UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): Commission File Number
March 3, 1994 1-8233
USF&G CORPORATION
(Exact Name of Registrant as Specified in Charter)
Maryland 52-1220567
(State or Other Jurisdiction (IRS Employer Identification No.)
of Incorporation)
100 Light Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices)
(410) 547-3000
(Registrant's telephone number, including area code)
USF&G CORPORATION
FORM 8-K
______________________
Item 5. Other Events.
USF&G Corporation (the "Corporation") today completed the sale
of $245,000,000 principal amount at maturity of Zero Coupon
Convertible Subordinated Notes due 2009. The Notes were issued
at an issue price of $512.98 per $1,000 principal amount at
maturity, which represents a yield to maturity of 4.5% per
annum. Each Note in the principal amount of $1,000 at maturity
is convertible at the option of the holder at any time on or
prior to maturity (unless previously redeemed or purchased) into
Common Stock of the Corporation at a conversion rate of 29.499
shares per Note, representing an effective initial conversion
price of $17.39 per share, based on the issue price of $512.98
per Note.
The proceeds of the offering, approximating $121,900,000 after
underwriting fees and estimated expenses, will be used to redeem
the $99,000,000 outstanding principal amount of the
Corporation's 8 7/8% Notes due 1996 and to retire other
existing indebtedness of the Corporation. The form of the Zero
Coupon Convertible Subordinated Note due 2009 is attached hereto
as Exhibit 4.
USF&G CORPORATION
FORM 8-K
______________________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Current Report on Form
8-K to be signed on its behalf by the undersigned hereunto duly
authorized.
USF&G CORPORATION
By: DAN L. HALE
Dan L. Hale
Executive Vice President, Chief
Financial Officer and Principal
Accounting Officer
March 3, 1994
INDEX TO EXHIBITS TO CURRENT
REPORT ON FORM 8-K
Exhibit 4 Form of Zero Coupon Convertible
Subordinated Note due 2009
FORM OF NOTE
[FORM OF FACE OF NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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 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.
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF PRINCIPAL
AMOUNT AT MATURITY OF THIS NOTE IS $487.02, THE ISSUE DATE IS MARCH 3, 1994,
AND THE YIELD TO MATURITY IS 4.5% COMPOUNDED SEMI-ANNUALLY.
USF&G CORPORATION
Zero Coupon Convertible Subordinated Note due 2009
CUSIP No. 903290-AD6
No. _____
Issue Date: March 3, 1994
Issue Price: $512.98 Original Issue Discount: $487.02
(for each $1,000 Principal Amount (for each $1,000 Principal Amount
at Maturity) at Maturity)
USF&G CORPORATION, a Maryland corporation, promises to pay to _________________
or registered assigns, the Principal Amount at Maturity of ______________
Dollars on March 3, 2009.
This Note shall not bear interest except as specified on the other side of this
Note. Original Issue Discount will accrue as specified on the other side of
this Note. This Note is convertible as specified on the other side of this
Note.
Additional provisions of this Note are set forth on the other side of this
Note.
Dated: March 3, 1994 USF&G CORPORATION
[SEAL] By:_______________________________________
Attest: ______________________________ Title:Vice President-Treasurer
Title: Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
CHEMICAL BANK, as Trustee,
certifies that this is one of the Notes
referred to in the within-mentioned Indenture.
By: _________________________________________
Authorized Officer
[FORM OF REVERSE SIDE OF NOTE]
Zero Coupon Convertible Subordinated Note Due 2009
1. Interest and Original Issue Discount
This Note shall not bear interest, except that if the Principal Amount at
Maturity hereof or any portion of such Principal Amount at Maturity is not paid
when due (whether upon acceleration pursuant to Section 502 of the Indenture,
upon the date set for payment of the Redemption Price pursuant to paragraph 5
hereof, upon the date set for payment of the Purchase Price or Change in
Control Purchase Price pursuant to paragraph 6 hereof or upon the Stated
Maturity of this Note), then in each such case the overdue amount shall, to the
extent permitted by law, bear interest at the rate of 4.5% per annum,
compounded semi-annually, which interest shall accrue from the date such
overdue amount was originally due to the date payment of such amount,
including interest thereon, has been made or duly provided for. All such
interest shall be payable on demand. The accrual of such interest on overdue
amounts shall be in lieu of, and not in addition to, the continued accrual of
Original Issue Discount.
