Trustee shall authenticate
and deliver, the Securities which the Holder making the exchange is entitled
to receive. Every Registered Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the
Company or the Security Registrar) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.
Bearer Securities may not be issued in exchange for Registered
Securities.
At the option of the Holder, upon written request, Bearer
Securities may be exchanged for Registered Securities, of any authorized
denominations and of a like aggregate principal amount, upon surrender of
the Bearer Securities to be exchanged at any office or agency outside the
United States designated pursuant to Section 1002, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the
Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, such exchange may be
effected if such Bearer Security is accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon
or coupons or the surrender of such missing coupon or coupons may be waived
by the Company, the Trustee, and the Principal Paying Agent, if there is
furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such
Bearer Security shall surrender to any Paying Agent outside the United States
any such missing coupon in respect of which such a payment shall have been
made, such Holder shall be entitled to receive the amount of such payment;
provided, however, that, except as otherwise provided in the form of Bearer
Security set forth in Section 202(a), interest represented by coupons shall be
payable only upon presentation and surrender of such coupons at an office
or agency of the Company outside the United States. Notwithstanding the
foregoing, in case a Bearer Security is surrendered in
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exchange for a Registered Security at an office or agency of the Company
outside the United States designated pursuant to Section 1002 after the
close of business at such office or agency on (i) any Regular Record Date and
before the opening of business at such office or agency on the next
succeeding Interest Payment Date, or (ii) any Special Record Date and before
the opening of business at such office or agency on the related date for
payment of Defaulted Interest, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date or proposed date of
payment, as the case may be, and interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or such
related date for payment of Defaulted Interest, as the case may be, in respect
of the Registered Security issued in exchange for such Bearer Security, but
will be payable only to the Holder of such coupon when due in accordance with
the provisions of this Indenture.
Whenever any Bearer Securities are so surrendered for
exchange, subject to the other provisions of this Section 305, the Company
shall execute, and the Trustee shall authenticate and deliver, the
Registered Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and subject to the other provisions of this Section
305, entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304 or 1202 (other than,
in the case of Registered Securities, where the shares of Class A Common Stock
are to be issued or delivered in a name other than that of the Holder of the
Registered Security) not involving any transfer.
In the event of a redemption for taxation reasons as provided
in the Forms of Securities set forth in Section 202, the Company will not be
required (a) to register the transfer of or exchange Registered Debentures
or to exchange Bearer Debentures for Registered Debentures for a period of
15 days immediately preceding the date notice is given identifying the serial
numbers of the Debentures called for such redemption, (b) to register the
transfer of or exchange any Registered Debenture, or portion thereof, called
for redemption, or (c)
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to exchange any Bearer Debenture called for redemption; provided, however, that
a Bearer Debenture called for redemption may be exchanged for a Registered
Debenture which is simultaneously surrendered to the Registrar or Transfer
Agent making such exchange with written instructions for payment consistent
with the provisions described in Sections 205 and 1202.
(b) Beneficial ownership of every Restricted Security shall
be subject to the restrictions on transfer provided in the legend required to
be set forth on the face of each Restricted Security pursuant to Section 206,
unless such restrictions on transfer shall be waived by the written consent of
the Company, and the Holder of each Restricted Security, by such Holder's
acceptance thereof, agrees to be bound by such restrictions on transfer.
Whenever any Restricted Security is presented or surrendered for registration
of transfer or for exchange for a Registered Security registered in a name
other than that of the Holder, such Restricted Security must be accompanied
by a certificate in substantially the form set forth in Section 311(c), dated
the date of such surrender and signed by the Holder of such Restricted
Security, as to compliance with such restrictions on transfer. Neither the
Security Registrar nor any Transfer Agent shall be required to accept for
such registration of transfer or exchange any Restricted Security not so
accompanied by a properly completed certificate.
The restrictions imposed by this Section 305 and Section 206
upon the transferability of any particular Restricted Security shall cease
and terminate upon delivery by the Company to the Trustee of an Officers'
Certificate stating that such Restricted Security has been sold pursuant to
an effective registration statement under the Securities Act or transferred
in compliance with Rule 144 under the Securities Act (or any successor
provision thereto). Any Restricted Security as to which the Company has
delivered to the Trustee an Officers' Certificate that such restrictions on
transfer shall have expired in accordance with their terms or shall have
terminated may, upon surrender of such Restricted Security for exchange to
the Security Registrar or any Transfer Agent in accordance with the provisions
of this Section 305 (accompanied, in the event that such restrictions on
transfer have terminated by reason of a transfer in compliance with Rule
144 or any successor provision, by an opinion of counsel having substantial
experience in practice under the Securities Act and otherwise reasonably
acceptable to the Company, addressed to the Company and in form acceptable to
the Company, to the effect that the transfer of such Restricted Security has
been made in compliance with Rule 144 or such successor provision) be exchanged
for a new
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Registered Security, of like tenor and aggregate principal amount, which
shall not bear the restrictive legend required by Section 206. The Company
shall inform the Trustee in writing of the effective date of any registration
statement registering the Securities under the Securities Act. The Trustee
shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the aforementioned opinion of counsel or
registration statement.
As used in the preceding two paragraphs of this Section
305, the term "transfer" encompasses any sale, pledge, transfer or other
disposition of any Restricted Security.
(c) Notwithstanding any other provisions of this
Indenture or the Securities, transfers of a Global Registered Security, in
whole or in part, transfers and exchanges of interests therein of the
kinds described in Clauses (2) and (3) below and exchanges of interests in
Global Registered Securities or of other Securities as described in Clause
(4) below, shall be made only in accordance with this Section 305(c).
Transfers and exchanges subject to this Section 305 shall also be subject to
the other provisions of this Indenture that are not inconsistent with this
Section 305.
(1) A Global Registered Security may not be transferred, in
whole or in part, to any Person other than the Depositary or a
nominee thereof, and no such transfer to any such other Person may be
registered; provided that this Clause (1) shall not prohibit any
transfer of a Security that is issued in exchange for a Global
Registered Security but is not itself a Global Registered Security.
No transfer of a Registered Security to any Person shall be effective
under this Indenture or the Registered Securities unless and until
such Registered Security has been registered in the name of such
Person. Nothing in this Section 305(c)(1) shall prohibit or render
ineffective any transfer of a beneficial interest in a Global
Registered Security effected in accordance with the other provisions
of this Section 305(c).
(2) Restricted Global Registered Security to Unrestricted
Global Registered Security. If the holder of a beneficial interest in
the Restricted Global Registered Security wishes at any time to
transfer such interest to a Person who wishes to take delivery
thereof in the form of a beneficial interest in the Unrestricted
Global Registered Security, such transfer may be effected, subject to
the rules and procedures of the U.S. Depositary, Euroclear and
CEDEL, in each case to the extent applicable (the "Applicable
Procedures"), only in
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accordance with this Section 305(c)(2). Upon receipt by the
Trustee, as Security Registrar, at its office in The City of New York
of (A) written instructions given in accordance with the Applicable
Procedures from an Agent Member directing the Trustee to credit or
cause to be credited to a specified Agent Member's account a
beneficial interest in the Unrestricted Global Registered Security
in a principal amount equal to that of the beneficial interest in
the Restricted Global Registered Security to be so transferred, (B)
a written order given in accordance with the Applicable Procedures
containing information regarding the account of the Agent Member
(and, if applicable, the Euroclear or CEDEL account, as the case
may be) to be credited with, and the account of the Agent Member to
be debited for, such beneficial interest and (C) a certificate given
by the holder of such beneficial interest to the effect that such
transfer has been effected in compliance with Rule 144 or Rule 904
under the Securities Act, the Trustee, as Security Registrar, shall
instruct the U.S. Depositary to reduce the principal amount of the
Restricted Global Registered Security, and to increase the principal
amount of the Unrestricted Global Registered Security, by the
principal amount of the beneficial interest in the Restricted
Global Registered Security to be so transferred, and to credit or
cause to be credited to the account of the Person specified in
such instructions a beneficial interest in the Unrestricted Global
Registered Security having a principal amount equal to the amount
by which the principal amount of the Restricted Global Registered
Security was reduced upon such transfer.
(3) Unrestricted Global Registered Security to Restricted
Global Registered Security. If the holder of a beneficial interest
in the Unrestricted Global Registered Security wishes at any time
to transfer such interest to a Person who wishes to take delivery
thereof in the form of a beneficial interest in the Restricted
Global Registered Security, such transfer may be effected, subject
to the Applicable Procedures, only in accordance with this Section
305(c)(3). Upon receipt by the Trustee, as Security Registrar, at
its office in The City of New York of (A) written instructions
given in accordance with the Applicable Procedures from an Agent
Member directing the Trustee to credit or cause to be credited to a
specified Agent Member's account a beneficial interest in the
Restricted Global Registered Security in a principal amount equal
to that of the beneficial interest in the Unrestricted Global
Registered Security to be so transferred and (B) a written order given
in accordance with the Applicable Procedures
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containing information regarding the account of the Agent Member to
be credited with, and the account of the Agent Member (and, if
applicable, the Euroclear or CEDEL account, as the case may be) to
be debited for, such beneficial interest, the Trustee, as Security
Registrar, shall instruct the U.S. Depositary to reduce the
principal amount of the Unrestricted Global Registered Security and
to increase the principal amount of the Restricted Global Registered
Security, by the principal amount of the beneficial interest in the
Unrestricted Global Registered Security to be so transferred, and
to credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the
Restricted Global Registered Security having a principal amount
equal to the amount by which the principal amount of the Unrestricted
Global Registered Security was reduced upon such transfer.
(4) Other Exchanges. In the event that a Global Registered
Security or any portion thereof is exchanged for Securities other than
Global Registered Securities, such other Securities may in turn be
exchanged (on transfer or otherwise) for Registered Securities that
are not Global Securities or for beneficial interests in a Global
Registered Security (if any is then outstanding) only in
accordance with such procedures, which shall be substantially
consistent with the provisions of Clauses (1) through (3) above
(including the certification requirements intended to insure that
transfers and exchanges of beneficial interests in the Restricted
Global Registered Security comply with Rule 144 or Regulation S, as
the case may be) and any Applicable Procedures, as may be from time
to time adopted by the Company and the Trustee.
(d) Neither the Trustee, the Principal Paying Agent nor any
of their agents shall (1) have any duty to monitor compliance with or with
respect to any federal or state or other securities or tax laws or (2) have
any duty to obtain documentation on any transfers or exchanges other than as
specifically required hereunder.
SECTION 306. Mutilated, Destroyed, Lost or Stolen
Securities and Coupons.
If any mutilated Security or a Security with a mutilated
coupon appertaining to it is surrendered to the Trustee or a Transfer Agent
outside the United States, the Company shall execute, the Trustee shall
authenticate and the Trustee or Transfer Agent shall deliver in exchange
therefor
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a new Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to the surrendered Security; provided, however, that any
Bearer Security or any coupon shall be delivered only outside the United
States and, so long as the Securities are listed on the Luxembourg Stock
Exchange and the rules of the Luxembourg Stock Exchange so require, such
delivery shall occur at the Transfer Agent in Luxembourg; and provided,
further, that all Bearer Securities shall be delivered and received in person.
If there be delivered to the Company and the Trustee or a
Transfer Agent outside the United States:
(1) evidence to their satisfaction of the destruction, loss or
theft of any Security or coupon, and
(2) such security or indemnity as may be satisfactory to
the Company and the Trustee to save each of them and any agent of
either of them harmless,
then, in the absence of actual notice to the Company, the Trustee or the
Transfer Agent that such Security or coupon has been acquired by a bona fide
purchaser, the Company shall execute, the Trustee shall authenticate and the
Trustee or Transfer Agent shall deliver, in lieu of any such destroyed, lost
or stolen Security or in exchange for the Security to which such coupon
appertains (together with all appurtenant coupons not destroyed, lost or
stolen), a new Security of like tenor and principal amount and bearing a
number not contemporaneously outstanding, with coupons corresponding to the
coupons, if any, appertaining to such destroyed, lost or stolen Security or
appertaining to the Security to which such destroyed, lost or stolen coupon
appertains; provided, however, that any Bearer Security or any coupon shall be
delivered only outside the United States and, so long as the Securities are
listed on the Luxembourg Stock Exchange and the rules of the Luxembourg
Stock Exchange so require, such delivery shall occur at the Transfer Agent
in Luxembourg; and provided, further, that all Bearer Securities shall be
delivered and received in person.
In case any such mutilated, destroyed, lost or stolen Security
or coupon has become or is about to become due and payable, the Company in
its discretion, but subject to any conversion rights, may, instead of
issuing a new Security, pay such Security or coupon, upon satisfaction of the
conditions set forth in the preceding paragraph; provided, however, that,
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except as otherwise provided in the form of Securities set forth in Section
202(a), the principal of and interest on Bearer Securities shall be payable
only at an office or agency outside the United States and, in the case of
interest, only upon presentation and surrender of the coupons appertaining
thereto.
Upon the issuance of any new Security under this Section 306,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee, the Principal
Paying Agent and the Transfer Agent) connected therewith.
Every new Security with its coupons, if any, issued
pursuant to this Section 306 in lieu of any destroyed, lost or stolen
Security or in exchange for a Security to which a destroyed, lost or
stolen coupon appertains, shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security and its coupons, if any, or the destroyed, lost or stolen
coupon shall be at any time enforceable by anyone, and such new Security and
coupons, if any, shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Securities and coupons duly
issued hereunder.
The provisions of this Section 306 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities
or coupons.
SECTION 307. Payment of Interest, Interest Rights Preserved.
Interest on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. In case a Bearer Security is surrendered in exchange for
a Registered Security at an office or agency of the Company designated
pursuant to Section 1002 for the purpose after the close of business (at such
office or agency) on any Regular Record Date and before the opening of
business (at such office or agency) on the next succeeding Interest Payment
Date, such Bearer Security shall be surrendered without the coupon relating
to such Interest Payment Date and interest will not be payable on such
Interest Payment Date in respect of the Registered Security issued in exchange
for such Bearer Security, but will be payable only to the Holder of such
coupon when due.
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Interest on the Temporary Global Bearer Security shall be
payable only after the issuance of the Bearer Securities for which it is
exchangeable as provided in the form of Temporary Global Bearer Security set
forth in Section 202(c).
Any interest on any Registered Security which is payable,
but is not punctually paid or duly provided for, on any Interest Payment
Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in Clause (1) or (2)
below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered
Securities (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each
Registered Security, the date of the proposed payment and the
Special Record 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. The Special Record
Date for the payment of such Defaulted Interest shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee, in the name and at
the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Registered Securities at such Holder's address as it appears in the
Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose
names the Registered Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
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Clause (2). In case a Bearer Security is surrendered in exchange
for a Registered Security at an office or agency of the Company
designated pursuant to Section 1002 for such purpose after the close
of business (at such office or agency) on any Special Record Date and
before the opening of business (at such office or agency) on the
related proposed date for payment of Defaulted Interest, such Bearer
Security shall be surrendered outside the United States without
the coupon relating to such proposed date of payment and Defaulted
Interest will not be payable on such proposed date of payment in
respect of the Registered Security issued in exchange for such
Bearer Security, but will be payable only to the Holder of such coupon
upon surrender thereof.
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities
may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and
Section 305, each Security delivered under this Indenture upon registration
of transfer of or in exchange for or in lieu of any other Security shall
carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.
In the case of any Registered Security which is converted as
permitted by Section 1201 after any Regular Record Date and on or prior to the
next succeeding Interest Payment Date (other than any Registered Security
whose Maturity is prior to such Interest Payment Date), interest whose Stated
Maturity is on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest (whether or not
punctually paid or duly provided for) shall be paid to the Person in whose
name such Registered Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the
case of any Security which is converted, interest whose Stated Maturity is
after the date of conversion of such Security shall not be payable.
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SECTION 308. Persons Deemed Owners.
Title to any Bearer Security or coupon shall pass by
delivery. The Company, the Trustee, the Principal Paying Agent and any other
agent of the Company or the Trustee may treat the bearer of any Bearer Security
or the Temporary Global Bearer Security and the bearer of any coupon as the
absolute owner of such Security or coupon, as the case may be, for the
purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not such Security or coupon be overdue, and
neither the Company, the Trustee, the Principal Paying Agent nor any other
agent of the Company or the Trustee shall be affected by notice to the
contrary. Prior to due presentment of a Registered Security for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Registered Security is
registered as the owner of such Registered Security for the purpose of
receiving payment of principal of and (subject to Sections 305 and 307)
interest on such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 309. Cancellation.
All Securities and coupons surrendered for payment,
redemption, repurchase, registration of transfer or exchange or conversion
shall, if surrendered to any Person other than the Trustee, be delivered to
the Trustee. All Bearer Securities and coupons so surrendered shall be
immediately cancelled by such Person upon receipt prior to being forwarded to
the Trustee. All Registered Securities so delivered to the Trustee shall be
canceled promptly by the Trustee. No Securities shall be authenticated in
lieu of or in exchange for any Securities canceled as provided in this
Section 309 except as expressly permitted by this Indenture. The canceled
Temporary Global Bearer Security and certificates referred to in Section 304
shall be delivered to the Company. All canceled Securities, coupons and any
certificates in connection therewith held by the Trustee shall be delivered to
the Company.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
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SECTION 311. Forms of Certification.
(a) Whenever any provision of this Indenture or the form of
Temporary Global Bearer Security contemplates that certification be given by
a beneficial owner of a portion of the Temporary Global Bearer Security, such
certification shall be provided substantially in the form of the following
certificate, with only such changes as shall be approved by the Company and
Goldman Sachs International:
"CERTIFICATE
ALBERTO-CULVER COMPANY
5 1/2% CONVERTIBLE SUBORDINATED DEBENTURES
DUE JUNE 30, 2005
This is to certify that as of the date hereof and except
as provided in the fourth paragraph hereof, the above-captioned Securities
held by you for our account (i) are owned by a person that is not a United
States person (as defined below), (ii) are owned by a United States person
that is (A) a foreign branch of a United States financial institution (as
defined in United States Treasury Regulations Section 1.165-12(c)(1)(v) (a
"financial institution")) purchasing for its own account or for resale or (B)
a United States person who acquired the Securities through a foreign branch
of a United States financial institution and who holds the Securities
through such financial institution on the date hereof (and in the case of
either clause (A) or (B), the financial institution hereby agrees for the
benefit of the Company to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986,
as amended, and the regulations thereunder) or (iii) are owned by a financial
institution for purposes of resale during the restricted period (as defined
in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)). In
addition, a financial institution described in clause (iii) of the preceding
sentence (whether or not also described in clause (i) or (ii)) certifies
that it has not acquired the Securities for purposes of resale directly or
indirectly to a United States person or to a person within the United States.
As used in this certificate, "United States person" means
a citizen or resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the United States or
any political subdivision thereof or an estate or trust the income of which is
subject to United States Federal income taxation regardless of its source;
"United States" means the United States of America (including the States and
the District of Columbia),
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its territories, its possessions and other areas subject to its
jurisdiction; and its "possessions" include Puerto Rico, the U.S. Virgin
Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We undertake to advise you by telecopy, on or before the date
on which you intend to submit your certification relating to the
above-captioned Securities then appearing in your books as being held for our
account, if the above statement as to beneficial ownership is not correct on
such date as to all such Securities.
This certificate excepts and does not relate to U.S.$________
principal amount of the above-captioned Securities appearing on your books as
being held for our account as to which we are not yet able to certify and as
to which we understand that exchange and delivery of Definitive Securities
cannot be made until we are able so to certify.
We understand that this certificate is required in
connection with certain tax regulations in the United States. If
administrative or legal proceedings are commenced or threatened in
connection with which this certificate is or would be relevant, we
irrevocably authorize you to produce this certificate or a copy hereof to any
interested party in such proceedings.
Dated: ___________________, 19__*
*To be dated on or after
the 15th day before the
Exchange Date.
[Name of Account Holder]
________________________
(Authorized Signatory)
Name:
Title:
(b) In connection with the certification contemplated by
Sections 202, 1104 and 1106 and 1401 and 1402 required in connection with
payment of the Redemption Price of Securities upon redemption thereof, or the
Repurchase Price of Securities upon repurchase thereof, in each case plus
accrued interest, if any, such certification shall be in the form of
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the following certificate, with only such changes as shall be approved by the
Company and satisfactory to the Trustee:
"CERTIFICATE
ALBERTO-CULVER COMPANY
5 1/2% CONVERTIBLE SUBORDINATED DEBENTURES
DUE JUNE 30, 2005
The undersigned Holder of this Security understands that the
Company may be required by Section 1445 of the United States Internal
Revenue Code of 1986, as amended, to withhold ten percent of the principal
payable to the Holder upon the redemption or repurchase of this Security if
this Security constitutes a "United States real property interest", as
such term is defined in United States Temporary Treasury Regulations Section
1.897-9T(b) or applicable successor regulations, in the hands of the
beneficial owner of this Security if such beneficial owner is not a United
States person, as such term is defined in Section 7701 of the United States
Internal Revenue Code of 1986, as amended. In order to inform the Company
whether withholding is required upon the redemption or repurchase of this
Security, the undersigned Holder, for itself and on behalf of the beneficial
owner of this Security, hereby certifies as follows:
[ ] This Security constitutes a United States real
property interest, as above defined, in the hands
of its beneficial owner;
[ ] This Security does not constitute a United States
real property interest, as above defined, in the
hands of its beneficial owner;
[ ] The beneficial owner of this Security is a United
States person, as above defined, whose name,
address and taxpayer identification number are as
follows:
____________________________
____________________________
____________________________
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No payment of the Redemption Price or Repurchase Price or any
accrued interest will be made to the Holder or any other Person with respect
to the redemption or repurchase of this Security unless one, but only one, of
the boxes above is marked.
[Name of Holder]
_________________________
Dated: __________, _____*"
*To be dated the date
of presentation or
surrender
(c) In connection with the certification contemplated by
the legend set forth in Section 202(b) or by Section 305 or 1202 relating to
compliance with certain restrictions relating to transfers of Restricted
Securities, such certification shall be provided substantially in the form
of the following certificate, with only such changes as shall be
approved by the Company and Goldman Sachs International:
CERTIFICATE
ALBERTO-CULVER COMPANY
5 1/2% CONVERTIBLE DEBENTURES DUE JUNE 30, 2005
This is to certify that as of the date hereof with respect to
U.S.$________ principal amount (as defined in the Indenture) of the
above-captioned securities presented or surrendered on the date hereof (the
"Surrendered Securities") for registration of transfer, or for exchange or
conversion where the securities issuable upon such exchange or conversion are
to be registered in a name other than that of the undersigned Holder (each
such transaction being a "transfer"), the undersigned Holder (as defined in the
Indenture) certifies that the transfer of Surrendered Securities associated
with such transfer complies with the restrictive legend set forth on the
face of the Surrendered Securities for the reason checked below:
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__________ The transfer of the Surrendered Securities
complies with Rule 144 under the United
States Securities Act of 1933, as amended
(the "Securities Act"); or
__________ The transfer of the Surrendered Securities
complies with Rule 144A under the
Securities Act; or
__________ The transfer of the Surrendered Securities
complies with Rule 904 under the Securities
Act.
[Name of Holder]
____________________
Dated: ____________, ____*
*To be dated the date
of presentation or
surrender
SECTION 312. CUSIP Numbers.
The Company in issuing Registered Securities may use "CUSIP"
numbers (if then generally in use) in addition to serial numbers, and in
issuing Bearer Securities may use "ISIN" numbers (if then generally in
use); if so, the Trustee shall use such "CUSIP" and "ISIN" numbers in
addition to serial numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is
made as to the correctness of such CUSIP and ISIN numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the serial or other identification numbers
printed on the Securities, and any such redemption shall not be affected by
any defect in or omission of such CUSIP or ISIN numbers.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of conversion, or
registration of transfer or exchange, or replacement of Securities herein
expressly provided for and any right to receive Additional Amounts as provided
in the forms of Securities set forth in Section 202 and the Company's
obligations to the Trustee pursuant to Section 607), and the Trustee, at the
expense of the Company, shall execute proper instruments in form and
substance satisfactory to the Trustee acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered and all coupons appertaining thereto (other than
(i) Securities and coupons which have been destroyed, lost or
stolen and which have been replaced or paid as provided in
Section 306, (ii) coupons appertaining to Securities called
for redemption or repurchased and maturing after the
relevant Redemption Date or Repurchase Date, as the case may
be, whose surrender has been waived as provided in Section
1106 and (iii) Securities and coupons for whose payment money
has theretofore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 1003)
have been delivered to the Trustee for cancellation; or
(B) all such Securities and all coupons
appertaining thereto not theretofore delivered to the
Trustee or the Principal Paying Agent or its agent for
cancellation (other than Securities or coupons referred to
in clauses (i) through (iii) of clause (1)(A) above)
(i) have become due and payable, or
(ii) will have become due and payable at their
Stated Maturity within one year, or
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(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of clause (i), (ii) or (iii)
above, has deposited or caused to be deposited with the
Trustee as trust funds (immediately available to the Holders
in the case of clause (i)) in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on
such Securities and coupons not theretofore delivered to
the Trustee for cancellation, for principal and interest to
the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 607,
the obligations of the Company to any Authenticating Agent under Section 612
and, if money shall have been deposited with the Trustee pursuant to clause
(1)(B) of this Section 401, the obligations of the Trustee under Section 402
and the last paragraph of Section 1003 shall survive. Funds held in trust
pursuant to this Section are not subject to the provisions of Article Thirteen.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401 shall be
held in trust and applied by it, in accordance with the provisions of the
Securities, the coupons and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company acting as its own Paying
Agent), to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee.
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All moneys deposited with the Trustee pursuant to Section
401 (and held by it or any Paying Agent) for the payment of Securities
subsequently converted shall be returned to the Company upon Company Request.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of
the following events (whatever the reason for such Event of Default and whether
it shall be occasioned by the provisions of Article Thirteen or 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):
(1) default in the payment of any interest (including any
Additional Amount) upon any Security when it becomes due and
payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of any Security
at its Maturity; or
(3) default in the performance or observance, or breach, of
any term, covenant, warranty or agreement of the Company in the
Securities or this Indenture, and continuance of such default or
breach for a period of 60 days after written notice of such failure,
requiring the Company to remedy the same and stating that such notice
is a "Notice of Default", shall have been given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Outstanding
Securities; or
(4) (a) failure by the Company to make any payment in
respect of any outstanding Indebtedness in an aggregate amount in
excess of U.S.$10,000,000 or the equivalent thereof in any other
currency or composite currency and the continuance of such failure
beyond any applicable grace period provided for in the terms of
such Indebtedness, or (b) default by the Company with respect to any
Indebtedness, which default results in the acceleration of
Indebtedness in an aggregate amount in excess of U.S.$10,000,000 or
the equivalent thereof in any other currency or composite currency
without such Indebtedness having been discharged or, in the case of
(a) or (b), such payment default or acceleration, as the case may be,
having been cured, waived, rescinded or annulled within a period of
10 days after written notice thereof by any trustee or other
representative of the holders of such Indebtedness to the Company,
or to the
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Company by or on behalf of the holders of not less than 25% in
principal amount of such Indebtedness; provided, however, that if,
prior to the entry of judgment in favor of any trustee with respect to
any Indebtedness or in favor of any holder of any Indebtedness or
other representative of the holders thereof, such failure or default
under such indenture or instrument shall be remedied or cured by the
Company, or waived by the holders of such Indebtedness, and such
acceleration (if applicable) shall be rescinded, then the Event of
Default under the Indenture shall be deemed likewise to have been
remedied, cured or waived; "Indebtedness" is defined to mean
obligations of, or guaranteed or assumed by, the Company for borrowed
money, including obligations evidenced by bonds, debentures, notes or
other similar instruments (it being understood that "Indebtedness"
does not include obligations to pay the purchase price of goods if
such goods are acquired, and such obligations are incurred, in the
ordinary course of the Company's business); or
(5) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under Federal bankruptcy law or any other applicable Federal or State
law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(6) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect
of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency proceedings against it, or the filing by it of a petition
or answer or consent seeking reorganization or relief under Federal
bankruptcy law or any other applicable Federal or State
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law, or the consent by it to the filing of such petition or to the
appointment or taking possession of a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company in
furtherance of any such action.
SECTION 502. Acceleration of Maturity; Rescission
and Annulment.
If an Event of Default (other than an Event of Default
specified in Section 501(5) or 501(6)) occurs and is continuing, then in every
such case the Trustee or the Holders of not less than 25% in principal amount
of the Outstanding Securities may declare the principal of all the Securities
to be due and payable immediately, by a notice in writing to the Company (and
to the Trustee if given by the Holders), and upon any such declaration such
principal and all accrued interest thereon shall become immediately due and
payable. If an Event of Default specified in Section 501(5) or 501(6) occurs,
the principal of, and accrued interest on, all the Securities shall ipso facto
become immediately due and payable without any declaration or other Act of the
Holder or any act on the part of the Trustee.
At any time after such declaration of acceleration has been
made (or any such automatic acceleration has occurred) and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article Five provided, the Holders of a majority in
principal amount of the Outstanding Securities, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of any Securities which have
become due otherwise than by such declaration of acceleration
and any interest thereon at the rate borne by the Securities,
(C) interest upon overdue interest at a rate of 5
1/2% per annum, and
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(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default, other than the nonpayment of
the principal of, and any interest on, Securities which have become
due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
In addition to the foregoing, if any declaration of
acceleration is based solely on an Event of Default specified in Section 501(4)
and if, at any time after such declaration and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, such Event of Default is deemed to have been remedied,
cured or waived pursuant to the proviso of Section 501(4) and the conditions
set forth in Clauses (1) and (2) of the preceding paragraph have been
satisfied, then such declaration and its consequences shall be deemed to have
been automatically rescinded and annulled without any further action by the
Trustee or the Holders.
No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest
(including any Additional Amounts) on any Security when it becomes due
and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of
any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and any coupons appertaining thereto, the whole
amount then due and payable on such Securities and coupons for principal and
interest (including any Additional Amounts) and interest on any overdue
principal and on any overdue interest (including any Additional Amounts), at a
rate of 5 1/2% per annum, and in
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addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon the
Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders of Securities and coupons by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor upon
the Securities or the property of the Company or of such other obligor or
either of their creditors, the Trustee (irrespective of whether the principal
of, and any interest on, the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders of
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Securities and coupons allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities and coupons to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities and coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
of a Security or coupon any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the coupons or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security or coupon in any such proceeding; provided, however, that
the Trustee may, on behalf of such Holders, vote for the election of a trustee
in bankruptcy or similar official and be a member of a creditors' or other
similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities or Coupons.
All rights of action and claims under this Indenture or the
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such 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 reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which judgment has been recovered.
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SECTION 506. Application of Money Collected.
Subject to Article Thirteen, any money collected by the
Trustee pursuant to this Article Five shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal or interest, upon presentation of the
Securities or coupons, or both, as the case may be, and the notation thereon of
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 607;
SECOND: To the payment of the amounts then due and unpaid for
principal or interest on the Securities and coupons in respect of
which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities and coupons for principal
and interest, respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security or coupon shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount
of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
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(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to
Receive Principal and Interest
and to Convert.
Notwithstanding any other provision in this Indenture, the
Holder of any Security or coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of and (subject to Section
307) interest on such Security or payment of such coupon on the respective
Stated Maturities expressed in such Security or coupon (or, in the case of
redemption or repurchase, on the Redemption Date or Repurchase Date, as the
case may be), and to convert such Security in accordance with Article Twelve,
and to institute suit for the enforcement of any such payment and right to
convert, and such rights shall not be impaired without the consent of such
Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company, the
Trustee and the Holders of Securities and coupons shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and such Holders shall continue as though no such
proceeding had been instituted.
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SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or coupons in the
last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders of Securities or coupons is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security or coupon to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or any acquiescence therein. Every right and remedy
given by this Article Five or by law to the Trustee or to the Holders of
Securities or coupons may be exercised from time to time, and as often as may
be deemed expedient, by the Trustee or (subject to the limitations contained in
this Indenture) by the Holders of Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities.
The Holders of a majority in principal amount of the
Outstanding Securities 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 that
(1) such direction shall not be in conflict with any rule
of law or with this Indenture, and
(2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction or this
Indenture.
SECTION 513. Waiver of Past Defaults.
The Holders, either (a) through the written consent of not
less than a majority in principal amount of the
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Outstanding Securities, or (b) by the adoption of a resolution, at a meeting of
Holders of the Outstanding Securities at which a quorum is present, by the
Holders of at least 66 2/3% in principal amount of the Outstanding Securities
represented at such meeting, may on behalf of the Holders of all the Securities
and coupons waive any past default hereunder and its consequences, except a
default (1) in the payment of the principal of or interest on any Security, or
(2) in respect of a covenant or provision hereof which under Article Eight
cannot be modified or amended without the consent of the Holders of each
Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security or coupon 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, suffered 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; but the provisions of this Section 514 shall not apply to any
suit instituted by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder of any Security or coupon for the enforcement of the
payment of the principal of or interest on any Security or the payment of any
coupon on or after the respective Stated Maturity or Maturities expressed in
such Security or coupon (or, in the case of redemption, on or after the
Redemption Date) or for the enforcement of the right to convert any Security in
accordance with Article Twelve.
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SECTION 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision 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, but not to verify the contents thereof.
(b) In case an Event of Default has occurred and is
continuing (provided, in the case of an Event of Default under Section 501(4),
the Trustee is deemed to have notice of such Event of Default pursuant to
Section 603(8)), 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.
(c) 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 wilful misconduct, except that
(1) this paragraph (c) shall not be construed to limit
the effect of paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts;
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(3) 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 a majority in principal amount of
the Outstanding Securities 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
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not therein expressly so 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.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder
as to which the Trustee has received written notice, the Trustee shall give to
all Holders of Securities, in the manner provided in Section 105, notice of
such default, unless such default shall have been cured or waived; provided,
however, that in the case of any default of the character specified in Section
501(3), no such notice to Holders of Securities shall be given until at least
30 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officers' Certificate,
other certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, coupon,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
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(2) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors shall be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(4) the Trustee may consult with counsel of its selection
and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(5) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Securities or coupons
pursuant to this Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(6) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon, other
evidence of indebtedness or other paper or document, but the Trustee
may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by agent
or attorney;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
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(8) the Trustee shall not be deemed to have notice of any
Event of Default under Section 501(4) unless a Responsible Officer of
the Trustee shall have received notice thereof from Holders of not
less than 25% in principal amount of the Outstanding Securities.
SECTION 604. Not Responsible for Recitals or Issuance
of Securities.
The recitals contained herein and in the Securities (except
the Trustee's certificates of authentication) and in the coupons shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities or coupons. The Trustee
shall not be accountable for the use or application by the Company of
Securities or the proceeds thereof.
SECTION 605. May Hold Securities, Act as Trustee
Under Other Indentures.
The Trustee, any Authenticating Agent, any Paying Agent, any
Conversion Agent or any other agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and coupons and may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent,
Conversion Agent or such other agent.
The Trustee may become and act as trustee under other
indentures under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding in the same
manner as if it were not Trustee hereunder.
SECTION 606. Money Held in Trust.
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
except as otherwise agreed in writing with the Company.
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SECTION 607. Compensation and Indemnification of Trustee
and Its Prior Claims.
The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, such compensation as the
Company and the Trustee shall from time to time agree on in writing (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 covenants and agrees to pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it 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
agents and other persons not regularly in its employ), except to the extent
that any such expense, disbursement or advance is due to its negligence or bad
faith. The Company also covenants to indemnify the Trustee for, and to hold it
harmless against, any and all loss, liability, damage, claims or expense
including taxes (other than taxes based on or measured or determined by the
income of the Trustee) incurred by it, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder or the
performance of its duties hereunder, including the costs and expenses of
defending itself against or investigating any claim or liability in the
premises, except to the extent that any such loss, liability, damage, claims or
expense was due to the Trustee's negligence or bad faith. The obligations of
the Company under this Section 607 to compensate and indemnify the Trustee and
to pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. To secure the Company's payment obligations
under this Section, the Trustee shall have a lien prior to the Securities on
all money or property held or collected by the Trustee, as such, except money
or property held in trust to pay the principal of or interest on particular
Securities or coupons and such lien shall survive the satisfaction and
discharge of the Indenture and any other termination of the Indenture including
any termination under any bankruptcy law. When the Trustee incurs expenses or
renders services in connection with an Event of Default specified in Section
501(5) or (6), the holders by their acceptance of the Securities hereby agree
that such expenses and the compensation for such services are intended to
constitute expenses of administration under any bankruptcy law. "Trustee" for
purposes of this Section 607 shall include any predecessor Trustee, but the
negligence or bad faith of any Trustee shall not (except to the extent
otherwise required by law) affect the indemnification of any other Trustee.
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SECTION 608. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
a corporation organized and doing business under the laws of the United States
of America, any State thereof, or the District of Columbia, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least U.S.$50,000,000, subject to supervision or examination by
federal or state authority, in good standing and having an established place of
business in the Borough of Manhattan, The City of New York, and the City of
London, England. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. 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 and a successor shall
be appointed pursuant to Section 609.
SECTION 609. Resignation and Removal; Appointment
of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 610.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 610 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and the Company.
(d) If at any time:
(1) the Trustee shall cease to be eligible under Section
608 and shall fail to resign after written request therefor by the
Company or by any Holder of a
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Security who has been a bona fide Holder of a Security for at least
six months, 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 (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder of a Security who has been
a bona fide Holder of a Security 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.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee and shall comply with the applicable requirements of this
Section and Section 610. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 610,
become the successor Trustee and supersede the successor Trustee appointed by
the Company. If no successor Trustee shall have been so appointed by the
Company or the Holders of Securities and accepted appointment in the manner
required by this Section and Section 610, any Holder of a Security who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee to all
Holders of Securities in the manner provided in Section 105. Each notice shall
include the name of the successor Trustee and the address of its Corporate
Trust Office.
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SECTION 610. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be eligible under this
Article.
SECTION 611. Merger, Conversion, Consolidation or
Succession to Business.
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
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
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SECTION 612. Authenticating Agent.
The Principal Paying Agent may authenticate the Temporary
Global Bearer Security, and Bankers Trust Luxembourg, S.A. may authenticate
Bearer Securities, as the Trustee's Authenticating Agent. The Trustee may,
with the consent of the Company, appoint an additional Authenticating Agent or
Agents acceptable to the Company with respect to the Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities issued
upon exchange or substitution pursuant to this Indenture.
Securities authenticated by an Authenticating Agent shall be
entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder, and every
reference in this Indenture to the authentication and delivery of Securities by
the Trustee or the Trustee's certificate of authentication shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall at all
times be a corporation organized and doing business under the laws of the
United States of America, any State thereof, the District of Columbia, England
and Wales or Luxembourg, authorized under such laws to act as Authenticating
Agent subject to supervision or examination by government or other fiscal
authority. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section 612, the combined
capital and surplus of such Authenticating Agent 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 an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 612, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section 612.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section 612, without the execution or filing of
any paper or any further act on the part of the Trustee or the Authenticating
Agent.
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An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof 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
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 612, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an Authenticating Agent. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 612.
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section 612.
If an Authenticating Agent is appointed with respect to the
Securities pursuant to this Section 612, the Securities may have endorsed
thereon, in addition to or in lieu of the Trustee's certification of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities referred to in the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By [Authenticating Agent],
as Authenticating Agent
By
-------------------------
Authorized Signatory
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ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 701. Company May Consolidate, Etc., Only on Certain
Terms.
The Company shall not consolidate with or merge into any other
Person or convey, transfer, sell or lease all or substantially all of its
properties and assets to any Person, and the Company shall not permit any
Person to consolidate with or merge into the Company or convey, transfer, sell
or lease all or substantially all of its properties and assets to the Company,
unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer, sell or lease all or substantially
all of its properties and assets to any Person, the Person formed by
such consolidation or into which the Company is merged or the Person
which acquires by conveyance, transfer or sale, or which leases, all
or substantially all of the properties and assets of the Company shall
be a corporation, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, the due and punctual payment of
the principal of and interest (including Additional Amounts payable,
if any, pursuant to Section 1004) on all of the Securities and
coupons, as applicable, and the performance or observance of every
covenant of this Indenture on the part of the Company to be performed
or observed and shall have provided for conversion rights in
accordance with Section 1211;
(2) immediately after giving effect to such transaction and
treating any Indebtedness which becomes an obligation of the Company
as a result of such transaction as having been incurred by the Company
at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is
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required in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied
with, together with any documents required under Section 803.
SECTION 702. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of all or
substantially all the properties and assets of the Company in accordance with
Section 701, the successor Person formed by such consolidation or into which
the Company is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture, the Securities and the coupons,
if any.
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ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 801. Supplemental Indentures Without Consent of
Holders of Securities or Coupons.
Without the consent of any Holders of Securities or coupons,
the Company, when authorized by a Board Resolution, and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants and
obligations of the Company herein and in the Securities and coupons as
permitted by this Indenture; or
(2) to add to the covenants of the Company for the benefit of
the Holders of Securities or coupons, or to surrender any right or
power herein conferred upon the Company; or
(3) to remove or relax the restrictions on payment of
principal or interest in respect of Bearer Securities in the United
States to the extent then permitted under the Code and applicable
regulations of the United States Treasury Department; provided,
however , that no adverse consequences would result to any Holder; or
(4) to make provision with respect to the conversion rights
of Holders of Securities pursuant to Section 1211; or
(5) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein or which is otherwise defective, or to make any other
provisions with respect to matters or questions arising under this
Indenture as the Company and the Trustee may deem necessary or
desirable, provided, such action pursuant to this clause (5) shall not
adversely affect the interests of the Holders of Securities or
coupons.