Original Issue Discount (the difference between the Issue Price and the
Principal Amount at Maturity of the Note), in the period during which a Note
remains outstanding shall accrue at 4.5% per annum, on a semi-annual bond
equivalent basis using a 360-day year composed of twelve 30-day months, from
the Issue Date (as set forth on the face of this Note) of this Note.
2. Method of Payment
Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of Redemption Prices, Purchase Prices, Change in Control
Purchase Prices and at Stated Maturity to Holders who surrender Notes to a
Paying Agent to collect such payments in respect of the Notes. The Company
will pay cash amounts in money of the United States that at the time of payment
is legal tender for payment of public and private debts. However, the Company
may make such cash payments by check payable in such money.
3. Paying Agent, Conversion Agent and Registrar
Initially, Chemical Bank, a New York corporation (the "Trustee"), will act as
Paying Agent, Conversion Agent and Registrar. The Company may appoint and
change any Paying Agent, Conversion Agent, Registrar or co-registrar without
notice, other than notice to the Trustee, except that the Company will maintain
at least one Paying Agent in the State of New York, City of New York, Borough
of Manhattan. The Company or any of its Subsidiaries or any of their
Affiliates may act as Paying Agent, Conversion Agent, Registrar or co-
registrar.
4. Indenture
The Company issued the Notes as a series of Securities under an Indenture dated
as of January 28, 1994 (the "Indenture"), between the Company and the Trustee.
The terms of the Notes include those stated herein, those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended and as in effect from time to time (the
"TIA"). In the case of any inconsistency between terms and provisions
contained herein and terms and provisions contained in the Indenture, the terms
and provisions of this Note shall govern. Capitalized terms used herein and
not defined herein have the meanings ascribed thereto in the Indenture. The
Notes are subject to all such terms (except to the extent described in the
third sentence of this paragraph), and Holders are referred to the Indenture
and the TIA for a statement of those terms.
The Notes are general unsecured obligations of the Company limited to
$245,000,000 aggregate Principal Amount at Maturity.
5. Redemption at the Option of the Company
5.1. Redemption Dates; Redemption Process. No sinking fund is provided for
the Notes. The Notes are redeemable as a whole, or from time to time in part,
at any time at the option of the Company at the Redemption Prices set forth
below, provided that the Notes are not redeemable prior to March 3, 1999.
The table below shows Redemption Prices of a Note per $1,000 Principal Amount
at Maturity on the dates shown below and at Stated Maturity, which prices
reflect accrued Original Issue Discount calculated through each such date. The
Redemption Price of a Note redeemed between such dates shall include an
additional amount reflecting the additional Original Issue Discount accrued
since the next preceding date in the table.
<TABLE>
<CAPTION>
Redemption Date (1) (2) (3)
NOTE Accrued Original Redemption
Issue Price Issue Price
Discount (1)+(2)
at 4.5%
<S> <C> <C> <C>
March 3, 1999 . . . . . . . . . . . .$512.98 $127.84 $640.82
March 3, 2000 . . . . . . . . . . . . 512.98 157.00 669.98
March 3, 2001 . . . . . . . . . . . . 512.98 187.49 700.47
March 3, 2002 . . . . . . . . . . . . 512.98 219.36 732.34
March 3, 2003 . . . . . . . . . . . . 512.98 252.69 765.67
March 3, 2004 . . . . . . . . . . . . 512.98 287.53 800.51
March 3, 2005 . . . . . . . . . . . . 512.98 323.96 836.94
March 3, 2006 . . . . . . . . . . . . 512.98 362.04 875.02
March 3, 2007 . . . . . . . . . . . . 512.98 401.86 914.84
March 3, 2008 . . . . . . . . . . . . 512.98 443.49 956.47
At Stated Maturity . . . . . . . . . 512.98 487.02 1,000.00
</TABLE>
5.2. Right to Redeem; Notices to Trustee. If the Company elects to redeem
Notes pursuant to this paragraph 5, it shall notify the Trustee in writing of
the Redemption Date, the Principal Amount at Maturity of Notes to be redeemed
and the Redemption Price. The Company shall give the notice to the Trustee
provided for in this subparagraph 5.2 by a Company Order, in the case of any
redemption of less than all of the Notes, at least 60 days before the
Redemption Date and, in the case of any redemption of all of the Notes, on or
prior to the date of notice of redemption, subject to the provisions of
paragraph 7 of this Note (in each case, unless a shorter notice shall be
satisfactory to the Trustee).