Upon Company Request, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and subject to
and upon receipt by the Trustee of the documents described in Section 803
hereof, the Trustee shall join with the Company in the execution of any
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supplemental indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations which may be
therein contained.
SECTION 802. Supplemental Indentures with Consent of
Holders of Securities.
With either (a) the written consent of the Holders of not less
than a majority in principal amount of the Outstanding Securities, by the Act
of said Holders delivered to the Company and the Trustee, or (b) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of 66 2/3% in principal amount of
the Outstanding Securities represented at such meeting, the Company, when
authorized by a Board Resolution, and the Trustee may 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 modifying in any manner the rights of the Holders of Securities
or coupons under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent or affirmative vote of the Holder of each
Outstanding Security or coupon affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount or the rate of interest payable thereon, or reduce the amount
of principal that would be due and payable upon a declaration of
acceleration of the maturity thereof pursuant to Section 502 or a
redemption thereof pursuant to Article Eleven, or change the
obligation of the Company to pay Additional Amounts pursuant to
Section 1004, or change the Company's obligation contained in the last
paragraph of Section 1209, or change the coin or currency in which any
Security or the interest thereon or any other amount in respect
thereof is payable, or impair the right to institute suit for the
enforcement of any payment in respect of any Security on or after the
Stated Maturity thereof (or, in the case of redemption or any
repurchase, on or after the Redemption Date or Repurchase Date, as the
case may be) or, except as permitted by Section 1211, adversely affect
the right to convert any Security as provided in Article Twelve, or
modify the provisions of this Indenture with respect to the
subordination of the Securities in a manner adverse to the Holders of
Securities or coupons, or
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(2) reduce the requirements of Section 904 for quorum or
voting, or reduce the percentage in principal amount of the
Outstanding Securities the consent of whose Holders is required for
any such supplemental indenture or the consent of whose Holders is
required for any waiver provided for in this Indenture, or
(3) modify the obligation of the Company to maintain an
office or agency in the Borough of Manhattan, The City of New York,
and in a city in a Western European country (or Luxembourg in
particular if so required) pursuant to Section 1002, or
(4) modify any of the provisions of this Section or Section
513, except to increase any percentage contained herein or therein or
to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; or
(5) modify any of the provisions of Section 1010 or 1011.
It shall not be necessary for any Act of Holders of Securities
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 803. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Sections 601 and 603) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, that such
supplemental indenture has been duly authorized, executed and delivered by the
Company and constitutes a valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms. The Trustee may,
but shall not be obligated to, 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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SECTION 804. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder and of any coupons appertaining thereto shall be bound
thereby.
SECTION 805. Reference in Securities to Supplemental
Indentures.
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Company and the Trustee, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
SECTION 806. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of Section 802, the
Company shall give notice to all Holders of Securities of such fact, setting
forth in general terms the substance of such supplemental indenture, in the
manner provided in Section 105. Any failure of the Company to give such
notice, or any defect therein, shall not in any way impair or affect the
validity of any such supplemental indenture.
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ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
SECTION 901. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities may be called at any time
and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities.
SECTION 902. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities for any purpose specified in Section 901, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, or in the
City of London, England, as the Trustee shall determine. Notice of every
meeting of Holders of Securities, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be given, in the manner provided in Section 105, not less than 21 nor
more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities shall have requested the Trustee to call a meeting of
the Holders of Securities for any purpose specified in Section 901, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication of the
notice of such meeting within 21 days after receipt of such request or shall
not thereafter proceed to cause the meeting to be held as provided herein, then
the Company or the Holders of Securities in the amount specified, as the case
may be, may determine the time and the place in the Borough of Manhattan, The
City of New York, or in the City of London, England, for such meeting and may
call such meeting for such purposes by giving notice thereof as provided in
paragraph (a) of this Section.
SECTION 903. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of
Securities, a Person shall be (a) a Holder of one or more Outstanding
Securities, or (b) a Person appointed by an
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instrument in writing as proxy for a Holder or Holders of one or more
Outstanding Securities by such Holder or Holders. The only Persons who shall
be entitled to be present or to speak at any meeting of Holders shall be the
Persons entitled to vote at such meeting and their counsel, any representatives
of the Trustee and its counsel and any representatives of the Company and its
counsel.
SECTION 904. Quorum; Action.
The Persons entitled to vote a majority in principal amount of
the Outstanding Securities shall constitute a quorum. In the absence of a
quorum within 30 minutes of the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders of Securities, be
dissolved. In any other case, the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period not less
than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting (subject to repeated applications of this
sentence). Notice of the reconvening of any adjourned meeting shall be given
as provided in Section 902(a), except that such notice need be given only once
not less than five days prior to the date on which the meeting is scheduled to
be reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage of the principal amount of the Outstanding Securities
which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting
adjourned for a lack of a quorum, the Persons entitled to vote 25% in principal
amount of the Outstanding Securities at the time shall constitute a quorum for
the taking of any action set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at
which a quorum is present as aforesaid, any resolution and all matters (except
as limited by the proviso to Section 802) shall be effectively passed and
decided if passed or decided by the Persons entitled to vote not less than 66
2/3% in principal amount of Outstanding Securities represented and entitled to
vote at such meeting.
Any resolution passed or decisions taken at any meeting of
Holders of Securities duly held in accordance with this Section shall be
binding on all the Holders of Securities and coupons, whether or not present or
represented at the meeting. The Trustee shall, in the name and at the expense
of
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the Company, notify all the Holders of Securities of any such resolutions or
decisions pursuant to Section 105.
SECTION 905. Determination of Voting Rights; Conduct
and Adjournment of Meetings.
(a) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities in regard to proof of the holding of
Securities and of the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the holding of
Securities shall be proved in the manner specified in Section 103 and the
appointment of any proxy shall be proved in the manner specified in Section 103
or by having the signature of the Person executing the proxy witnessed or
certified by any officer authorized by Section 103(b) to certify to the holding
of Bearer Securities.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustee) of the meeting, unless the
meeting shall have been called by the Company or by Holders of Securities as
provided in Section 902(b), in which case the Company or the Holders of
Securities calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary
of the meeting shall be elected by vote of the Persons entitled to vote a
majority in principal amount of the Outstanding Securities represented at the
meeting.
(c) At any meeting, each Holder of a Security or proxy shall
be entitled to one vote for each U.S.$1,000 principal amount of Securities held
or represented by him; provided, however, that no vote shall be cast or counted
at any meeting in respect of any Security challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The chairman of
the meeting shall have no right to vote, except as a Holder of a Security or
proxy.
(d) Any meeting of Holders of Securities duly called pursuant
to Section 902 at which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in principal amount of the Outstanding
Securities represented at the meeting, and the meeting may be held as so
adjourned without further notice.
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SECTION 906. Counting Votes and Recording Action
of Meetings.
The vote upon any resolution submitted to any meeting of
Holders of Securities shall be by written ballots on which shall be subscribed
the signatures of the Holders of Securities or of their representatives by
proxy and the principal amounts at Stated Maturity and serial numbers of the
Outstanding Securities 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, at least in duplicate, of the
proceedings of each meeting of Holders of Securities shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more Persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
given as provided in Section 902 and, if applicable, Section 904. Each copy
shall be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to the Company
and another to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein stated.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest.
The Company covenants and agrees that it will duly and
punctually pay the principal of and interest on the Securities in accordance
with the terms of the Securities, the coupons appertaining thereto and this
Indenture. The interest due on the Bearer Securities on or before Maturity,
other than Additional Amounts payable as provided in Section 1004 in respect of
principal of such a Security, shall be payable only upon presentation and
surrender of the several coupons for such interest installments as are
evidenced thereby as they severally mature. The Company will deposit or cause
to be deposited with the Trustee, one Business Day prior to the Stated Maturity
of any Security or one Business Day prior to the due date for any installment
of interest, all payments so due, which payments shall be in immediately
available funds on the date of such Stated Maturity or due date, as the case
may be.
SECTION 1002. Maintenance of Offices or Agencies.
The Company hereby appoints (a) the Corporate Trust Office of
the Trustee as its agent in the Borough of Manhattan, The City of New York,
where Registered Securities may be presented or surrendered for payment, where
Bearer Securities and coupons may be presented or surrendered for payment in
the circumstances described below (and not otherwise), where Registered
Securities may be surrendered for registration of transfer or exchange, where
Registered Securities may be surrendered for conversion, where Bearer
Securities may be surrendered for conversion in the circumstances described
below (and not otherwise) and where notices and demands to or upon the Company
in respect of the Securities and coupons and this Indenture may be served, and
(b) (i) the office of Bankers Trust Company, 1 Appold Street, Broadgate, London
EC2A 2HE, England, (ii) the office of Bankers Trust Luxembourg S.A., 14
Boulevard F.D. Roosevelt, L-2450 Luxembourg, Grand Duchy of Luxembourg and
(iii) the office of Swiss Bank Corporation, Paradeplatz 6, CH-8010 Zurich,
Switzerland, as its agents outside of the United States where, subject to any
applicable laws or regulations, Bearer Securities and coupons may be presented
and surrendered for payment, where Registered Securities may be surrendered for
registration of transfer or exchange and where Bearer Securities may be
surrendered for conversion. As provided in
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the form of Bearer Securities set forth in Section 202(a), payment of principal
of or interest on Bearer Securities, including any Additional Amounts payable
on Bearer Securities pursuant to Section 1004, may be made, and Bearer
Securities may be surrendered for conversion, at the Corporate Trust Office of
the Trustee in the Borough of Manhattan, The City of New York, if (but only if)
payment of the full amount of such principal, interest or Additional Amounts,
or surrender of Bearer Securities for conversion, as the case may be, at all
offices outside the United States maintained for such purpose by the Company in
accordance with this Indenture is illegal or effectively precluded by exchange
controls or other similar restrictions on the full payment or receipt of such
amounts in United States Dollars, as determined by the Company.
The Company may at any time and from time to time vary or
terminate the appointment of any such agent or appoint any additional agents
for any or all of such purposes; provided, however, that until all of the
Securities have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of and interest on the Securities have been
made available for payment and either paid or returned to the Company pursuant
to the provisions of Section 1003, the Company will maintain (1) in the Borough
of Manhattan, The City of New York, an office or agency where Registered
Securities may be presented or surrendered for payment and conversion, where
Bearer Securities and coupons may be presented or surrendered for payment and
conversion in the circumstances described in the last sentence of the first
paragraph of this Section (and not otherwise), where Registered Securities may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities and coupons and
this Indenture may be served, and (2) subject to any laws or regulations
applicable thereto, in any city in a Western European country, an office or
agency where Securities and coupons may be presented and surrendered for
payment, where Securities may be presented for registration of transfer or
exchange or conversion; and provided, further, that so long as the Securities
are listed on the Luxembourg Stock Exchange and such stock exchange shall so
require, the Company will maintain a Paying Agent and Conversion Agent in
Luxembourg. The Company will give prompt written notice to the Trustee, and
notice to the Holders in accordance with Section 105, of the appointment or
termination of any such agents and of the location and any change in the
location of any such office or agency.
If at any time the Company shall fail to maintain any such
required office or agency, or shall fail to furnish the Trustee with the
address thereof, presentations and
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surrenders may be made and notices and demands may be served on the Corporate
Trust Office of the Trustee, except that Bearer Securities and coupons may be
presented and surrendered for payment and conversion to the Trustee at its
office in the City of London, England, and the Company hereby appoints the same
as its agent to receive such respective presentations, surrenders, notices and
demands.
SECTION 1003. Money for Security Payments To Be Held
in Trust.
If the Company shall act as a Paying Agent, it will, on or
before each due date of the principal of or interest on any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
the Company will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents, it
will, one Business Day prior to each due date of the principal of or interest
on any Securities, deposit with the Trustee a sum sufficient to pay the
principal or interest so becoming due, such sum to be held for the benefit of
the Persons entitled to such principal or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of any
failure so to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of or interest on Securities for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company
(or any other obligor upon the Securities) in the making of any
payment of principal or interest; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held by such Paying Agent.
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The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of or
interest on any Security and remaining unclaimed for two years after such
principal or interest has become due and payable shall be paid to the Company
on Company Request, or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Security or any coupon appertaining thereto
shall thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in an Authorized Newspaper
in each Place of Payment, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 1004. Additional Amounts.
The Company will pay to the Holder of any Security or any
coupon appertaining thereto Additional Amounts as provided in the form of
Bearer Security in the case of any Bearer Security, or Registered Security, in
the case of any Registered Security, set forth in Section 202. Whenever in
this Indenture there is mentioned, in any context, the payment of the principal
of, or interest on, or in respect of, any Security or any coupon, such mention
shall be deemed to include mention of the payment of Additional Amounts
provided for in this Section to the extent that, in such context, Additional
Amounts are, were or would be payable in respect thereof pursuant to the
provisions of this Section and express mention of the payment of Additional
Amounts (if applicable) in any provisions hereof shall not be construed as
excluding Additional Amounts in those provisions hereof where such express
mention is not made.
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At least 10 days prior to June 30, 1996 or an earlier
Redemption Date or Repurchase Date (and at least 10 days prior to each date of
payment of principal or interest after June 30, 1996 or such earlier Redemption
Date or Repurchase Date, if there has been any change with respect to the
matters set forth in the below-mentioned Officers' Certificate), the Company
will furnish the Trustee and the Company's Paying Agents in London, England,
and in the Borough of Manhattan, The City of New York, if other than the
Trustee, with an Officers' Certificate instructing the Trustee and such Paying
Agents whether such payment of principal of or interest on the Securities shall
be made to Holders of Securities or coupons who are not United States persons
without withholding for or on account of any tax, assessment or other
governmental charge described in the second paragraph of the face of the forms
of Definitive Securities set forth in Section 202. If any such withholding
shall be required, then such Officers' Certificate shall specify by country the
amount, if any, required to be withheld on such payments to such Holders of
Securities or coupons and the Company will pay to the Trustee or the principal
Paying Agent the Additional Amounts required by this Section to be paid in the
event of any such withholding. The Company covenants to indemnify the Trustee
and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense arising out of or in connection with actions taken or
omitted by any of them in reliance on any Officers' Certificate furnished
pursuant to this Section, except to the extent such loss, liability or expense
is attributable to the Trustee's negligence or bad faith.
SECTION 1005. Corporate Existence.
Subject to Article Seven, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors, or Chief Executive Officer and Chief
Financial Officer of the Company jointly, determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and that the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 1006. Maintenance of Properties.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair
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and working order and supplied with all necessary equipment and will cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the
judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will promptly pay or discharge, or cause to be
paid or discharged, before the same may become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary or upon the income, profits or property, real or personal, or upon
any part thereof, of the Company or any Subsidiary, and (2) all claims for
labor, materials and supplies which, if unpaid, might by law become a lien or
charge upon the property of the Company or any Subsidiary; provided, however,
that neither the Company nor any Subsidiary shall be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.
SECTION 1008. Registration and Listing.
Within a reasonable time after the issuance of the Temporary
Global Bearer Security, the Company (i) will effect all registrations with, and
obtain all approvals by, all governmental authorities that may be necessary
under any United States Federal or state law (including the Securities Act, the
Exchange Act and state securities and Blue Sky laws) before the shares of Class
A Common Stock issuable upon conversion of Securities may be lawfully issued
and delivered, and thereafter publicly traded (if permissible under the
Securities Act of 1933), and qualified or listed as contemplated by clause
(ii); and (ii) will list the shares of Class A Common Stock required to be
issued and delivered upon conversion of Securities prior to such issuance or
delivery on each national securities exchange on which outstanding Class A
Common Stock is listed at the time of such delivery and if outstanding Class A
Common Stock is not listed on any national securities exchange or is not so
qualified at the time of such
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delivery, to use its reasonable best efforts to qualify such shares prior to
such delivery for quotation through the Nasdaq National Market.
SECTION 1009. Statement by Officers as to Default.
The Company shall deliver to the Trustee within 120 days after
the end of each fiscal year of the Company an Officers' Certificate stating
that in the course of performance by the signers of their duties as such
officers of the Company they would normally obtain knowledge of whether any
default exists in the performance and observance of any of the terms,
provisions and conditions of this Indenture and whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture. Such
Certificate shall further state, as to each such officer signing such
Certificate, to the best of the knowledge of such officer, as of the date of
such Officers' Certificate, (a) whether any such default exists, (b) whether
the Company during the preceding fiscal year kept, observed, performed and
fulfilled each and every covenant and obligation of the Company under this
Indenture and (c) whether there was any default in the performance and
observance of any of the terms, provisions or conditions of this Indenture
during such preceding fiscal year. If the officers signing the Certificate
know of such a default, whether then existing or occurring during such
preceding fiscal year, the Officers' Certificate shall describe such default
and its status with particularity. The Company shall also promptly notify the
Trustee if the Company's fiscal year is changed so that the end thereof is on
any date other than the then current fiscal year end date.
The Company will deliver to the Trustee, forthwith upon
becoming aware of any default in the performance or observance of any covenant,
agreement or condition contained in this Indenture, or any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
Any notice required to be given under this Section 1009 shall
be delivered to the Trustee at its Corporate Trust Office.
SECTION 1010. Delivery of Certain Information.
At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, upon the request of a Holder of a Restricted
Security or the holder of shares of
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Class A Common Stock issued upon conversion thereof, the Company will promptly
furnish or cause to be furnished Rule 144A Information (as defined below) to
such Holder of Restricted Securities or such holder of shares of Class A Common
Stock issued upon conversion of Restricted Securities, or to a prospective
purchaser of any such security designated by any such Holder or holder, as the
case may be, to the extent required to permit compliance by such Holder or
holder with Rule 144A under the Securities Act (or any successor provision
thereto) in connection with the resale of any such security; provided, however,
that the Company shall not be required to furnish such information in
connection with any request made on or after the date which is three years from
the later of (i) the date such a security (or any predecessor Security) was
acquired from the Company or (ii) the date such a Security (or any Predecessor
Security) was last acquired from the Company or an "affiliate" of the Company
within the meaning of Rule 144 under the Securities Act (or any successor
provision thereto); and provided further, that the Company shall not be
required to furnish such information at any time to a prospective purchaser
located outside the United States who is not a "U.S. person" within the meaning
of Regulation S under the Securities Act if such Security may then be sold to
such prospective purchaser in accordance with Rule 904 under the Securities Act
(or any successor provision thereto). "Rule 144A Information" shall be such
information as is specified pursuant to Rule 144A(d)(4) under the Securities
Act (or any successor provision thereto).
SECTION 1011. Resale of Certain Securities; Reporting Issuer.
During the period beginning on the Closing Date and ending on
the date that is three years from the Closing Date, the Company will not, and
will not permit any of its "affiliates" (as defined under Rule 144 under the
Securities Act or any successor provision thereto) to, resell (x) any
Securities which constitute "restricted securities" under Rule 144 or (y) any
securities into which such Securities have been converted under this Indenture
which constitute "restricted securities" under Rule 144, that in either case
have been reacquired by any of them. The Trustee shall have no responsibility
in respect of the Company's performance of its agreement in the preceding
sentence. The Company will continue to be a "reporting issuer" for purposes of
Rule 903 under the Securities Act until the full principal amount of the
Temporary Global Bearer Security has been exchanged for Definitive Securities
in accordance with this Indenture.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
The Securities may be redeemed in accordance with the
provisions of the forms of Securities set forth in Section 202.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of the Securities or this
Indenture, shall be made in accordance with such provision and this Article
Eleven.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of any of the Securities, the Company shall, at least 60 days (or
75 days in the case of a redemption pursuant to the fourth paragraph of the
reverse of the forms of Definitive Securities set forth in Section 202) prior
to the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date. If the Securities are to be redeemed pursuant to an election of the
Company which is subject to a condition specified in the forms of Securities
set forth in Section 202, the Company shall furnish the Trustee with an
Officers' Certificate stating that the Company is entitled to effect such
redemption and setting forth a statement of facts showing that the conditions
precedent to the right of the Company so to redeem have occurred.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in
Section 105 to the Holders of Securities to be redeemed not less than 30 nor
more than 60 days prior to the Redemption Date, and (except, in the case of a
redemption pursuant to the fourth paragraph of the forms of reverse of the
Definitive Securities set forth in Section 202, to the extent otherwise
expressly provided in such form) such notice shall be irrevocable.
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All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, and accrued interest, if any,
(3) that on the Redemption Date the Redemption Price, and
accrued interest, if any, will become due and payable upon each such
Security to be redeemed, and that interest thereon shall cease to
accrue on and after said date,
(4) the Conversion Rate, the date on which the right to
convert the Securities to be redeemed will terminate and the places
where such Securities, together with all unmatured coupons and any
matured coupons in default appertaining thereto, may be surrendered
for conversion,
(5) the place or places that the certificate required by
Section 202, Section 311(b) and Section 1106 shall be delivered, and
the form of such certificate, and
(6) the place or places where such Securities, together with
all coupons appertaining thereto, if any, maturing after the
Redemption Date, are to be surrendered for payment of the Redemption
Price and accrued interest, if any.
The notice shall specify the serial and ISIN (if any) numbers
of the Bearer Securities (either individually or in group, from one number to
another, or by last digit or digits) called for redemption and, in the case of
Registered Securities, the serial and CUSIP numbers (if any) and the portions
thereof called for redemption.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name of and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
One Business Day prior to any Redemption Date, the Company
shall deposit with the Trustee or with the principal Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money (which shall be in immediately
available funds on such Redemption Date)
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sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date other than any Securities called for
redemption on that date which have been converted prior to the date of such
deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security, if a Registered Security, or any Predecessor Security
to receive interest as provided in the last paragraph of Section 307) be paid
to the Company on Company Request or, if then held by the Company, shall be
discharged from such trust.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified and from and after such date
(unless the Company shall default in the payment of the Redemption Price,
including accrued interest) such Securities shall cease to bear interest and
the coupons for such interest appertaining to Bearer Securities shall, except
to the extent provided below, be void. Upon surrender of any Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price together with accrued and unpaid
interest to the Redemption Date; provided, however, that installments of
interest on Bearer Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable only upon presentation and surrender of
coupons for such interest (at an office or agency outside the United States,
except as otherwise provided in the form of Bearer Security set forth in
Section 202(a)); provided further that installments of interest on Registered
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Record Date according to their
terms and the provisions of Section 307; and provided further that payments of
the Redemption Price plus accrued interest, if any, upon redemption of any
Security shall be made only upon delivery to the Company of a certification by
the Holder in substantially the form of Section 311(b) as to whether the
Security surrendered in connection with such redemption is a "United States
real
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property interest", as defined in the United States Internal Revenue Code of
1986, as amended, with respect to the beneficial owner of the Security being
surrendered. Subject to Section 601 of the Indenture, neither the Trustee nor
any Paying Agent shall have any responsibility with respect to any tax referred
to in such certification, and the Company agrees to indemnify, defend and hold
harmless the Trustee and any Paying Agent against any liability of the Trustee
or any Paying Agent in respect of Section 897 or 1445 of the Internal Revenue
Code of 1986, as amended.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal amount of such Security
shall, until paid, bear interest from the Redemption Date at a rate of 5 1/2%
per annum and each Security shall remain convertible into Class A Common Stock
until the principal of such Security (or portion thereof, as the case may be)
shall have been paid or duly provided for.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons or the surrender of such missing
coupons or coupon may be waived by the Company and the Trustee or the Principal
Paying Agent or its agent, if there be furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made from the Redemption Price, such Holder shall be entitled to receive
the amount so deducted; provided, however, that interest represented by coupons
shall be payable only upon presentation and surrender of those coupons at an
office or agency located outside of the United States (except as otherwise
provided in the form of Bearer Security set forth in Section 202(a)).
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ARTICLE TWELVE
CONVERSION OF SECURITIES
SECTION 1201. Conversion Privilege and Conversion Rate.
Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security other than the
Temporary Global Bearer Security may be converted into fully paid and
nonassessable shares (calculated as to each conversion to the nearest 1/100 of
a share) of Class A Common Stock of the Company at the Conversion Rate,
determined as hereinafter provided, in effect at the time of conversion. Such
conversion right shall commence on September 12, 1995 and expire at the close
of business on June 30, 2005, subject, in the case of the conversion of any
Global Registered Security, to any applicable book-entry procedures of the
Depositary therefor. In case a Security is called for redemption at the
election of the Company or the Holder thereof exercises his right to require
the Company to repurchase the Security, such conversion right in respect of the
Security shall expire at the close of business on the Redemption Date or the
fifth Trading Day preceding the Repurchase Date (as defined in Article
Fourteen), as the case may be, unless the Company defaults in making the
payment due upon redemption or repurchase, as the case may be (in each case
subject as aforesaid to any applicable book entry procedures).
The rate at which shares of Class A Common Stock shall be
delivered upon conversion (herein called the "Conversion Rate") shall be
initially 30.888 shares of Class A Common Stock for each $1,000 principal
amount of Securities. The Conversion Rate shall be adjusted in certain
instances as provided in this Article Twelve.
SECTION 1202. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of
any Definitive Security to be converted shall surrender such Security, duly
endorsed or assigned to the Company or in blank (in the case of any Registered
Security), at any office or agency of the Company maintained for that purpose
pursuant to Section 1002, accompanied by a duly signed conversion notice
substantially in the form set forth in Section 205 stating that the Holder
elects to convert such Security or, if less than the entire principal amount
thereof is to be converted (in the case of any Registered Security), the
portion thereof to be converted. Each Bearer Security
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surrendered for conversion must be surrendered together with all coupons
appertaining thereto that mature after the date of conversion. If any Bearer
Security surrendered for conversion shall not be accompanied by all such
appurtenant coupons, the surrender of any or all of such missing coupons may be
waived by the Company and the Trustee, if there be furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. Matured coupons not in default (including coupons maturing on
the date of conversion) will be payable against surrender thereof, and matured
coupons previously surrendered and in default will continue to be payable,
notwithstanding the exercise of the right of conversion by the Holder of the
Security to which the coupon appertains. Each Registered Security surrendered
for conversion (in whole or in part) during the period from the close of
business on any Regular Record Date next preceding any Interest Payment Date to
the opening of business on such Interest Payment Date shall (except in the case
of any Security or portion thereof which has been called for redemption on a
Redemption Date, or repurchased on a Repurchase Date, occurring within such
period) be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of such Registered Security
(or part thereof, as the case may be) being surrendered for conversion (or, if
such Registered Security was issued in exchange for a Bearer Security after the
close of business on such Regular Record Date, by surrender of one or more
coupons relating to such Interest Payment Date or by both payment in such funds
and surrender of such coupon or coupons, in either case in an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
such Registered Security (or portion thereof) then being converted). The
interest so payable on such Interest Payment Date in respect of such Registered
Security (or portion thereof, as the case may be) surrendered for conversion
shall be paid to the Holder of such Security as of such Regular Record Date.
Interest payable in respect of any Registered Security surrendered for
conversion on or after an Interest Payment Date shall be paid to the Holder of
such Security as of the next preceding Regular Record Date, notwithstanding the
exercise of the right of conversion. Except as provided in this paragraph and
subject to the last paragraph of Section 307, no cash payment or adjustment
shall be made upon any conversion on account of, if the date of conversion is
not an Interest Payment Date, any interest accrued from the Interest Payment
Date next preceding the conversion date, in respect of any Security (or part
thereof, as the case may be) surrendered for conversion, or on account of any
dividends on the Class A Common Stock issued upon conversion. The Company's
delivery to the Holder of the fixed
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number of shares of Class A Common Stock (or a cash adjustment, as provided in
this Indenture) into which a Security is convertible will be deemed to satisfy
the Company's obligation to pay the principal amount of the Security.
Securities shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Securities for
conversion in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Securities as Holders shall cease, and the Person
or Persons entitled to receive the Class A Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such Class A Common Stock at such time. As promptly as practicable on or after
the conversion date, the Company shall issue and deliver to the Trustee, for
delivery to the Holder, a certificate or certificates for the number of full
shares of Class A Common Stock issuable upon conversion, together with payment
in lieu of any fraction of a share, as provided in Section 1203.
All shares of Common Stock delivered upon such conversion of
Restricted Securities shall bear a restrictive legend substantially in the form
of the legend required to be set forth on the Restricted Securities pursuant to
Section 206 and shall be subject to the restrictions on transfer provided in
such legend. Neither the Trustee nor any agent maintained for the purpose of
such conversion shall have any responsibility for the inclusion or content of
any such restrictive legend on such Class A Common Stock; provided, however,
that the Trustee or any agent maintained for the purpose of such conversion
shall have provided, to the Company or to the Company's transfer agent for such
Class A Common Stock, prior to or concurrently with a request to the Company to
deliver such Class A Common Stock, written notice that the Securities delivered
for conversion are Restricted Securities.
In the case of any Security which is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company,
a new Security or Securities of authorized denominations in an aggregate
principal amount equal to the unconverted portion of the principal amount of
such Security. A Security may be converted in part, but only if (i) such
Security is a Registered Security of a denomination larger than U.S.$5,000 and
(ii) the principal amount of such Security both to be converted and to remain
Outstanding after such conversion is equal to U.S.$5,000 or any integral
multiple of $1,000 in excess thereof.
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If shares of Class A Common Stock to be issued upon conversion
of a Restricted Security, or Registered Securities to be issued upon conversion
of a Restricted Security in part only, are to be registered in a name other
than that of the beneficial owner of such Restricted Security, then such Holder
must deliver to the Conversion Agent a certificate in substantially the form
set forth in Section 311(c), dated the date of surrender of such Restricted
Security and signed by such beneficial owner, as to compliance with the
restrictions on transfer applicable to such Restricted Security. Neither the
Trustee nor any Conversion Agent, Registrar or Transfer Agent shall be required
to register in a name other than that of the beneficial owner shares of Class A
Common Stock or Registered Securities issued upon conversion of any such
Restricted Security not so accompanied by a properly completed certificate.
SECTION 1203. Fractions of Shares.
No fractional shares of Class A Common Stock shall be issued
upon conversion of any Security or Securities. If more than one Security shall
be surrendered for conversion at one time by the same Holder, the number of
full shares which shall be issuable upon conversion thereof shall be computed
on the basis of the aggregate principal amount of the Securities so
surrendered. Instead of any fractional share of Class A Common Stock which
would otherwise be issuable upon conversion of any Security or Securities, the
Company shall calculate and pay a cash adjustment in respect of such fraction
(calculated to the nearest one-100th of a share) in an amount equal to the same
fraction of the current market price per share of Class A Common Stock
(calculated in accordance with Section 1204(8) below) at the close of business
on the day of conversion. Such cash payments shall, in the case of a
conversion of Bearer Securities, be made to an address outside of the United
States.
SECTION 1204. Adjustment of Conversion Rate.
The Conversion Rate shall be subject to adjustments from time
to time as follows:
(1) In case at any time after the date hereof, the Company
shall pay or make a dividend or other distribution on any class of capital
stock of the Company in shares of its Class A Common Stock, the Conversion Rate
in effect at the opening of business on the day following the date fixed for
the determination of shareholders entitled to receive such dividend or other
distribution shall be increased by dividing
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such Conversion Rate by a fraction of which the numerator shall be the number
of shares of Class A Common Stock outstanding at the close of business on the
date fixed for such determination and the denominator shall be the sum of such
number of shares and the total number of shares constituting such dividend or
other distribution, such increase to become effective immediately after the
opening of business on the day following the date fixed for such determination.
For the purposes of this paragraph (8), the number of shares of Class A Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Class A Common Stock. The Company
will not pay any dividend or make any distribution on shares of Class A Common
Stock held in the treasury of the Company.
(2) In case at any time after the date hereof, the Company
shall issue rights or warrants to all holders of its Class A Common Stock (not
being available on an equivalent basis to Holders of the Securities upon
conversion) entitling them to subscribe for or purchase shares of Class A
Common Stock at a price per share less than the current market price per share
(determined as provided in paragraph (7) of this Section 1204) of the Class A
Common Stock on the date fixed for the determination of shareholders entitled
to receive such rights or warrants (other than pursuant to a dividend
reinvestment plan), the Conversion Rate in effect at the opening of business on
the day following the date fixed for such determination shall be increased by
dividing such Conversion Rate by a fraction of which the numerator shall be the
number of shares of Class A Common Stock outstanding at the close of business
on the date fixed for such determination plus the number of shares of Class A
Common Stock which the aggregate of the offering price of the total number of
shares of Class A Common Stock so offered for subscription or purchase would
purchase at such current market price and the denominator shall be the number
of shares of Class A Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Class A Common
Stock so offered for subscription or purchase, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this paragraph (2), the
number of shares of Class A Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but will include shares
issuable in respect of scrip certificates issued in lieu of fractions of shares
of Class A Common Stock. The Company will not issue any rights or warrants in
respect of shares of Class A Common Stock held in the treasury of the Company.
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(3) In case at any time after the date hereof, outstanding
shares of Class A Common Stock shall be subdivided into a greater number of
shares of Class A Common Stock, the Conversion Rate in effect at the opening of
business on the day following the day upon which suchsubdivision becomes
effective shall be proportionately increased, and, conversely, in case at any
time after the date hereof, outstanding shares of Class A Common Stock shall
each be combined into a smaller number of shares of Class A Common Stock, the
Conversion Rate in effect at the opening of business on the day following the
day upon which such combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(4) In case at any time after the date hereof the Company
shall, by dividend or otherwise, distribute to all holders of its Class A
Common Stock evidences of its indebtedness or assets (including stock or other
securities of the Company or any other issuer, but excluding any rights or
warrants referred to in paragraph (2) of this Section 1204, any dividend or
distribution paid exclusively in cash and any dividend or distribution referred
to in paragraph (1) of this Section 1204), the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the
date fixed for the determination of shareholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided in paragraph (8) of this Section 1204)
of the Class A Common Stock on the date fixed for such determination less the
then fair market value (each reference to "fair market value" in this Section
1204 shall mean the fair market value as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution
filed with the Trustee) of the portion of the assets or evidences of
indebtedness so distributed applicable to one share of Class A Common Stock and
the denominator shall be such current market price per share of the Class A
Common Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for the determination
of shareholders entitled to receive such distribution.
(5) In case (A) the Company shall, by dividend or otherwise,
other than quarterly dividends declared or paid in accordance with the
Company's practice as established from time to time, distribute to all holders
of its Class A Common Stock cash (excluding any cash that is distributed upon a
merger or consolidation to which Section 1211 applies or as
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part of a distribution referred to in paragraph (4) of this Section 1204) and
(B)(I) the total of (x) the aggregate amount of such cash distribution, (y) the
aggregate amount of any other distributions to all holders of its Class A
Common Stock made exclusively in cash within the 12 months preceding the date
of payment of such distribution and in respect of which no adjustment pursuant
to this paragraph (5) or paragraph (6) of this Section 1204 has been made
(other than quarterly dividends declared or paid in accordance with the
Company's practice as established from time to time) and (z) the aggregate of
any cash plus the fair market value of other consideration payable in respect
of any tender offers by the Company or any of its Subsidiaries for all or any
portion of the Class A Common Stock concluded within the 12 months preceding
the date of payment of such distribution and in respect of which no adjustment
pursuant to this paragraph (5) or paragraph (6) of this Section 1204 has been
made, exceeds (II) 10% of the product of the current market price per share
(determined as provided in paragraph (8) of this Section 1204) of the Class A
Common Stock on the date for the determination of holders of shares of Class A
Common Stock entitled to receive such distribution times the number of shares
of Class A Common Stock outstanding on such date, then, and in each such case,
immediately after the close of business on such date for determination, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by dividing the Conversion Rate in effect immediately prior to the
close of business on the date fixed for determination of the shareholders
entitled to receive such distribution by a fraction (i) the numerator of which
shall be equal to such current market price per share on the date fixed for
such determination less an amount equal to the quotient of (X) the sum of (I)
the total of the amounts referred to in subclauses (B)(I)(x) and (y) of this
paragraph (5) and (II) the aggregate of the excess of the amount referred to in
subclause (B)(I)(z) of this paragraph (5) for each tender offer so referred to
over the aggregate current market price of the shares of Class A Common Stock
purchased in such tender offer as of the Expiration Time (as hereinafter
defined) for such tender offer divided by (Y) the number of shares of Class A
Common Stock outstanding on such date for determination and (ii) the
denominator of which shall be equal to such current market price per share on
such date for determination.
(6) In case (A) a tender offer made by the Company or any
Subsidiary for all or any portion of the Class A Common Stock shall expire and
(B)(I) the total of (x) the fair market value of the aggregate consideration
required to be paid pursuant to such tender offer (as amended upon the
expiration thereof) to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender offer) of
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Purchased Shares (as defined below)), (y) the aggregate of the cash plus the
fair market value, as of the expiration of such tender offer, of consideration
payable in respect of any other tender offer, by the Company or any Subsidiary
for all or any portion of the Class A Common Stock expiring within the 12
months preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to this paragraph (6) or paragraph (5) of this Section 1204
has been made and (z) the aggregate amount of any distributions to all holders
of the Company's Class A Common Stock made exclusively in cash within 12 months
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to this paragraph (6) or paragraph (5) of this Section 1204
(other than quarterly dividends declared or paid in accordance with the
Company's practice as established from time to time) has been made, exceeds
(II) 10% of the product of the current market price per share of the Class A
Common Stock (determined as provided in paragraph (8) of this Section 1204) on
the date of the last time (the "Expiration Time") tenders could have been made
pursuant to such tender offer (as it may be amended) times the number of shares
of Class A Common Stock outstanding (including any tendered shares) on the
Expiration Time, then, and in each such case, immediately prior to the opening
of business on the day after the date of the Expiration Time, the Conversion
Rate shall be adjusted so that the same shall equal the price determined by
dividing the Conversion Rate immediately prior to close of business on the date
of the Expiration Time by a fraction (i) the numerator of which shall be equal
to (a) the product of (I) such current market price per share on the date of
the Expiration Time and (II) the number of shares of Class A Common Stock
outstanding (including any tendered shares) as of the Expiration Time less (b)
the total of the amounts referred to in Clause (B)(I) of this paragraph (6),
and (ii) the denominator of which shall be equal to the product of (a) such
current market price per share on the date of the Expiration Time and (b) the
number of shares of Class A Common Stock outstanding (including any tendered
shares) as of the Expiration Time less the number of all shares validly
tendered 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").
(7) The reclassification of Class A Common Stock into
securities including other than Class A Common Stock (other than any
reclassification upon a consolidation or merger to which Section 1211 applies)
shall be deemed to involve (a) a distribution of such securities other than
Class A Common Stock to all holders of Class A Common Stock (and the effective
date of such reclassification shall be deemed to be "the date fixed for the
determination of shareholders entitled to receive such distribution" and "the
date fixed for such
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determination" within the meaning of paragraph (4) of this Section 1204), and
(b) a subdivision or combination, as the case may be, of the number of shares
of Class A Common Stock outstanding immediately prior to such reclassification
into the number of shares of Class A Common Stock outstanding immediately
thereafter (and the effective date of such reclassification shall be deemed to
be "the day upon which such subdivision becomes effective" or "the day upon
which such combination becomes effective", as the case may be, and "the day
upon which such subdivision or combination becomes effective" within the
meaning of paragraph (3) of this Section 1204).
(8) For the purpose of any computation under paragraphs (2),
(4), (5) or (6) of this Section 1204, the current market price per share of
Class A Common Stock on any date shall be deemed to be the average of the daily
Closing Prices Per Share for the five consecutive Trading Days selected by the
Company commencing not more than 10 Trading Days before, and ending not later
than, the earlier of the day in question and the day before the "ex" date with
respect to the issuance or distribution requiring such computation. For
purposes of this paragraph, the term "'ex' date", when used with respect to any
issuance or distribution, means the first date on which the Class A Common
Stock trades regular way on the applicable securities exchange or in the
applicable securities market without the right to receive such issuance or
distribution.
(9) No adjustment in the Conversion Rate shall be required
unless such adjustment (plus any adjustments not previously made by reason of
this paragraph (9)) would require an increase or decrease of at least one
percent in such rate; provided, however, that any adjustments which by reason
of this paragraph (9) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Article shall be made to the nearest cent or to the nearest one-thousandth of a
share, as the case may be.
(10) The Company may make such increases in the Conversion
Rate, for the remaining term of the Securities or any shorter term, in addition
to those required by paragraphs (1), (2), (3), (4), (5) and (6) of this Section
1204, as it considers to be advisable in order to avoid or diminish any income
tax to any holders of shares of Class A Common Stock resulting from any
dividend or distribution of stock or issuance of rights or warrants to purchase
or subscribe for stock or from any event treated as such for income tax
purposes or for any other reasons. The Company shall have the power to resolve
any ambiguity or correct any error in this
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paragraph (10) and its actions in so doing shall be final and conclusive.
SECTION 1205. Notice of Adjustments of Conversion Rate.
Whenever the Conversion Rate is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Rate in
accordance with Section 1204 and shall prepare a certificate signed by
the principal financial officer, Treasurer of the Company setting
forth the adjusted Conversion Rate and showing in reasonable detail
the facts upon which such adjustment is based, and such certificate
shall forthwith promptly be filed with the Trustee and with each
Conversion Agent; and
(2) a notice stating that the Conversion Rate has been
adjusted and setting forth the adjusted Conversion Rate shall
forthwith be required, and as soon as practicable after it is
required, such notice shall be provided by the Company to all Holders
in accordance with Section 105.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate, except to exhibit the same
to any Holder of Securities desiring inspection thereof at its office during
normal business hours.
SECTION 1206. Notice of Certain Corporate Action.