5.3. Selection of Notes to Be Redeemed. If less than all the Notes are to
be redeemed, the Trustee shall select the Notes to be redeemed pro rata or by
lot or by any other method the Trustee considers fair and appropriate (so long
as such method is not prohibited by applicable law or by the rules of any stock
exchange on which the Notes are then listed). The Trustee shall make the
selection at least 30 days but not more than 60 days before the Redemption Date
from outstanding Notes not previously called for redemption. The Trustee may
select for redemption portions of the Principal Amount at Maturity of Notes
that have denominations larger than $1,000. Notes and portions of them which
the Trustee selects shall be in Principal Amounts at Maturity of $1,000 or an
integral multiple of $1,000. For all purposes of this Note and the Indenture,
unless the context otherwise requires, all provisions relating to the
redemption of Notes shall relate, in the case of any Note redeemed or to be
redeemed only in part, to the portion of the Principal Amount at Maturity of
such Note (and accrued Original Issue Discount thereon) which has been or is to
be redeemed. The Trustee shall notify the Company promptly of the Notes or
portions of Notes to be redeemed. If any Note selected for partial redemption
is converted in part before termination of the conversion right with respect to
the portion of the Note so selected, the converted portion of such Note shall
be deemed (so far as may be) to be the portion selected for redemption. Upon
any redemption of fewer than all the Notes, the Company and the Trustee may
treat as outstanding any Notes surrendered for conversion during the period of
15 days next preceding the mailing of a notice of redemption, and need not
treat as outstanding any Note authenticated and delivered during such period in
exchange for the unconverted portion of any Note converted in part during the
period.
5.4. Deposit of Redemption Price. Prior to or on the Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company or a Subsidiary
or an Affiliate of either of them is the Paying Agent, shall segregate and hold
in trust as provided in Section 1003 of the Indenture) money sufficient to pay
the Redemption Price of all Notes to be redeemed on that date other than Notes
or portions of Notes called for redemption which on or prior thereto have been
delivered by the Company to the Trustee for cancellation or have been
converted. The Paying Agent shall as promptly as practicable return to the
Company any money not required for that purpose because of conversion of Notes
pursuant to paragraph 9 hereof. If such money is then held by the Company in
trust and is not required for such purpose it shall be discharged from such
trust. If money sufficient to pay the Redemption Price of all Notes (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent prior to or on the Redemption Date, immediately after such
Redemption Date Original Issue Discount shall cease to accrue on such Notes (or
portions thereof) and the Holder thereof shall have no other rights as such
(other than the right to receive the Redemption Price upon surrender of such
Note).
5.5 Notes Redeemed in Part. Upon surrender of a Note that is redeemed in
part, the Company shall execute and the Trustee shall authenticate and deliver
(or transfer by book-entry) to the Holder a new Note in an authorized
denomination equal in Principal Amount at Maturity to the unredeemed portion of
the Note surrendered.