In case:
(1) the Company shall declare a dividend (or any other
distribution) on its Class A Common Stock payable otherwise than in
cash out of its earned surplus; or
(2) the Company shall authorize the granting to the holders
of its Class A Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other
rights; or
(3) (a) of any reclassification of the Class A Common Stock
of the Company, or (b) of any consolidation, merger or share exchange
to which the Company is a party and for which approval of any
shareholders of the Company is required, or (c) of any tender offer by
the Company or any Subsidiary for all or any portion of the Class A
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Common Stock, or (d) of the conveyance, transfer, sale or lease of
all or substantially all of the assets of the Company; or
(4) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed at each office or agency maintained
for the purpose of conversion of Securities pursuant to Section 1002, and
shall cause to be provided to all Holders in accordance with Section 105, at
least 20 days (or 10 days in any case specified in clause (1), (2) or (3)(c)
above) prior to the applicable record, expiration or effective date
hereinafter specified, a notice stating (x) the date on which a record is to
be taken for the purpose of such dividend, distribution, rights or warrants,
or, if a record is not to be taken, the effective date as of which the holders
of Class A Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, (y) the date on
which the right to make tenders under such tender offer expires or (z)
the date on which such reclassification, consolidation, merger, share
exchange, conveyance, transfer, sale, lease, dissolution, liquidation or
winding up is expected to become effective, and the date as of which it is
expected that holders of Class A Common Stock of record shall be entitled to
exchange their shares of Class A Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger,
share exchange, conveyance, transfer, sale, lease, dissolution, liquidation
or winding up. Neither the failure to give such notice or the notice
referred to in the following paragraph nor any defect therein shall affect the
legality or validity of the proceedings described in clauses (1) through (4) of
this Section 1206. If at the time the Trustee shall not be the conversion
agent, a copy of such notice and any notice referred to in the following
paragraph shall also forthwith be filed by the Company with the Trustee.
The preceding paragraph to the contrary notwithstanding,
the Company shall cause to be filed at each office or agency maintained
for the purpose of conversion of Securities pursuant to Section 1002, and
shall cause to be provided to all Holders in accordance with Section 105,
notice of any tender offer by the Company or any Subsidiary for all or any
portion of the Class A Common Stock at or about the time that such notice of
tender offer is provided to the public generally.
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SECTION 1207. Company to Reserve Class A Common Stock.
The Company shall at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued Class A
Common Stock, for the purpose of effecting the conversion of Securities,
the full number of shares of Class A Common Stock then issuable upon the
conversion of all Outstanding Securities.
SECTION 1208. Taxes on Conversions.
Except as provided in the next sentence, the Company will pay
any and all taxes and duties that may be payable in respect of the issue or
delivery of shares of Class A Common Stock on conversion of Securities
pursuant hereto. A Holder delivering a Security for conversion will be
required to pay (i) any tax or duty which may be payable in respect of any
transfer involved in the issue and delivery of shares of Class A Common Stock
in a name other than that of the Holder of the Security or Securities to be
converted, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such
tax or duty, or has established to the satisfaction of the Company that such
tax or duty has been paid; or (ii) any tax arising under Section 897 or 1445
of the Code without receiving any Additional Amounts with respect thereto,
and conversion shall be made only upon delivery to the Company of a
certification by the Holder in substantially the form of Section 206 as to
whether the Security surrendered in connection with such conversion is a
"United States real property interest", as defined in the Code with respect
to the beneficial owner of the Security being surrendered. Subject to
Section 601 of the Indenture, neither the Trustee nor any Conversion Agent
shall have any responsibility with respect to any such tax, and the Company
agrees to indemnify, defend and hold harmless the Trustee and any Conversion
Agent against any liability of the Trustee or any Conversion Agent in respect
of Section 897 or 1445 of the Code.
SECTION 1209. Agreements as to Class A Common Stock.
The Company agrees that all shares of Class A Common Stock
which may be delivered upon conversion of Securities, upon such delivery,
will have been duly authorized and validly issued and will be fully paid and
nonassessable and, except as provided in Section 1208, the Company will pay
all taxes, liens and charges with respect to the issue thereof.
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No class of the Company's common stock (other than the Class
B Common Stock) shall have voting rights that are proportionately greater per
share than those of any class of capital stock issuable on any conversion of
the Securities pursuant hereto, and all classes of which shares are so
issuable on any such conversion shall have voting rights.
The Company agrees that it will not amend the second
paragraph of Article 4 of its Restated Certificate of Incorporation, as
amended as of the date of this instrument as originally executed, if, as a
result of such amendment, (a) the Company could (i) pay dividends to the
holders of the Class B Common Stock without paying to the holders of the Class
A Common Stock a dividend per share at least equal to the dividend per share
paid to holders of the Class B Common Stock, (ii) make a share distribution
other than a share distribution permitted by the first sentence of clause b of
such paragraph, or (iii) reclassify, subdivide or combine one class of its
common stock without reclassifying, subdividing or combining the other class
of common stock, on an equal per share basis, (b) the holders of Class A
Common Stock would have less than one-tenth of a vote per share or the holders
of Class B Common Stock would have more than one vote per share, (c) the
holders of Class A Common Stock and the holders of Class B Common Stock would
not share equally, on a share for share basis, in any distribution of the
Company's assets upon any liquidation, dissolution or winding up of the
Company or would not have equal rights, on a share for share basis, in the
event of any merger or consolidation of the Company in which shares of
common stock of the Company are converted into cash, securities or other
property, or (d) a share of Class A Common Stock could be converted into
less than one share of Class B Common Stock or a share of Class B Common
Stock could be converted into more than one share of Class A Common Stock.
SECTION 1210. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered
to the Trustee or the Principal Paying Agent or its agent to be cancelled by
or at the direction of the Trustee, which shall dispose of the same as provided
in Section 309.
SECTION 1211. Provision in Case of Consolidation, Merger or
Conveyance of Assets.
In case of any consolidation of the Company with, or merger
of the Company into, any other Person, any merger of another Person into the
Company (other than a merger which does not result in any reclassification,
conversion, exchange
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or cancellation of outstanding shares of Class A Common Stock of the
Company) or any conveyance, transfer, sale or lease of all or
substantially all of the properties and assets of the Company, 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 providing that the Holder of each Security then
Outstanding shall have the right thereafter, during the period such Security
shall be convertible as specified in Section 1201, to convert such Security
only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance, transfer, sale or
lease by a holder of the number of shares of Class A Common Stock of the
Company into which such Security might have been converted immediately prior
to such consolidation, merger, conveyance, transfer, sale or lease, assuming
such holder of Class A Common Stock of the Company (i) is not a Person with
which the Company consolidated or into which the Company merged or which
merged into the Company or to which such conveyance, transfer, sale or
lease was made, as the case may be ("Constituent Person"), or an Affiliate
of a Constituent Person and (ii) failed to exercise his rights of election, if
any, as to the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance, transfer, sale or
lease (provided that if the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, transfer, sale
or lease is not the same for each share of Class A Common Stock of the
Company held immediately prior to such consolidation, merger, conveyance,
transfer, sale or lease by others than a Constituent Person or an Affiliate
thereof and in respect of which such rights of election shall not have been
exercised ("Non-electing Share"), then for the purpose of this Section 1211
the kind and amount of securities, cash and other property receivable upon
such consolidation, merger, conveyance, transfer, sale or lease by the
holders of each Non-electing Share shall be deemed to be the kind and amount so
receivable per share by a plurality of the Non-electing Shares). Such
supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in
this Article. The above provisions of this Section 1211 shall similarly apply
to successive consolidations, mergers, conveyances, transfers, sales or
leases. Notice of the execution of such a supplemental indenture shall be
given by the Company to the Holder of each Security as provided in Section
105 promptly upon such execution.
Neither the Trustee, any Paying Agent nor any Conversion Agent
shall be under any responsibility to
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determine the correctness of any provisions contained in any such
supplemental indenture relating either to the kind or amount of shares of
stock or other securities or property or cash receivable by Holders of
Securities upon the conversion of their Securities after any such
consolidation, merger, conveyance, transfer, sale or lease or to any such
adjustment, but may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, an Opinion of Counsel
with respect thereto, which the Company shall cause to be furnished to the
Trustee upon request.
SECTION 1212. Responsibility of Trustee for Conversion
Provisions.
The Trustee, subject to the provisions of Section 601, and
any Conversion Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts
exist which may require any adjustment of the Conversion Rate, or with
respect to the nature or extent 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, or whether a supplemental
indenture need be entered into. Neither the Trustee, subject to the
provisions of Section 601, nor any Conversion Agent shall be accountable with
respect to the validity or value (or the kind or amount) of any Common Stock,
or of any other securities or property or cash, which may at any time be
issued or delivered upon the conversion of any Security; and it or they do
not make any representation with respect thereto. Neither the Trustee,
subject to the provisions of Section 601, nor any Conversion Agent shall be
responsible for any failure of the Company to make or calculate any cash
payment or to issue, transfer or deliver any shares of Common Stock or
share certificates or other securities or property or cash upon the surrender
of any Security for the purpose of conversion; and the Trustee, subject to
the provisions of Section 601, and any Conversion Agent shall not be
responsible for any failure of the Company to comply with any of the covenants
of the Company contained in this Article.
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ARTICLE THIRTEEN
SUBORDINATION
SECTION 1301. Securities Subordinated to Senior Debt.
The Company covenants and agrees, and each Holder of a
Security, by his acceptance thereof, likewise covenants and agrees, that, to
the extent and in the manner hereinafter set forth in this Article (subject
to the provisions of Article Four), the payment of the principal of and
interest on each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of
all Senior Debt.
SECTION 1302. Payment Over of Proceeds Upon Dissolution,
Etc.
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to
its creditors, as such, or to its assets, or (b) any liquidation,
dissolution or other winding up of the Company, whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy, or (c)
any assignment for the benefit of creditors or any other marshalling of
assets and liabilities of the Company, then and in any such event specified
in (a), (b) or (c) above (each such event, if any, herein sometimes referred
to as a "Proceeding") the holders of Senior Debt shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Debt, or provision shall be made for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Debt, before the Holders of the Securities are entitled to receive any
payment or distribution of any kind or character, whether in cash,
property or securities, on account of principal of or interest on the
Securities or on account of any purchase or other acquisition of Securities
by the Company or any Subsidiary of the Company (all such payments,
distributions, purchases and acquisitions herein referred to, individually
and collectively, as a "Securities Payment"), and to that end the holders of
all Senior Debt shall be entitled to receive, for application to the payment
thereof, any Securities Payment which may be payable or deliverable in respect
of the Securities in any such Proceeding.
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In the event that, notwithstanding the foregoing provisions
of this Section, the Trustee or the Holder of any Security shall have
received any Securities Payment before all Senior Debt is paid in full or
payment thereof provided for in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Debt, and if such fact shall, at
or prior to the time of such Securities Payment, have been made known to the
Trustee or, as the case may be, such Holder, then and in such event such
Securities Payment shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or
other Person making payment or distribution of assets of the Company for
application to the payment of all Senior Debt remaining unpaid, to the extent
necessary to pay all Senior Debt in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt.
For purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or
securities" shall not be deemed to include a payment or distribution of
stock or securities of the Company provided for by a plan of reorganization
or readjustment authorized by an order or decree of a court of competent
jurisdiction in a reorganization proceeding under any applicable bankruptcy
law or of any other corporation provided for by such plan of reorganization or
readjustment which stock or securities are subordinated in right of payment to
all then outstanding Senior Debt to substantially the same extent as the
Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into,
another Person or the liquidation or dissolution or the Company following
the conveyance, transfer, sale or lease of all or substantially all of its
properties and assets to another Person upon the terms and conditions set
forth in Article Seven shall not be deemed a Proceeding for the purposes of
this Section if the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer, sale or
lease such properties and assets, as the case may be, shall, as a part of such
consolidation, merger, conveyance, transfer, sale or lease comply with the
conditions set forth in Article Seven.
SECTION 1303. No Payment When Senior Debt in Default.
In the event that any Senior Payment Default (as defined
below) shall have occurred and be continuing, then no Securities Payment
shall be made unless and until such Senior Payment Default shall have been
cured or waived or shall have ceased to exist or all amounts then due and
payable in respect
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of Senior Debt to which such Senior Payment Default relates shall have been
paid in full, or provision shall have been made for such payment in cash or
cash equivalents or otherwise in a manner satisfactory to the holders of
Senior Debt. "Senior Payment Default" means any default in the payment of
principal of or interest on any Senior Debt.
In the event that any Senior Nonmonetary Default (as defined
below) shall have occurred and be continuing, then, upon the receipt by the
Company and the Trustee of written notice of such Senior Nonmonetary
Default from any Permitted Holder of Senior Debt, no Securities Payment
shall be made until such Senior Nonmonetary Default shall have been cured or
waived or shall have ceased to exist and any acceleration of Senior Debt
shall have been rescinded or annulled or the Senior Debt to which such
Senior Nonmonetary Default relates shall have been discharged. "Senior
Nonmonetary Default" means the occurrence or existence and continuance of any
event of default, or of any event which, after notice or lapse of time (or
both), would become an event of default, under the terms of any instrument
pursuant to which any Senior Debt is outstanding, permitting (whether
immediately or after notice or lapse of time or both) one or more holders of
such Senior Debt (or a trustee or agent on behalf of the holders thereof)
to declare such Senior Debt due and payable prior to the date on which it
would otherwise become due and payable, other than a Senior Payment Default.
In the event that, notwithstanding the foregoing, the Company
shall make any Securities Payment to the Trustee or any Holder prohibited by
the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such Securities Payment, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such Securities
Payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any
Securities Payment with respect to which Section 1302 would be
applicable.
SECTION 1304. Payment Permitted If No Default.
Nothing contained in this Article or in any of the Securities
insofar as they incorporate the provisions of this Article shall prevent (a)
the Company, at any time except during the pendency of any Proceeding referred
to in Section 1302 or under the conditions described in Section 1303, from
making Securities Payments, or (b) the application by the Trustee of any money
deposited with it hereunder to Securities
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Payments or the retention of such Securities Payment by the Holders, if, at
the time of such application by the Trustee, the Trustee did not have
knowledge that such Securities Payment would have been prohibited by the
provisions of this Article.
SECTION 1305. Subrogation to Rights of Holders of Senior
Debt.
Subject to the payment in full of all amounts due or to
become due on or in respect of Senior Debt, or the provision for such payment
in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, the Holders of the Securities shall be subrogated to
the rights of the holders of such Senior Debt to receive payments and
distributions of cash, property and securities applicable to the Senior Debt
until the principal of and interest on the Securities shall be paid in full.
For purposes of such subrogation, no payments or distributions to the holders
of the Senior Debt of any cash, property or securities to which the Holders
of the Securities or the Trustee would be entitled except for the provisions
of this Article, and no payments over pursuant to the provisions of this
Article to the holders of Senior Debt by Holders of the Securities or the
Trustee, shall, as among the Company, its creditors other than holders of
Senior Debt and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Debt.
SECTION 1306. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely
for the purpose of defining the relative rights of the Holders on the one
hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended
to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Debt and the Holders of the Securities, the obligation of
the Company, which is absolute and unconditional (and which, subject to the
rights under this Article of the holders of Senior Debt, is intended to rank
equally with all other general obligations of the Company), to pay to the
Holders of the Securities the principal of and interest on the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than the holders of Senior Debt;
or (c) prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable
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law upon default under this Indenture, subject to the rights, if any,
under this Article of the holders of Senior Debt to receive cash, property
and securities otherwise payable or deliverable to the Trustee or such Holder.
SECTION 1307. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such action as may
be necessary or appropriate to effectuate the subordination provided in this
Article and appoints the Trustee his attorney-in-fact for any and all such
purposes.
SECTION 1308. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt
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 any such holder may
have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
or the obligations hereunder of the Holders of the Securities to the holders
of Senior Debt, do any one or more of the following: (i) amend or supplement
in any manner Senior Debt or any instrument evidencing the same or any
agreement under which Senior Debt is outstanding; (ii) sell, exchange, release
or otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Debt; (iii) release any Person liable in any manner for the collection
of Senior Debt; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.
SECTION 1309. Notice to Trustee.
The Company shall give prompt written notice to the Trustee
of any fact known to the Company which would prohibit the making of any
payment to or by the Trustee in respect of the Securities. Notwithstanding
the provisions of this Article or any other provision of this Indenture, the
Trustee
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shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment to or by the Trustee in respect of
the Securities, unless and until the Trustee shall have received written
notice thereof from the Company or a holder of Senior Debt or from any
trustee therefor or representative thereof; and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of Section 601,
shall be entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of or interest on
any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date.
Subject to the provisions of Section 601, the Trustee 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 Debt (or a trustee therefor or
representative thereof) to establish that such notice has been given by a
holder of Senior Debt (or a trustee therefor or representative thereof). 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 Debt
to participate in any payment or distribution pursuant to this Article, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 1310. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Section
601, and the Holders of the Securities shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in
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bankruptcy, receiver, liquidating trustee, custodian, assignee for the
benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for
the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of the Senior Debt 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.
SECTION 1311. Trustee Not Fiduciary for Holders of Senior
Debt.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Debt and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other Person cash, property or
securities to which any holders of Senior Debt shall be entitled by virtue of
this Article or otherwise.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article and no implied
covenants or obligations with respect to holders of Senior Debt shall be read
into this Indenture against the Trustee.
SECTION 1312. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Debt
which may at any time be held by it, to the same extent as any other holder
of Senior Debt, and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 607.
SECTION 1313. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then acting
hereunder, the term "Trustee" as used in this Article shall in such case
(unless the context otherwise requires) be construed as extending to and
including such Paying Agent
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within its meaning as fully for all intents and purposes as if such Paying
Agent were named in this Article in addition to or in place of the Trustee;
provided, however, that Section 1312 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.
SECTION 1314. Certain Conversions Deemed Payment.
For the purposes of this Article only, (1) the issuance and
delivery of junior securities upon conversion of Securities in accordance
with Article Twelve shall not be deemed to constitute a Securities Payment
and (2) the payment, issuance or delivery of cash, property or securities
(other than junior securities) upon conversion of a Security shall be deemed
to constitute a Securities Payment. For the purposes of this Section, the
term "junior securities" means shares of any common stock. Nothing contained
in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its creditors other than
holders of Senior Debt and the Holders of the Securities, the right, which
is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article Twelve.
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ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A RISK EVENT
SECTION 1401. Right to Require Repurchase.
In the event that a Risk Event (as hereinafter defined)
shall occur, then each Holder shall have the right, at the Holder's option,
to require the Company to repurchase, and upon the exercise of such right
the Company shall repurchase, all of such Holder's Securities, or any
portion of the principal amount thereof that is an integral multiple of
U.S.$5,000 (provided that no single Bearer Security may be repurchased in
part, and no single Registered Security may be repurchased in part unless
the portion of the principal amount of such Registered Security to be
Outstanding after such repurchase is equal to U.S.$5,000 or integral
multiples of U.S.$1,000 in excess thereof), on the date (the "Repurchase
Date") that is 45 days after the date of the Company Notice (as defined in
Section 1402) for cash in Dollars at a purchase price equal to 100% of the
principal amount plus interest accrued to the Repurchase Date (the
"Repurchase Price"); provided however that installments of interest on
Bearer Securities whose Stated Maturity is on or prior to the Repurchase
Date shall be payable only upon presentation and surrender of coupons for such
interest (at an office or agency outside the United States, except as
otherwise provided in the form of Bearer Security set forth in Section
202(a)); provided further that installments of interest on Registered
Securities whose Stated Maturity is on or prior to the Repurchase Date
shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Record Date
according to their terms and the provisions of Section 307; and provided,
further, that payments of the Repurchase Price plus accrued interest, if any,
upon repurchase of any Security shall be made only upon delivery to the
Company of a certification by the Holder in substantially the form of
Section 311(b) as to whether the Security surrendered in connection with
such redemption is a "United States real property interest", as defined in the
United States Internal Revenue Code of 1986, as amended, with respect to the
beneficial owner of the Security being surrendered. Subject to Section 601 of
the Indenture, neither the Trustee nor any Paying Agent shall have any
responsibility with respect to any tax referred to in such certification, and
the Company agrees to indemnify, defend and hold harmless the Trustee and any
Paying Agent against any liability of the Trustee or any Paying Agent in
respect of Section 897 or 1445 of the Internal Revenue Code of 1986, as
amended. Such right
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<PAGE> 171
to require the repurchase of the Securities shall not continue after a
discharge of the Company from its obligations with respect to the
Securities in accordance with Article Four, unless a Risk Event shall have
occurred prior to such discharge. Whenever in this Indenture (including
Sections 202, 301, 501(2) and 508) there is a reference, in any context, to
the principal of any Security as of any time, such reference shall be deemed
to include reference to the Repurchase Price payable in respect of such
Security to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Indenture shall not be construed as excluding the Repurchase
Price in those provisions of this Indenture when such express mention is not
made.