6. Purchase By the Company at the Option of the Holder
6.1. Purchase Dates; Purchase Prices. Subject to the terms and conditions
described below, the Company shall become obligated to purchase, at the Option
of the Holder, the Notes held by such Holder on the following Purchase Dates
and at the following Purchase Prices per $1,000 Principal Amount at Maturity:
Purchase Date Purchase Price
March 3, 1999 $640.82
March 3, 2004 800.51
The Company shall become so obligated upon:
(1) delivery to the Paying Agent by the Holder of a written notice of
purchase (a "Purchase Notice") in the form provided by the Company in its
Company Notice pursuant to subparagraph 6.1.4 of this Note at any time from
the opening of business on the date that is 20 Business Days prior to a
Purchase Date until the close of business on such Purchase Date stating:
(A) if applicable, the certificate number of the Note which the Holder will
deliver or transfer by book-entry to be purchased;
(B) the portion of the Principal Amount at Maturity of the Note which the
Holder will deliver or transfer by book-entry to be purchased, which
portion must be $1,000 or an integral multiple thereof;
(C) that such Note shall be purchased as of the Purchase Date pursuant to
the terms and conditions specified in this paragraph 6; and
(D) in the event the Company elects, pursuant to subparagraph 6.1.1, to pay
the Purchase Price to be paid as of such Purchase Date, in whole or in part, in
shares of Common Stock but such portion of the Purchase Price shall ultimately
be payable to such Holder entirely in cash because any of the conditions to
payment of the Purchase Price in Common Stock is not satisfied prior to the
close of business on such Purchase Date, as set forth in subparagraph 6.1.3,
whether such Holder elects (i) to withdraw such Purchase Notice as to some or
all of the Notes to which such Purchase Notice relates (stating the Principal
Amount at Maturity and, if applicable, certificate numbers of the Notes as to
which such withdrawal shall relate), or (ii) to receive cash in respect of the
entire Purchase Price for all Notes (or portions thereof) to which such
Purchase Notice relates; and
(2) delivery (or transfer by book-entry) of such Note to the Paying Agent
prior to, on or after the Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent, such delivery (or transfer by
book-entry) being a condition to receipt by the Holder of the Purchase Price
therefor; provided, however, that such Purchase Price shall be so paid pursuant
to this paragraph 6 only if the Note so delivered (or transferred) to the
Paying Agent shall conform in all respects to the description thereof in the
related Purchase Notice.
If a Holder, in such Holder's Purchase Notice and in any written notice of
withdrawal delivered by such Holder pursuant to the terms of subparagraph 6.3,
fails to indicate such Holder's choice with respect to the election set forth
in clause (D) of subparagraph 6.1(1), such Holder shall be deemed to have
elected to receive cash in respect of the Purchase Price for all Notes subject
to such Purchase Notice in the circumstances set forth in such clause (D).
The Company shall purchase from the Holder thereof, pursuant to this
subparagraph 6.1, a portion of a Note if the Principal Amount at Maturity of
such portion is $1,000 or an integral multiple of $1,000. Provisions of this
Note and the Indenture that apply to the purchase of all of a Note also apply
to the purchase of such portion of such Note. Any purchase by the Company
contemplated pursuant to the provisions of this subparagraph 6.1 shall be
consummated by the delivery of the consideration to be received by the Holder
by the delivery of cash, if applicable, no later than the second Business Day,
or by the delivery and transfer of Common Stock (and cash in lieu of fractional
interests therein) if applicable, no later than the seventh Business Day, in
each case following the later of the Purchase Date and the time of delivery (or
transfer by book-entry) of the Note. Notwithstanding anything herein to the
contrary, any Holder delivering to the Paying Agent the Purchase Notice contem
plated by this subparagraph 6.1 shall have the right to withdraw such Purchase
Notice at any time prior to the close of business on the Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with subparagraph 6.3. The Paying Agent shall promptly (once per day, but, in
any event, prior to 10:00 a.m., New York time, on the Business Day following
the Purchase Date) notify the Company of the receipt by it of any Purchase
Notice or written notice of withdrawal thereof.
6.1.1. Company's Right to Elect Manner of Payment of Purchase Price. The
Notes to be purchased pursuant to subparagraph 6.1 may be paid for, at the
election of the Company (which election may be exercised separately with
respect to each Purchase Date), in U.S. legal tender ("cash") or Common Stock,
or in any combination of cash and Common Stock, subject to the conditions set
forth in subparagraphs 6.1.2 and 6.1.3. The Company shall designate, in the
Company Notice delivered pursuant in subpar agraph 6.1.4, whether the Company
will purchase the Notes for cash or Common Stock, or, if a combination thereof,
the percentages of the Purchase Price of Notes in respect of which it will pay
in cash or Common Stock; provided that the Company will pay cash for fractional
interests in Common Stock. For purposes of determining the existence of
potential fractional interests, all Notes subject to purchase by the Company
held by a Holder shall be considered together (regardless of how many separat e
certificates are to be delivered). Each Holder whose Notes are purchased
pursuant to this subparagraph 6.1 shall receive the same percentage of cash or
Common Stock in payment of the Purchase Price for such Notes, except (i) as
provided in subparagraph 6.1.3 with regard to the payment of cash in lieu of
fractional shares of Common Stock and (ii) in the event that the Company is
unable to purchase the Notes of a Holder or Holders for Common Stock because
any necessary qualifications or registrations of the Common Stock under
applicable federal or state securities laws cannot be obtained, the Company may
purchase the Notes of such Holder or Holders for cash. The Company may not
change its election with respect to the consideration (or com ponents or
percentages of components thereof) to be paid once the Company has given its
Company Notice to Holders except pursuant to this subparagraph 6.1.1 or
pursuant to subparagraph 6.1.3 in the event of a failure to satisfy, prior to
the close of business on the Purchase Date, any condition to the payment of the
Purchase Price, in whole or in part, in Common Stock.