SECTION 1402. Notices; Method of Exercising
Repurchase Right, Etc.
(a) Unless the Company shall have theretofore called for
redemption all of the Outstanding Securities, on or before the 30th day after
the occurrence of a Risk Event, the Company or, at the request of the Company
on or before the 15th day after such occurrence, the Trustee, shall give to
all Holders of Securities, in the manner provided in Section 105 notice (the
"Company Notice") of the occurrence of the Risk Event and of the repurchase
right set forth herein arising as a result thereof. The Company shall also
deliver a copy of such notice of a repurchase right to the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price, and accrued interest, if any,
(4) a description of the procedure which a Holder must follow
to exercise a repurchase right, and
(5) that on the Repurchase Date the Repurchase Price, and
accrued interest, if any, will become due and payable upon each such
Security designated by the Holder to be repurchased, and that interest
thereon shall cease to accrue on and after said date,
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<PAGE> 172
(6) the Conversion Rate, the date on which the right to
convert the Securities to be repurchased will terminate and the
places where such Securities, together with all unmatured coupons
and any matured coupons in default appertaining thereto, may be
surrendered for conversion,
(7) the place or places that the certificate required by
Section 202 and Section 1401 shall be delivered, and the form of
such certificate, and
(8) the place or places where such Securities, together
with all coupons appertaining thereto, if any, maturing after the
Repurchase Date, are to be surrendered for payment of the Repurchase
Price and accrued interest, if any.
No failure of the Company to give the foregoing notices
or defect therein shall limit any Holder's right to exercise a repurchase
right or affect the validity of the proceedings for the repurchase of
Securities.
If any of the foregoing provisions or other provisions of
this Article are inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall deliver
to the Trustee or any Paying Agent on or before the 30th day after the date of
the Company Notice (i) written notice of the Holder's exercise of such right,
which notice shall set forth the name of the Holder, the principal amount of
the Securities to be repurchased (and, if any Registered Security is to
repurchased in part, the serial number thereof, the portion of the principal
amount thereof to be repurchased and the name of the Person in which the
portion thereof to remain Outstanding after such repurchase is to be
registered) and a statement that an election to exercise the repurchase right
is being made thereby, and (ii) the Securities with respect to which the
repurchase right is being exercised, together with all coupons, if any,
appertaining thereto maturing after the Repurchase Date; provided, however,
that Bearer Securities shall be delivered only to an office of a Paying Agent
located outside the United States except in the limited circumstances
described in Section 1003. Such written notice shall be irrevocable, except
that the right of the Holder to convert the Securities with respect to
which the repurchase right is being exercised shall continue until the
close of business on the fifth Trading Day preceding the Repurchase Date.
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<PAGE> 173
(c) In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be paid to
the Trustee or the Principal Paying Agent the Repurchase Price in cash, for
payment to the Holder on the Repurchase Date, together with accrued and
unpaid interest to the Repurchase Date payable with respect to the
Securities as to which the purchase right has been exercised (subject to
the provisions of Article Thirteen); provided, however, that Bearer
Securities shall be so payable only at an office or agency outside the United
States (except as otherwise provided in the form of Definitive Security set
forth in Section 202(a)).
(d) If any Bearer Security surrendered for repurchase shall
not be accompanied by all appurtenant coupons maturing after the Repurchase
Date, such Security may be paid after deducting from the Repurchase Price an
amount equal to the face amount of all such missing coupons or the surrender
of such missing coupons or coupon may be waived by the Company and the
Trustee, if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Bearer Security shall surrender to any Paying Agent any such
missing coupon in respect of which a deduction shall have been made from the
Repurchase Price, if any, such Holder shall be entitled to receive the amount
so deducted; provided, however, that interest represented by coupons shall be
payable only upon presentation and surrender of those coupons at an office or
agency located outside of the United States (except as otherwise provided in
the form of Definitive Security set forth in Section 202(a)).
(e) If any Security (or portion thereof) surrendered for
repurchase shall not be so paid on the Repurchase Date, the principal
amount of such Security (or portion thereof, as the case may be) shall,
until paid, bear interest from the Repurchase Date at the rate of 5 1/2% per
annum, and each Security shall remain convertible into Class A Common Stock
until the principal of such Security (or portion thereof, as the case may be)
shall have been paid or duly provided for.
(f) Any Registered Security which is to be repurchased only
in part shall be surrendered to the Trustee (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Registered Security without service charge, a new Registered Security or
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<PAGE> 174
Registered Securities, containing identical terms and conditions, each of the
authorized denomination in aggregate principal amount equal to and in exchange
for the unrepurchased portion of the principal of the Registered Security so
surrendered.
SECTION 1403. Certain Definitions.
For purposes of this Article Fourteen,
(a) the term "beneficial owner" shall be determined in
accordance with Rule 13d-3 promulgated by the Commission pursuant to the
Exchange Act, as in effect on the date of the original execution of this
Indenture,;
(b) the term "Person" shall include any syndicate or group
which would be deemed to be a "person" under Section 13(d)(3) of the Exchange
Act, as in effect on the date of the original execution of this Indenture;
(c) the term "Quoted Price" of the Class A Common Stock on
any Trading Day shall mean the Closing Price Per Share of the Class A Common
Stock on such Trading Day;
(d) a "Risk Event" shall be deemed to have occurred at such
time as:
(i) any Person (other than the Company, any
Subsidiary of the Company or any employee
benefit plan of the Company and other than
(x) Leonard H. Lavin, Bernice E. Lavin,
Carol L. Bernick, Howard B. Bernick, their
estates, trusts for their benefit or Persons
controlled by any of the foregoing or (y)
any such syndicate or group which includes
any person or entity referred to in the
previous clause (x)) is or becomes the
beneficial owner, directly or indirectly,
through a purchase, merger or other
acquisition transaction or series of
transactions, of shares of capital stock of
the Company entitling such Person to
exercise 50% or more of the total voting
power of all shares of capital stock of the
Company entitled to vote generally in the
elections of directors; or
(ii) there occurs any consolidation of the Company
with, or merger of the Company
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<PAGE> 175
into, any other Person, any merger of
another Person into the Company, or
any sale or transfer of all or
substantially all of the assets
of the Company to another Person
(other than (a) any such
transaction pursuant to which the
holders of the Class A and Class B
Common Stock immediately prior to
such transaction have, directly or
indirectly, at least a majority of
the common equity of the continuing
or surviving corporation
immediately after such transaction
and (b) any merger (x) which does
not result in any reclassification,
conversion, exchange or
cancellation of outstanding shares
of Class A or Class B Common Stock
or (y) which is effected solely to
change the jurisdiction of
incorporation of the Company and
results in a reclassification,
conversion or exchange of
outstanding shares of Class A or
Class B Common Stock into solely
shares of Class A or Class B Common
Stock;
provided, however, that a Risk Event with respect to the Securities shall not
be deemed to have occurred if either (A) the Quoted Price on any five Trading
Days during the 10 Trading Day period immediately preceding the date of
the Risk Event shall equal or exceed 105% of the Conversion Price in
effect on each such Trading Day or (B) with respect to clause (ii) above, all
the consideration (excluding cash payments for fractional shares) in the
transaction or transactions constituting the Risk Event consists of shares of
common stock traded on a national securities exchange or quoted on the
Nasdaq National Market and as a result of such transaction or transactions
the Securities become convertible solely into such common stock. The
"Conversion Price" shall equal U.S.$1,000 divided by the Conversion Rate.
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<PAGE> 176
ARTICLE FIFTEEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1501. Company to Furnish Trustee Names and
Addresses of Holders.
The Company will furnish or cause to be furnished to the
Trustee:
(a) semi-annually, not more than 15 days after the
Regular Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of
Registered Securities as of such Regular Record Date, and
(b) at such other times as the Trustee may reasonably
request in writing, within 30 days after the receipt by the Company
of any such request, a list of similar form and content as of a date
not more than 15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 1502. Preservation of Information.
The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 1501 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it
pursuant to Section 1501 upon receipt of a new list so furnished.
_____________________
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
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<PAGE> 177
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 the day and year first above written.
ALBERTO-CULVER COMPANY
By_______________________________
Name:
Title:
[SEAL]
Attest:
______________________________
Name:
Title:
BANKERS TRUST COMPANY
By_________________________
Name:
Title:
[SEAL]
Attest:
______________________________
Name:
Title:
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<PAGE> 178
STATE OF ILLINOIS )
: ss.:
COUNTY OF COOK )
On the _____________________________, 1995, before me
personally came ________________, to me known, who, being by me duly sworn,
did depose and say that he is __________________ of Alberto-Culver Company,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation; and that he signed his name
thereto by like authority.
______________________________
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the _____________________________, 1995, before me
personally came ________________, to me known, who, being by me duly sworn,
did depose and say that he is __________________ of Bankers Trust Company,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation; and that he signed his name
thereto by like authority.
______________________________
Notary Public
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<PAGE> 1
EXHIBIT 10(b)
ALBERTO-CULVER COMPANY
EMPLOYEE STOCK OPTION PLAN OF 1988
(as amended through September 6, 1995)
1. PURPOSE OF ACSOP
The Alberto-Culver Company Employee Stock Option Plan of 1988
(hereinafter called the "ACSOP") is intended to encourage ownership of the
Class A common stock of Alberto-Culver Company (hereinafter called the
"Company") by eligible key employees of the Company and its subsidiaries and to
provide incentives for them to make maximum efforts for the success of the
business. Options granted under the ACSOP will be non-qualified options (not
incentive options as defined in Section 422 of the Internal Revenue Code of
1986, as amended).
2. ELIGIBILITY
Key employees of the Company and its subsidiaries who perform services
which contribute materially to the management, operation and development of the
business ("Optionees") will be eligible to receive options under the ACSOP. At
their request, Mr. Leonard H. Lavin and Mrs. Bernice E. Lavin are ineligible
to receive options under the ACSOP.
3. ADMINISTRATION
The Board of Directors of the Company (hereinafter called the "Board")
shall have full power and authority, subject to the express provisions of the
ACSOP, to determine the purchase price of the stock covered by each option, the
Optionees to whom and the time or times at which options shall be granted, the
terms and conditions of the options, including the terms of payment therefor,
and the number of shares of stock to be covered by each option. The Board
shall have full power to construe, administer and interpret the ACSOP, and full
power to adopt such rules and regulations as the Board may deem desirable to
administer the ACSOP, and no member of the Board shall be liable for any action
or determination made in good faith with respect to the ACSOP or any option
thereunder.
The Board may, in its discretion, delegate to a committee of members
of the Board its authority with respect to such matters under the ACSOP and
options granted under the ACSOP as the Board may specify.
<PAGE> 2
4. NUMBER OF SHARES OF STOCK TO BE OFFERED
The Board may authorize from time to time the issuance pursuant to the
ACSOP of shares not to exceed 3,200,000 of the Company's Class A common stock
in the aggregate, subject to adjustment under paragraph 10 hereof. Such shares
of Class A common stock which may be issued pursuant to options granted under
the ACSOP may be authorized and unissued shares or issued and reacquired shares
as the Board from time to time may determine. If any option granted under the
ACSOP shall terminate or be surrendered or expire unexercised in whole or in
part, the shares of stock so released from such option may be made the subject
of additional options granted under the ACSOP.
5. OPTION PRICE
The purchase price under each option granted pursuant to the ACSOP
shall be determined by the Board but shall not be less than the fair market
value of the Company's Class A common stock at the time the option is granted.
6. GRANT OF OPTIONS
No option may be granted under the ACSOP after January 20, 2003. In
addition, the Board may not grant to any individual Optionee in any fiscal year
an option or options with respect to more than 150,000 shares of Class A common
stock.
7. TERM AND EXERCISE OF OPTIONS
(a) Each option granted shall provide that it is not exercisable
after the expiration of ten (10) years from the date the option is granted, and
each option shall be subject to the following limitations upon its exercise:
(i) No option may be exercised until the expiration of one (1)
year following the grant of the option.
(ii) On the anniversary date of the grant of the option in each of
the four calendar years immediately following the year of the
grant of the option, the right to purchase twenty-five percent
(25%) of the total number of shares of stock specified in the
option shall accrue to the Optionee. Each such right to
purchase such twenty-five percent (25%) may be exercised, in
whole or in part, at any time after such right accrues and
prior to the expiration of ten (10) years from the date of the
grant of the option.
(b) Notwithstanding the foregoing, the Board may in its discretion
(i) specifically provide at the date of grant for another time or times of
exercise; (ii) accelerate the exercisability of any option subject to such
terms and conditions as the Board deems necessary and appropriate to effectuate
the purpose of the ACSOP including, without limitation, a requirement that the
Optionee grant to the Company an option to repurchase all or a portion of the
number of shares acquired upon exercise of the accelerated option for their
fair market value on the date of grant; or (iii) at any time prior to the
expiration
2
<PAGE> 3
or termination of any option previously granted, extend the term of any option
(including such options held by officers or directors) for such additional
period as the Board, in its discretion, shall determine. In no event, however,
shall the aggregate option period with respect to any option, including the
original term of the option and any extensions thereof, exceed ten years.
(c) An option may be exercised by giving written notice to the
Secretary of the Company specifying the number of shares to be purchased,
accompanied by the full purchase price for the shares to be purchased either in
cash, by check or by delivery of shares of Class A common stock, or by a
combination of these methods of payment. For this purpose, the per share value
of the Class A common stock shall be the fair market value on the date of
exercise, as determined by the Board.
(d) At any time when an Optionee is required to pay to the Company
an amount required to be withheld under applicable income tax or other laws in
connection with the exercise of an option, the Optionee may satisfy this
obligation in whole or in part by making an election ("Election") to have the
Company withhold shares of Class A common stock of the Company, or, if the
Board so determines, by delivering shares of Class A common stock of the
Company ("Delivery") having a value equal to the amount required to be
withheld. The value of the shares to be withheld or delivered shall be based
on the fair market value of the Class A common stock of the Company on the date
of exercise (the "Tax Date"). Each Election or Delivery must be made on or
prior to the Tax Date and shall be irrevocable. The Board may disapprove any
Election or Delivery or may suspend or terminate the right to make Elections or
Deliveries. If an Optionee is a person described in Section 16(a) of the
Securities Exchange Act of 1934 (the "Exchange Act"), then an Election is
subject to the following additional restrictions: (i) no Election shall be
effective for a Tax Date which occurs within six months of the grant of the
option; and (ii) the Election must be made either (A) six months prior to the
Tax Date, (B) during a period beginning on the third business day following the
date of release for publication of the Company's quarterly or annual summary
statements of revenue and income and ending on the twelfth business day
following such date or (C) more than six months and one day from the later of
the date of the grant of the option hereunder to such person or the date of the
most recent transaction by such person which is treated as a purchase of the
common stock of the Company pursuant to the Exchange Act and the rules and
regulations thereunder, and which is not exempt from Section 16(b) of the
Exchange Act.
8. CONTINUITY OF EMPLOYMENT
(a) Each option shall be subject to the following in addition to
the restrictions set forth in paragraphs 6 and 7 hereof:
(i) If an Optionee dies without having fully exercised his or her
option, the executors or administrators of his or her estate
or legatees or distributees shall have the right during a one
(1) year period following his or her death (but not after the
expiration of the term of such option) to exercise such option
in whole or in part but only to the extent that the Optionee
could have exercised it at the date of his or her death.
3
<PAGE> 4
(ii) If an Optionee's termination of employment is due to
retirement or physical disability, the Optionee's option shall
terminate three (3) months after his or her termination of
employment (but not after the expiration of the term of such
option) and may be exercised only to the extent that such
Optionee could have exercised it at the date of his or her
termination of employment.
(iii) If an Optionee's termination of employment is for any reason
other than death, retirement or physical disability, the
Optionee's option shall terminate upon said termination of
employment and the Company shall have the right within a
period of one year after said termination of employment to
reacquire at the option price any stock acquired by the
Optionee by exercise of an option within ninety (90) days
prior to said termination of employment.
(b) Nothing contained in the ACSOP or any option granted pursuant
to the ACSOP shall confer upon any Optionee any right to be continued in the
employment of the Company or any subsidiary or shall prevent the Company or any
subsidiary from terminating an Optionee's employment at any time, with or
without cause. The determination by the Board of whether an authorized leave
of absence constitutes a termination of employment shall be final, conclusive
and binding.
9. NON-TRANSFERABILITY OF OPTIONS
An option granted under the ACSOP shall not be assignable or
transferable by such Optionee otherwise than by will or the laws of descent and
distribution, and an option shall be exercisable during the lifetime of the
Optionee only by him or her. An option transferred by will or the laws of
descent and distribution may only be exercised by the legatee or distributee
during the one year period following the Optionee's death and may only be
exercised to the extent it was exercisable by the Optionee prior to his or her
death.
10. ADJUSTMENT UPON CHANGE IN STOCK
Each option and the number and kind of shares subject to future
options under the ACSOP will be adjusted, as may be determined to be equitable
by the Board, in the event there is any change in the outstanding Class A
common stock of the Company by reason of a stock dividend, recapitalization,
merger, consolidation, split-up, combination or exchange of shares, or the
like, and the Board's determination of such adjustment provisions shall be
final, conclusive and binding.
11. AMENDMENT AND DISCONTINUANCE
The Board, without further approval of the stockholders, may, at any
time and from time to time, suspend or discontinue the ACSOP in whole or in
part or amend the ACSOP in such respects as the Board may deem proper and in
the best interests of the Company or as may be advisable, provided, however,
that no suspension or amendment shall be made which would:
(i) Adversely affect or impair any option previously granted under
the ACSOP without the consent of the Optionee, or
4
<PAGE> 5
(ii) Except as specified in paragraph 10, increase the total number
of shares for which options may be granted under the ACSOP or
decrease the minimum price at which options may be granted
under the ACSOP.
12. EFFECTIVE DATE
The ACSOP, as amended, has been adopted and authorized by the Board
for submission to the stockholders of the Company. If the ACSOP is approved by
the affirmative vote of a majority of the votes attributable to the outstanding
shares of the Company's common stock, it shall be deemed to have become
effective on October 27, 1994, the date of adoption by the Board, subject to
stockholder approval.
5
<PAGE> 1
EXHIBIT 11
ALBERTO-CULVER COMPANY
COMPUTATION OF NET EARNINGS PER SHARE
YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
1995 1994 1993
PRIMARY:
<S> <C> <C> <C>
Net earnings $52,651 44,068 41,272
======= ====== ======
Weighted average shares outstanding 27,715 28,031 28,680
Add:
Net additional shares from the assumed exercise
of stock options 134 11 37
------ ------ ------
Weighted average shares outstanding including common
stock equivalents 27,849 28,042 28,717
====== ====== ======
Net earnings per share $1.89 1.57 1.44
===== ==== ====
FULLY-DILUTED:
Net earnings $52,651 44,068 41,272
Add:
Interest expense on convertible subordinated
debentures, net of tax benefit 783 -- --
Adjusted net earnings $53,434 44,068 41,272
======= ====== ======
Weighted average shares outstanding 27,715 28,031 28,680
Add:
Net additional shares from the assumed exercise
of stock options 184 50 37
Weighted average shares from the assumed conversion
of the subordinated debentures 677 -- --
Weighted average shares outstanding including common
stock equivalents 28,576 28,081 28,717
====== ====== ======
Net earnings per share $1.87 1.57 1.44
===== ==== ====
</TABLE>
<PAGE> 1
EXHIBIT 13
CONSOLIDATED STATEMENTS OF EARNINGS
Alberto-Culver Company and Subsidiaries
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------------------------
(Dollars in thousands, except per share data) 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net sales $1,358,219 1,216,119 1,147,990
Costs and expenses:
Cost of products sold 682,589 602,749 564,260
Advertising, promotion, selling and administrative 584,856 536,441 511,274
Interest expense, net of interest income
of $3,414 in 1995, $2,779 in 1994
and $2,334 in 1993 6,532 5,851 7,327
------- ------ ------
Total costs and expenses 1,273,977 1,145,041 1,082,861
---------- ---------- ----------
Earnings before provision for income taxes 84,242 71,078 65,129
Provision for income taxes (note 6) 31,591 27,010 23,857
-------- ------- -------
Net earnings $ 52,651 44,068 41,272
========== ======= =======
Net earnings per share:
Primary $1.89 1.57 1.44
Fully-diluted 1.87 1.57 1.44
===== ==== ====
</TABLE>
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
Alberto-Culver Company and Subsidiaries
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
----------------------------------------------
(Dollars in thousands) 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Retained earnings, beginning of year $293,445 257,085 223,706
Net earnings 52,651 44,068 41,272
------- ------- -------
346,096 301,153 264,978
Cash dividends (note 5) (8,590) (7,708) (7,893)
------- ------- -------
Retained earnings, end of year $337,506 293,445 257,085
======== ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 2
CONSOLIDATED BALANCE SHEETS
Alberto-Culver Company and Subsidiaries
<TABLE>
<CAPTION>
(Dollars in thousands, except per share data)
SEPTEMBER 30,
---------------------------------
ASSETS 1995 1994
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents $142,585 41,833
Short-term investments 4,400 8,529
Receivables, less allowance for doubtful
accounts of $5,663 in 1995
and $5,497 in 1994 128,482 108,877
Inventories:
Raw materials 32,408 29,618
Work-in-process 4,897 5,868
Finished goods 211,224 195,633
------- --------
Total inventories 248,529 231,119
Prepaid expenses 12,549 11,399
------ -------
Total current assets 536,545 401,757
Property, plant and equipment (note 7):
Land 8,396 7,328
Buildings 100,954 89,344
Machinery and equipment 176,684 146,560
------- --------
Total property, plant and equipment 286,034 243,232
Accumulated depreciation 128,243 110,351
------- --------
Property, plant and equipment, net 157,791 132,881
Goodwill, net 55,225 44,307
Trade names and other intangible assets, net 34,198 9,960
Other assets 31,327 21,303
------ -------
$815,086 610,208
======== =======
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S> <C> <C>
Current liabilities:
Short-term borrowings $ 103 2,152
Current maturities of long-term debt 1,286 30,667
Accounts payable 144,253 110,122
Accrued expenses (note 2) 76,141 64,754
Income taxes 13,056 8,315
------ ------
Total current liabilities 234,839 216,010
Long-term debt (note 3) 83,094 42,976
Convertible subordinated debentures (note 3) 100,000 --
Deferred income taxes 15,365 14,780
Other liabilities 10,885 9,472
Stockholders' equity (note 5):
Common stock, par value $.22 per share:
Class A authorized 25,000,000 shares;
issued 13,262,624 shares in 1995
and 13,261,624 shares in 1994 2,918 2,918
Class B authorized 25,000,000 shares;
issued 20,944,424 shares in 1995
and 20,945,424 shares in 1994 4,608 4,608
Additional paid-in capital 87,896 87,452
Retained earnings 337,506 293,445
Foreign currency translation (note 1) (12,966) (11,793)
-------- --------
419,962 376,630
Less treasury stock, at cost (Class A common stock: 1995
- 2,299,618 shares and 1994 - 2,348,426 shares;
Class B common stock:
1995 and 1994 - 4,178,184 shares) (note 5)
49,059 49,660
------- -------
Total stockholders' equity 370,903 326,970
-------- --------
$815,086 610,208
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 3
CONSOLIDATED STATEMENTS OF CASH FLOWS
Alberto-Culver Company and Subsidiaries
<TABLE>
<CAPTION>
(Dollars in thousands)
YEAR ENDED SEPTEMBER 30,
-----------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 52,651 44,068 41,272
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation 20,712 17,234 16,238
Amortization of goodwill and other assets 3,967 3,668 3,342
Deferred income taxes 243 (158) 1,381
Other, net 852 447 814
Cash effects of changes in:
Receivables, net (20,144) 5,995 (37)
Inventories (7,783) (21,972) (16,682)
Prepaid expenses (1,940) (348) (1,326)
Accounts payable and accrued expenses 29,420 16,815 9,318
Income taxes 3,852 (347) (1,552)
------ ----- -------
Net cash provided by operating activities 81,830 65,402 52,768
------ ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Short-term investments 4,129 (329) (3,800)
Capital expenditures (31,002) (26,184) (26,362)
Other assets (8,143) (6,842) (1,516)
Proceeds from sale of business, net of sold company's cash -- 1,592 --
Payments for purchased businesses, net of acquired companies' cash (41,635) (7,618) (2,357)
Proceeds from disposals of assets 1,006 2,096 1,923
------- ------ ------
Net cash used by investing activities (75,645) (37,285) (32,112)
------- -------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings (2,091) (4,147) (863)
Proceeds from long-term debt 45,001 5,776 31,647
Repayments of long-term debt (37,773) (33,757) (44,755)
Issuance of convertible subordinated debentures 100,000 -- --
Convertible subordinated debentures issuance costs (2,945) -- --
Proceeds from exercise of stock options 659 651 2,335
Cash dividends paid (8,590) (7,708) (7,893)
Stock purchased for treasury -- (13,729) (7,040)
------ ------- -------
Net cash provided (used) by financing activities 94,261 (52,914) (26,569)
------- ------- -------
Effect of foreign exchange rate changes on cash 306 883 (4,098)
---- ---- ------
Net increase (decrease) in cash and cash equivalents 100,752 (23,914) (10,011)
Cash and cash equivalents at beginning of year 41,833 65,747 75,758
------- ------- -------
Cash and cash equivalents at end of year $142,585 41,833 65,747
======= ======= =======
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Interest $ 6,831 7,643 9,096
Income taxes 26,801 27,387 24,107
Capital lease obligations assumed 1,393 843 442
======= ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include accounts of the company and its
subsidiaries. All significant intercompany accounts and transactions have been
eliminated. Certain amounts for prior periods have been reclassified to
conform with the current year's presentation.
CASH EQUIVALENTS
All highly liquid investments purchased with an original maturity of three
months or less are considered to be cash equivalents. These investments are
stated at cost which approximates market value.
SHORT-TERM INVESTMENTS
Short-term investments are stated at cost which is equal to market value at
September 30, 1995 and 1994, respectively.
INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out method) or
market (net realizable value).
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are carried at cost. Depreciation is provided
primarily on the straight-line method based on the estimated useful lives of
assets. Expenditures for maintenance and repairs are expensed as incurred.
GOODWILL AND TRADE NAMES
The cost of goodwill and trade names is amortized on a straight-line basis over
periods ranging from ten to forty years. Management periodically considers
whether there has been a permanent impairment to the value of goodwill and
trade names by evaluating various factors including current operating results,
anticipated future results and cash flows, and market and economic conditions.
FOREIGN CURRENCY TRANSLATION
Foreign currency balance sheet accounts are translated at rates of exchange in
effect at the balance sheet date. Results of operations are translated using
the average exchange rates prevailing throughout the period.
The following is an analysis of changes in the foreign currency translation
account:
<TABLE>
<CAPTION>
(Thousands) 1995 1994
---- ----
<S> <C> <C>
Balance, beginning of year $(11,793) (16,624)
Foreign currency translation
gain (loss) (1,173) 4,831
------- ------
Balance, end of year $(12,966) (11,793)
======= ======
</TABLE>
Realized gains and losses from foreign currency transactions included in the
consolidated statements of earnings resulted in losses of $359,000, $323,000
and $489,000 in 1995, 1994 and 1993, respectively.
INCOME TAXES
Statement of Financial Accounting Standards No. 109 ("Statement 109"),
"Accounting for Income Taxes", was adopted by the company in fiscal year 1994
without restating prior years' financial statements. Under Statement 109,
deferred income taxes are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which temporary differences are estimated to
be recovered or settled. Under Statement 109, the effect on deferred taxes of
a change in tax rates is recognized in the statement of earnings in the period
of enactment. Prior to fiscal year 1994, income taxes were accounted for under
the deferred method.
CALCULATION OF EARNINGS PER SHARE
Primary earnings per share are based on the weighted average shares
outstanding, including common stock equivalents, of 27,849,000 in 1995,
28,042,000 in 1994 and 28,717,000 in 1993.
Fully-diluted earnings per share are determined by dividing net earnings plus
the interest expense on the convertible subordinated debentures (net of tax
benefit) by the weighted average shares outstanding after giving effect for
common shares to be issued assuming conversion of the convertible subordinated
debentures to common shares. Fully-diluted weighted average shares outstanding
were 28,576,000 in 1995, 28,081,000 in 1994 and 28,717,000 in 1993.
(2) ACCRUED EXPENSES
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
(Thousands) 1995 1994
---- ----
<S> <C> <C>
Compensation and benefits $31,597 25,277
Advertising and promotions 21,320 23,186
Other 23,224 16,291
------- ------
$76,141 64,754
======== ======
</TABLE>
(3) DEBT
In July, 1995, the company issued $100 million of 5.5% convertible subordinated
debentures maturing on June 30, 2005. The debentures are convertible into Class
A common shares at a conversion rate of 30.888 shares per $1,000 principal
amount of debentures (equivalent to a conversion price of approximately
$32-3/8). The debentures are redeemable, in whole but not in part, at the
option of the company any time on or after June 30, 1998 at par plus accrued
interest.
<PAGE> 5
NOTES CONTINUED
Long-term debt, exclusive of current maturities, consists of the following:
<TABLE>
<CAPTION>
(Thousands) 1995 1994
---- ----
<S> <C> <C>
5.5% convertible subordinated
debentures due June, 2005 $100,000 --
Term notes payable:
9.73% due November, 1998 20,000 20,000
6.2% due September, 2000 20,000 20,000
Revolving Swedish Krona credit
agreements at 8.6% - 11.7% 40,302 1,338
Other, principally foreign borrowings
and capitalized leases, at weighted
average interest rates of 9.0% in
1995 and 10.2% in 1994 2,792 1,638
--------- --------
$183,094 42,976
========= ========
</TABLE>
Maturities of debt for the next five years are as follows (in thousands):
1996 - $1,286; 1997 - $1,153; 1998 - $980; 1999 - $20,458; 2000 - $20,077;
and later - $140,426. The fair value of long-term debt approximates its
recorded value.
Various borrowing arrangements impose restrictions on such items as total debt,
working capital, dividend payments, treasury stock purchases and interest
expense. At September 30, 1995, the company was in compliance with these
arrangements and $91.6 million of consolidated retained earnings was not
restricted as to the payment of dividends or purchases of treasury stock.
The company had available lines of credit of approximately $69 million with
various banks at September 30, 1995. The credit lines, which require no
compensating balances, may be terminated at the option of the banks or the
company.
(4) STOCK OPTION AND RESTRICTED STOCK PLANS
Pursuant to its stock option plans, the company is authorized to issue
non-qualified options to employees and directors to purchase a limited number
of shares of the company's common stock at a price not less than the fair
market value of the stock on the date of grant. Options under the plan expire
five or ten years from date of grant and are exercisable on a cumulative basis
in four equal annual increments commencing one year after the date of grant.
Shares under option at September 30, 1995 are summarized as follows:
<TABLE>
<CAPTION>
Shares Per Share Total
Year Under Option Option Price
Granted Option Price (Thousands)
- ------- ------ --------- ------------
<S> <C> <C> <C>
1989 6,250 $13.25 $ 83
1990 91,966 18.75 1,724
1991 48,550 19.88 - 21.86 975
1992 130,300 21.50 - 23.65 2,812
1993 144,750 23.69 - 26.06 3,439
1994 197,050 19.50 - 21.63 3,875
1995 496,300 23.69 11,756
- ----- ---------- ----------------- ----------
1,115,166 $ 24,664
========== ==========
</TABLE>
Options for 32,634 shares were exercised in 1995 whereas options for 46,625
shares were exercised in the prior year. During 1995 and 1994, options for
35,525 and 26,350 shares, respectively, were terminated. Options for 366,129
shares were exercisable at September 30, 1995.
The company is also authorized to grant shares of Class A common stock to
employees under its restricted stock plan. The restricted shares vest on a
cumulative basis in four equal annual installments commencing four years after
the date of grant. At September 30, 1995, there were 16,000 restricted shares
outstanding.
(5) TREASURY STOCK AND ADDITIONAL PAID-IN CAPITAL
Changes in treasury stock and additional paid-in capital during 1995, 1994 and
1993 were as follows:
<TABLE>
<CAPTION>
Treasury Stock Additional
-------------- Paid-In
(Thousands) Shares Amount Capital
------ ------ -------
<S> <C> <C> <C>
Balance at September 30, 1992 5,660 $30,832 $86,407
Stock options exercised (212) (1,480) 855
Stock purchased
for treasury 394 7,040 --
----- ------ --------
Balance at September 30, 1993 5,842 36,392 87,262
Stock options exercised (46) (461) 190
Stock purchased
for treasury 731 13,729 --
----- ------ ------
Balance at September 30, 1994 6,527 49,660 87,452
Stock options exercised (33) (399) 260
Stock issued pursuant to
employee incentive plans (16) (202) 184
----- ------ ------
Balance at September 30, 1995 6,478 $49,059 $87,896
===== ====== ======
</TABLE>
The company has two classes of common stock, both of which are listed on the
New York Stock Exchange. Except for voting, dividend and conversion rights,
the Class A and Class B common stock are identical. Class A has one-tenth vote
per share and Class B has one vote per share. No dividend may be paid on the
Class B unless an equal or greater dividend is paid on the Class A, and
dividends may be paid on the Class A in excess of dividends paid, or without
paying dividends, on the Class B. All, and not less than all, of the Class A
may at any time be converted into Class B on a share-for-share basis at the
option of the company. The Class B is convertible into Class A on a
share-for-share basis at the option of the holders.
Cash dividends for Class B common stock in 1995, 1994 and 1993 were $5.2
million or $.31 per share, $4.6 million or $.275 per share and $4.6 million or
$.275 per share, respectively. Cash dividends for Class A common stock in
1995, 1994 and 1993 were $3.4 million or $.31 per share, $3.1 million or $.275
per share and $3.3 million or $.275 per share, respectively. Dividends paid in
fiscal 1993 included a one-time extraordinary dividend of two cents per share
declared by the Board of Directors in recognition of the company surpassing one
billion dollars in sales for the fiscal year ended September 30, 1992. Class A
common stock dividends per share have been equal to those of Class B common
stock since the Class A shares were issued in April, 1986.
<PAGE> 6
NOTES CONTINUED
(6) INCOME TAXES
The provisions for income taxes consist of the following:
<TABLE>
<CAPTION>
(Thousands) 1995 1994 1993
------- ------ -------
<S> <C> <C> <C>
Current:
Federal $20,820 19,477 16,129
Foreign 5,310 3,768 3,062
State 5,218 3,923 3,285
------- ------ ------
31,348 27,168 22,476
------- ------ ------
Deferred:
Federal (213) (1,315) 637
Foreign 561 974 744
State (105) 183 --
------- ------ -----
243 (158) 1,381
------- ------ ------
$31,591 27,010 23,857
======== ====== ======
</TABLE>
Effective October 1, 1993, the company adopted Statement 109, "Accounting for
Income Taxes". As permitted by Statement 109, the company elected not to
restate the financial statements of any prior years. The cumulative effect of
the change in accounting principle was not considered material and was not
separately disclosed in the consolidated statement of earnings.
The difference between the effective income tax rate and the United States
statutory federal income tax rate is summarized below:
<TABLE>
<CAPTION>
1995 1994 1993
----- ------ -----
<S> <C> <C> <C>
Statutory tax rate 35.0% 35.0% 34.8%
Effect of foreign
income tax rates (1.0) .1 (1.1)
State income taxes, net
of federal tax benefit 3.9 3.7 3.3
Other, net (.4) (.8) (.4)
----- ------ -----
Effective tax rate 37.5% 38.0% 36.6%
===== ====== =====
</TABLE>
Significant components of the company's deferred tax assets and liabilities as
of September 30, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
(Thousands) 1995 1994
------- -------
<S> <C> <C>
Deferred tax liabilities:
Depreciation and amortization $13,956 14,128
Inventory adjustments 983 820
State income taxes 1,095 1,200
Other 313 --
------- ------
Total deferred tax liabilities 16,347 16,148
------- ------
Deferred tax assets:
Accrued expenses 5,220 5,104
Net operating loss carryforwards -- 417
Other -- 132
------- ------
Total deferred tax assets 5,220 5,653
------- ------
Net deferred tax liability $11,127 10,495
======= ======
</TABLE>
Prepaid expenses at September 30, 1995 and 1994 include $4.2 million and $4.3
million, respectively, of net deferred tax assets.
Under the deferred method of accounting for income taxes in fiscal year 1993,
the deferred income tax provision included the following components:
<TABLE>
<CAPTION>
(Thousands) 1993
------
<S> <C>
Accelerated tax depreciation $1,220
Prepaid expenses (401)
Inventory adjustments 941
Promotional accruals (607)
Other 228
- ----- ------
$1,381
======
</TABLE>
Domestic earnings before income taxes were $72.0 million, $62.3 million and
$56.0 million in 1995, 1994 and 1993, respectively. Foreign operations had
earnings before income taxes of $12.2 million, $8.8 million and $9.1 million in
1995, 1994 and 1993, respectively.
Undistributed earnings of the company's foreign operations amounting to $80.2
million are intended to remain permanently invested to finance future growth
and expansion. Accordingly, no U.S. income taxes have been provided on those
earnings at September 30, 1995. Should such earnings be distributed, the
credit for foreign income taxes paid would substantially offset applicable U.S.
income taxes.
(7) LEASE COMMITMENTS
The major portion of the company's leases are for Sally Beauty Company stores.
Other leases cover certain manufacturing and warehousing properties, office
facilities, data processing equipment and automobiles. At September 30, 1995,
future minimum payments under noncancellable leases are as follows:
<TABLE>
<CAPTION>
Operating Capital
(Thousands) Leases Leases
--------- ------
<S> <C> <C>
1996 $ 33,262 1,145
1997 26,755 1,016
1998 19,625 692
1999 11,902 164
2000 5,482 72
2001 and later 3,893 17
--------- ------
Total minimum lease payments $ 100,919 3,106
========= ======
</TABLE>
The $3.1 million of minimum lease payments under capital leases include
$371,000 of imputed interest expense. Capital leases included in the
consolidated balance sheets at September 30, 1995 and 1994 are summarized
below:
<TABLE>
<CAPTION>
(Thousands) 1995 1994
------ ------
<S> <C> <C>
Machinery and equipment $4,633 3,366
Accumulated depreciation
and amortization 1,222 1,095
Obligations under capital leases:
Current 993 656
Long-term 1,742 1,491
====== ======
</TABLE>
Total rental expense for operating leases amounted to $47.4 million in 1995,
$44.2 million in 1994 and $40.3 million in 1993. Certain leases require the
company to pay real estate taxes, insurance, maintenance and special
assessments.
<PAGE> 7
NOTES CONTINUED
(8) BUSINESS SEGMENTS AND GEOGRAPHIC AREA INFORMATION
In 1995, the company redefined its business segments to correspond with the way
the company is internally managed and, accordingly, prior years' segments have
been reclassified to conform to the current year presentation.
The "consumer products" business segment principally includes developing,
manufacturing, distributing and marketing branded consumer products worldwide
and includes the company's Alberto-Culver USA and Alberto-Culver International
business units. This segment also includes products intended for end use by
institutions and industries.
The "specialty distribution - Sally" business segment consists of Sally Beauty
Company, a specialty distributor of professional beauty supplies.
Segment and geographic data for the years ended September 30, 1995, 1994 and
1993 are as follows:
<TABLE>
<CAPTION>
BUSINESS SEGMENTS INFORMATION (Thousands) 1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
NET SALES:
Consumer products:
Alberto-Culver USA $ 305,681 293,685 294,190
Alberto-Culver International 363,294 300,605 314,721
----------- --------- ---------
Total consumer products 668,975 594,290 608,911
Specialty distribution - Sally 697,668 631,529 549,143
Eliminations (8,424) (9,700) (10,064)
----------- --------- ---------
$ 1,358,219 1,216,119 1,147,990
=========== ========= =========
EARNINGS BEFORE PROVISION FOR INCOME TAXES:
Consumer products:
Alberto-Culver USA $ 16,011 11,867 15,937
Alberto-Culver International 16,604 12,241 13,693
----------- --------- ---------
Total consumer products 32,615 24,108 29,630
Specialty distribution - Sally 71,889 63,907 51,692
----------- --------- ---------
Operating profit 104,504 88,015 81,322
Unallocated expenses, net* (13,730) (11,086) (8,866)
Interest expense, net of interest income (6,532) (5,851) (7,327)
----------- --------- ---------
$ 84,242 71,078 65,129
=========== ========= =========
IDENTIFIABLE ASSETS:
Consumer products:
Alberto-Culver USA $ 130,592 128,189 131,686
Alberto-Culver International 284,750 208,545 202,972
----------- --------- ---------
Total consumer products 415,342 336,734 334,658
Specialty distribution - Sally 257,437 229,543 206,067
Corporate** 142,307 43,931 51,321
----------- --------- ---------
$ 815,086 610,208 593,046
=========== ========= =========
DEPRECIATION AND AMORTIZATION EXPENSE:
Consumer products:
Alberto-Culver USA $ 4,616 4,041 3,722
Alberto-Culver International 8,433 6,217 6,092
----------- --------- ---------
Total consumer products 13,049 10,258 9,814
Specialty distribution - Sally 9,953 9,077 8,467
Corporate 1,677 1,567 1,299
----------- --------- ---------
$ 24,679 20,902 19,580
=========== ========= =========
CAPITAL EXPENDITURES:
Consumer products:
Alberto-Culver USA $ 11,975 6,107 6,561
Alberto-Culver International 6,293 4,978 4,315
----------- --------- ---------
Total consumer products 18,268 11,085 10,876
Specialty distribution - Sally 13,746 15,482 15,448
Corporate 381 460 480
----------- --------- ---------
$ 32,395 27,027 26,804
=========== ========= =========
GEOGRAPHIC AREA INFORMATION (Thousands) 1995 1994 1993
---- ---- ----
NET SALES:
United States $ 997,065 918,870 838,093
Foreign 364,543 300,850 312,587
Eliminations (3,389) (3,601) (2,690)
----------- --------- ---------
$ 1,358,219 1,216,119 1,147,990
=========== ========= =========
OPERATING PROFIT:
United States $ 88,025 77,248 70,443
Foreign 16,479 10,767 10,879
----------- --------- ---------
$ 104,504 88,015 81,322
=========== ========= =========
IDENTIFIABLE ASSETS:
United States $ 390,763 362,781 342,167
Foreign 282,016 203,496 199,558
Corporate** 142,307 43,931 51,321
----------- --------- ---------
$ 815,086 610,208 593,046
=========== ========= =========
</TABLE>
* "Unallocated expenses, net" principally consists of general corporate
expenses and foreign exchange gains and losses.
** Corporate assets are primarily cash, cash equivalents, short-term
investments and equipment.
<PAGE> 8
NOTES CONTINUED
(9) QUARTERLY FINANCIAL DATA
Unaudited quarterly consolidated statement of earnings information for the
years ended September 30, 1995 and 1994 are summarized below (in thousands,
except per share amounts):
<TABLE>
<CAPTION>
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
1995:
Net sales $311,474 324,208 357,678 364,859
Cost of products sold 155,548 161,597 180,590 184,854
Net earnings 11,195 12,230 13,634 15,592
Earnings per share:
Primary .40 .44 .49 .56
Fully-diluted .40 .44 .49 .54
======== ======= ======= =======
1994:
Net sales $284,570 302,824 315,016 313,709
Cost of products sold 141,166 147,690 154,962 158,931
Net earnings 8,531 9,311 12,278 13,948
Earnings per share:
Primary .30 .33 .44 .50
Fully-diluted .30 .33 .44 .50
======== ======= ======= =======
</TABLE>
(10) ACQUISITION
In April, 1995, the company's Swedish-based subsidiary, Cederroth International
AB, completed the acquisition of the Toiletries Division of Molnlycke AB. The
acquired division manufactures and markets body and skin care, hair care, oral
care and household products in Scandinavia. The acquisition, valued at
approximately $50 million, was accounted for as a purchase and was funded with
local bank borrowings payable in Swedish Krona.
The operations of the Molnlycke Toiletries business have been included in the
company's consolidated financial statements since April, 1995. Had Molnlycke
Toiletries been acquired at the beginning of fiscal year 1994, the pro-forma
inclusion of its operating results would not have had a significant effect on
the reported consolidated net earnings for the two year period ended September
30, 1995.
(11) SUBSEQUENT EVENT
On October 30, 1995, the company entered into a definitive agreement to acquire
St. Ives Laboratories, Inc., a hair and skin care products company, through a
cash merger valued at approximately $120 million. The merger has been approved
by the Board of Directors of both companies and is subject to the approval of
St. Ives shareholders and other customary conditions. The merger is expected to
close in January, 1996 and will be accounted for as a purchase.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Alberto-Culver Company:
We have audited the accompanying consolidated balance sheets of Alberto-Culver
Company and subsidiaries as of September 30, 1995 and 1994, and the related
consolidated statements of earnings, retained earnings and cash flows for each
of the years in the three-year period ended September 30, 1995. These
consolidated financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Alberto-Culver
Company and subsidiaries as of September 30, 1995 and 1994, and the results of
their operations and their cash flows for each of the years in the three-year
period ended September 30, 1995, in conformity with generally accepted
accounting principles.
Chicago, Illinois
October 30, 1995 KPMG Peat Marwick LLP
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Alberto-Culver Company and Subsidiaries
RESULTS OF OPERATIONS
Fiscal year 1995 marked the company's twelfth consecutive year of record sales.
Net sales for the year ended September 30, 1995 were $1.36 billion, an increase
of 11.7% over prior year sales of $1.22 billion. Net sales in 1993 were $1.15
billion.
Record net earnings of $52.7 million or $1.89 per share in 1995 compared to
1994 net earnings of $44.1 million or $1.57 per share. Net earnings in 1993
were $41.3 million or $1.44 per share.
Sales of Alberto-Culver USA "consumer products" in 1995 were $305.7 million, an
increase of 4.1% from prior year sales of $293.7 million. Contributing to the
1995 sales increase were Alberto VO5 Shampoo and Conditioner products,
including the introduction of the Alberto VO5 Naturals line, and Tresemme
Shampoo. Sales gains were also realized for FDS feminine deodorant spray, Mrs.
Dash seasoning products, Static Guard anti-static spray and Baker's Joy
combination flour and oil spray. These higher sales were partially offset by
lower sales for the Alberto, Alberto VO5 and Bold Hold hair styling lines and
the discontinuation of Village Saucerie sauce and recipe mixes in 1995. In
1994, sales decreased slightly from 1993 sales of $294.2 million. Sales of new
products in 1994 were offset by the effects of retail trade customers lowering
their inventory levels. New product lines in 1994 included Village Saucerie
and Alberto VO5 Hot Oil Hair Therapy shampoos and conditioners.
Alberto-Culver International "consumer products" sales were $363.3 million in
1995 compared to $300.6 million in 1994 and $314.7 million in 1993.
In 1995, the sales increase primarily resulted from the acquisition of the
Toiletries Division of Molnlycke AB in April, 1995. The decrease in 1994 sales
was primarily due to the sale of Cederroth's institutional first aid business
in Scotland in October, 1993 and unfavorable foreign exchange rates, partially
offset by sales of cosmetics and fragrances in New Zealand resulting from the
acquisition of BDM Grange in October, 1993.
Sales of the "specialty distribution - Sally" business segment increased to
$697.7 million in 1995 compared to $631.5 million and $549.1 million in 1994
and 1993, respectively. The higher sales were attributable to sales gains for
established Sally Beauty Company stores and the addition of 131 stores since
September 30, 1994. The number of Sally stores increased 36.1% over the last
three years to a total of 1,494 at the end of 1995 compared to 1,363 and 1,235
at the end of 1994 and 1993, respectively.
Cost of products sold as a percentage of sales was 50.3% in fiscal year 1995
compared to 49.6% in 1994 and 49.2% in 1993. For the three year period ended
September 30, 1995, the cost of products sold percentage was affected by
changes in product mix, higher raw material costs and the growth of Sally
Beauty Company, which has a higher cost of products sold percentage.
Advertising, promotion, selling and administrative expenses increased 9.0% in
1995 and 4.9% in 1994. The increase in 1995 resulted from the acquisition of
Molnlycke Toiletries in April, 1995 along with higher selling and
administrative costs associated with the increase in the number of Sally Beauty
Company stores. The higher costs in 1994 were primarily due to selling and
administrative costs associated with the increase in the number of Sally stores
and higher advertising and promotional expenditures for consumer products.
Advertising, promotion and market research expenditures were $188.0 million,
$178.5 million and $172.8 million in 1995, 1994 and 1993, respectively.
Interest expense, net of interest income, was $6.5 million, $5.9 million and
$7.3 million in 1995, 1994 and 1993, respectively. Interest expense was $9.9
million in 1995 versus $8.6 million in 1994 and $9.7 million in 1993. The
increase in interest expense in 1995 resulted from the issuance of $100 million
of convertible subordinated debentures in July, 1995 and borrowings related to
the acquisition of Molnlycke Toiletries in April, 1995, partially offset by
the retirement of $30.0 million of term loans in July, 1995. The reduction in
interest expense in 1994 versus 1993 was principally due to a decrease in debt
outstanding during the year and lower borrowing rates.
Interest income was $3.4 million, $2.8 million and $2.3 million in 1995, 1994
and 1993, respectively. The increase in 1995 principally resulted from
investing the net proceeds of the $100 million convertible subordinated
debentures issued in July, 1995. The increase in 1994 resulted from interest on
income tax refunds partially offset by lower investment balances.
The provision for income taxes as a percentage of earnings before income taxes
was 37.5%, 38.0% and 36.6% in 1995, 1994 and 1993, respectively. Factors which
influenced the effective tax rates for those years are described in "note 6" to
the consolidated financial statements.
FINANCIAL CONDITION
Working capital at September 30, 1995 was $301.7 million, an increase of $116.0
million from prior year-end working capital of $185.7 million. The higher
working capital was primarily due to an increase in cash and cash equivalents
as a result of the issuance of $100 million of convertible subordinated
debentures in July, 1995 and earnings for the fiscal year partially offset by
capital expenditures and dividend payments. As a result, the company's current
ratio at September 30, 1995 was 2.28 to 1.00 compared to 1.86 to 1.00 at
September 30, 1994.
Accounts receivable and inventories less accounts payable were $232.8 million
at September 30, 1995 compared to $229.9 million at September 30, 1994. The
increase was primarily due to inventories needed to support the 9.6% increase
in the number of Sally stores in 1995 and the Molnlycke Toiletries business
acquired in April, 1995, partially offset by lower inventories in the
Alberto-Culver USA "consumer products" business.
<PAGE> 10
Net property, plant and equipment increased $24.9 million to $157.8 million at
September 30, 1995. The increase resulted primarily from a manufacturing plant
acquired with the Molnlycke Toiletries business, capital expenditures for
machinery and equipment and information systems, additional Sally stores and a
new Sally warehouse.
Other assets of $31.3 million at September 30, 1995 rose $10.0 million due to
increases in the cash surrender value of life insurance policies and deferred
costs related to the convertible subordinated debentures.
Short-term borrowings, including current maturities of long-term debt,
decreased $31.4 million in 1995 due to the retirement of $30.0 million of term
loans in July, 1995. Long-term debt increased $40.1 million principally due to
bank borrowings in Sweden related to the acquisition of Molnlycke Toiletries in
April, 1995.
Total stockholders' equity increased $43.9 million to $370.9 million at
September 30, 1995, primarily due to net earnings for the fiscal year
partially offset by dividend payments.
LIQUIDITY AND CAPITAL RESOURCES
The company's primary source of cash over the past three years has been funds
provided by operating activities. Operating activities provided cash of $81.8
million, $65.4 million and $52.8 million in 1995, 1994 and 1993, respectively.
A primary use of cash has been the repayment of long-term debt. Over the three
year period ending September 30, 1995, debt repayments have exceeded proceeds
from new borrowings, excluding the convertible subordinated debentures, by
$41.0 million. The company has obtained long-term financing as needed to fund
acquisitions and other growth opportunities. As evidenced by the issuance of
the $100 million of convertible subordinated debentures in July, 1995, funds
are occasionally obtained prior to their actual need in order to take advantage
of opportunities in the debt markets. In October, 1995, the company entered
into a definitive merger agreement to acquire St. Ives Laboratories, Inc. for
approximately $120 million, as disclosed in "note 11" to the consolidated
financial statements.
Under existing debt covenants, the company has the ability to enter into new
financing arrangements aggregating up to $557 million. At September 30, 1995,
the company had available lines of credit of $69 million with various financial
institutions. The credit lines, which require no compensating balances, may be
terminated at the option of the respective banks or the company.
Other major uses of cash during the three year period ending September 30, 1995
were capital expenditures of $83.5 million, payments for acquired companies of
$51.6 million, cash dividends of $24.2 million and common stock purchased for
the treasury of $20.8 million.
Compared to 1992, cash dividends per share increased 31.9% over the three-year
period ended September 30, 1995. Cash dividends paid on Class A and Class B
common stock were 31 cents per share in 1995 and 27.5 cents per share in 1994
and 1993. The 1993 dividends included a one-time extraordinary dividend of two
cents per share in recognition of the company surpassing one billion dollars in
sales in 1992.
The company anticipates that cash flows from operations and available credit
will be sufficient to fund operational requirements in future years. During
1996, the company expects that cash will continue to be used for acquisitions,
capital expenditures, new product development, market expansion, retirement of
debt and dividend payments. The company may also repurchase additional shares
of its common stock depending on market conditions. In 1993 and 1994, the
Board of Directors approved the purchase of up to 2.0 million shares of common
stock. As of September 30, 1995, 1.1 million shares had been repurchased at a
total cost of approximately $20.8 million.
IMPACT OF NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards No. 121 ("Statement 121"),
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of", requires that long-lived assets and certain identifiable
intangibles of an entity be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. The company is required to comply with Statement 121 in fiscal
year 1997 and estimates that its adoption will not have a material effect on
the consolidated financial statements.
Statement of Financial Accounting Standards No. 123 ("Statement 123"),
"Accounting for Stock-Based Compensation", requires either the adoption of a
fair value based method of accounting for stock-based compensation or pro-forma
disclosures as if the fair value method was adopted. The company is required to
implement Statement 123 in fiscal year 1997 and estimates that its adoption
will not have a material effect on the consolidated financial statements.
INFLATION
The company was not significantly affected by inflation during the past three
years. Management continuously attempts to resist cost increases and
counteract the effects of inflation through productivity improvements, cost
reduction programs and price increases within the constraints of the highly
competitive markets in which the company operates.
<PAGE> 11
SELECTED FINANCIAL DATA
Alberto-Culver Company and Subsidiaries
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------
(In thousands, except per share data) 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
OPERATING RESULTS:
Net sales $1,358,219 1,216,119 1,147,990 1,091,286 873,719 795,825
Cost of products sold 682,589 602,749 564,260 534,979 424,566 383,410
Interest expense 9,946 8,630 9,661 11,665 6,822 7,890
Earnings before income taxes 84,242 71,078 65,129 61,356 47,928 54,704
Provision for income taxes 31,591 27,010 23,857 22,740 17,812 19,694
Net earnings 52,651 44,068 41,272 38,616 30,116 35,010
Net earnings per share:
Primary 1.89 1.57 1.44 1.36 1.06 1.30
Fully-diluted 1.87 1.57 1.44 1.36 1.06 1.30
---- ---- ---- ---- ---- ----
Weighted average shares outstanding:
Primary 27,849 28,042 28,717 28,363 28,303 26,831
Fully-diluted 28,576 28,081 28,717 28,363 28,303 26,831
------ ------ ------ ------ ------ ------
FINANCIAL CONDITION:
Cash, cash equivalents and short-term
investments $146,985 50,362 73,947 80,158 84,595 82,012
Working capital 301,706 185,747 205,050 193,080 212,268 192,616
Current ratio 2.28 TO 1 1.86 to 1 2.05 to 1 1.88 to 1 2.11 to 1 2.34 to 1
Property, plant and equipment, net 157,791 132,881 124,449 121,703 114,910 81,772
Total assets 815,086 610,208 593,046 610,400 574,413 443,560
Long-term debt 83,094 42,976 80,184 84,549 97,820 60,728
Convertible subordinated debentures 100,000 -- -- -- -- --
Stockholders' equity 370,903 326,970 298,857 286,222 249,431 230,868
Cash dividends per share* .310 .275 .275 .235 .215 .195
--------- --------- --------- --------- --------- ---------
</TABLE>
* Dividends per share on Class A common stock and Class B common stock
have been equal since the Class A shares were issued in April, 1986.
Dividends paid in fiscal 1993 include a one-time extraordinary
dividend of two cents per share in recognition of the company
surpassing one billion dollars in sales for the fiscal year ended
September 30, 1992.
ANNUAL 10-K REPORT
Stockholders may obtain a copy of the company's 1995 Form 10-K Report filed
with the Securities and Exchange Commission without charge by writing to the
Corporate Secretary, Alberto-Culver Company, 2525 Armitage Avenue, Melrose
Park, Illinois 60160.
<PAGE> 12
MARKET PRICE OF COMMON STOCK AND CASH DIVIDENDS PER SHARE
Alberto-Culver Company and Subsidiaries
The high and low sales prices of both classes of the company's common stock on
the New York Stock Exchange and cash dividends per share in each quarter of
fiscal years 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
Market Price Range Cash
---------------------------------------------------- Dividends
1995 1994 Per Share
----------------------- ----------------------
HIGH LOW High Low 1995 1994
------- ------- ------- ------- ------ ----
<S> <C> <C> <C> <C> <C> <C>
Class A (NYSE Symbol ACVA):
First Quarter $24-7/8 20-7/8 21-1/8 17-3/8 $.070 .065
Second Quarter 26-5/8 23 21-7/8 19 .080 .070
Third Quarter 28 24-7/8 20-3/8 17-3/4 .080 .070
Fourth Quarter 27-1/4 24-3/4 22-7/8 19 .080 .070
------- ------- ------- ------- ------ ----
$.310 .275
Class B (NYSE Symbol ACV):
First Quarter $27-3/8 21-3/4 23-3/4 20-1/8 $.070 .065
Second Quarter 30-7/8 25-7/8 25-1/8 20-3/4 .080 .070
Third Quarter 32-1/2 29-5/8 22-1/4 19-3/8 .080 .070
Fourth Quarter 31-1/2 27-7/8 24-1/2 20-3/4 .080 .070
------- ------- ------- ------- ------ ----
$.310 .275
</TABLE>
As of November 24, 1995, stockholders of record totaled 1,096 for Class A
shares and 1,262 for Class B shares.
<PAGE> 13
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Alberto-Culver Company and Subsidiaries
Year ended September 30,
------------------------
(Dollars in thousands, except per share data) 1995 1994 % Change
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $1,358,219 1,216,119 11.7%
---------- ---------- ----
Earnings before provision for income taxes $84,242 71,078 18.5%
---------- ---------- ----
Net earnings $52,651 44,068 19.5%
---------- ---------- ----
Net earnings per share:
Primary $1.89 1.57 20.4%
Fully-diluted 1.87 1.57 19.1%
---------- ---------- ----
Cash dividends per share for Class A and Class B common stock $.310 .275 12.7%
---------- ---------- ----
Weighted average shares outstanding:
Primary 27,849,000 28,042,000 -0.7%
Fully-diluted 28,576,000 28,081,000 1.8%
---------- ---------- ----
</TABLE>
<PAGE> 1
EXHIBIT 21
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Subsidiaries of the Registrant
<TABLE>
<CAPTION>
State or
Other
Jurisdiction
of
Subsidiary Incorporation
---------- -------------
<S> <C>
Alberto-Culver (Australia) Pty. Ltd. Australia
Alberto-Culver Canada, Inc. Canada
Alberto-Culver Company (U.K.), Limited United Kingdom
Alberto-Culver de Mexico, S.A. de C.V. Mexico
Alberto-Culver International, Inc. Delaware
Alberto-Culver (P.R.), Inc. Delaware
Alberto-Culver USA, Inc. Delaware
BDM Grange, Ltd. New Zealand
Cederroth Holding B.V. Holland
Cederroth International AB Sweden
CIFCO, Inc. Delaware
Indola Cosmetics, B.V. The Netherlands
Indola SpA Italy
Sally Beauty Company, Inc. Delaware
</TABLE>
Subsidiaries of the company omitted from the above table, considered in the
aggregate, would not be considered significant.
<PAGE> 1
EXHIBIT 23
Consent of KPMG Peat Marwick LLP
The Board of Directors and Stockholders
Alberto-Culver Company:
We consent to incorporation by reference in the Registration Statements on Form
S-8 (Numbers 33-36051, 33-47748, 33-62693, 33-62699 and 33-62701) of
Alberto-Culver Company of our reports dated October 30, 1995, relating to the
consolidated balance sheets of Alberto-Culver Company and subsidiaries as of
September 30, 1995 and 1994 and the related consolidated statements of
earnings, retained earnings and cash flows and related schedule for each of the
years in the three year period ended September 30, 1995 which reports appear or
are incorporated by reference in the September 30, 1995 annual report on Form
10-K of Alberto-Culver Company.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Chicago, Illinois
December 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet as of September 30, 1995 and the consolidated
statement of earnings for the year ended September 30, 1995 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> SEP-30-1994
<PERIOD-END> SEP-30-1995
<CASH> 142,585
<SECURITIES> 4,400
<RECEIVABLES> 134,145
<ALLOWANCES> 5,663
<INVENTORY> 248,529
<CURRENT-ASSETS> 536,545
<PP&E> 286,034
<DEPRECIATION> 128,243
<TOTAL-ASSETS> 815,086
<CURRENT-LIABILITIES> 234,839
<BONDS> 183,094
<COMMON> 7,526
0
0
<OTHER-SE> 363,377
<TOTAL-LIABILITY-AND-EQUITY> 815,086
<SALES> 1,358,219
<TOTAL-REVENUES> 1,358,219
<CGS> 682,589
<TOTAL-COSTS> 682,589
<OTHER-EXPENSES> 584,856
<LOSS-PROVISION> 3,277
<INTEREST-EXPENSE> 9,946
<INCOME-PRETAX> 84,242
<INCOME-TAX> 31,591
<INCOME-CONTINUING> 52,651
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 52,651
<EPS-PRIMARY> 1.89
<EPS-DILUTED> 1.87
</TABLE>