At least five Business Days before the Company Notice Date, the Company shall
deliver an Officers' Certificate to the Trustee specifying:
(i) the manner of payment selected by the Company;
(ii) the information required by subparagraph 6.1.4;
(iii) if the Company elects to pay the Purchase Price, or a specified
percentage thereof, in Common Stock, that the conditions to such manner
of payment set forth in subparagraph 6.1.3 have been or will be
complied with; and
(iv) whether the Company desires the Trustee to give the Company Notice
required by subparagraph 6.1.4.
6.1.2. Purchase with Cash. In accordance with subparagraph 6.4, at the option
of the Company, the Purchase Price of Notes in respect of which a Purchase
Notice pursuant to subparagraph 6.1 has been given, or a specified percentage
thereof, may be p aid by the Company with cash equal to the aggregate Purchase
Price of such Notes or specified percentage thereof. If the Company elects to
purchase Notes with cash, the Company Notice, as provided in subparagraph
6.1.4, shall be sent to Holders (and to beneficial owners as required by
applicable law) not less than 20 Business Days prior to such Purchase Date (the
"Company Notice Date").
6.1.3. Payment by Issuance of Common Stock. In accordance with subparagraph
6.4, at the option of the Company, the Purchase Price of Notes in respect of
which a Purchase Notice pursuant to subparagraph 6.1 has been given, or a
specified percentage thereof, may be paid by the Company by the issuance of a
number of shares of Common Stock equal to the quotient obtained by dividing (i)
the amount of cash to which the Holders would have been entitled had the
Company elected to pay all or such specified percentage, as the case may be, of
the Purchase Price of such Notes in cash by (ii) the Market Price of a share of
Common Stock, subject to the next succeeding paragraph.
The Company will not issue a fractional share of Common Stock in payment of the
Purchase Price. Instead, the Company will pay cash for the current market
value of the fractional share. The current market value of a fractional share
shall be determined, to the nearest 1/1,000th of a share, by multiplying the
Market Price of a full share by the fractional amount and rounding the product
to the nearest whole cent. If a Holder elects to have more than one Note
purchased, the number of shares of Common Stock shall be based on the aggregate
amount of Notes to be purchased. If the Company elects to purchase the Notes
by the issuance of shares of Common Stock, the Company Notice, as provided in
subparagraph 6.1.4, shall be sent to the Holders ( and to beneficial owners as
required by applicable law) not later than the Company Notice Date.
The Company's right to exercise its election to purchase the Notes pursuant to
subparagraph 6.1 through the issuance of shares of Common Stock shall be
conditioned upon:
(i) the Company's not having given its Company Notice of an election to pay
entirely in cash and its giving of a timely Company Notice of election
to purchase all or a specified percentage of the Notes with Common
Stock as provided herein;
(ii) the registration of the shares of Common Stock to be issued in respect
of the payment of the Purchase Price under the Securities Act or the
Exchange Act, in each case, if required;
(iii) any necessary qualification or registration under applicable state
securities laws or the availability of an exemption from such
qualification and registration; and
(iv) the receipt by the Trustee of an Officers' Certificate and an Opinion
of Counsel each stating that (A) the terms of the issuance of the Common Stock
are in conformity with this Note and the Indenture and (B) the shares of Common
Stock to be i ssued by the Company in payment of the Purchase Price in respect
of Notes have been duly authorized and, when issued and delivered pursuant to
the terms of this Note and the Indenture in payment of the Purchase Price in
respect of the Notes, will be validly issued, fully paid and nonassessable and,
to the best of such counsel's knowledge, free from preemptive rights, and, in
the case of such Officers' Certificate, stating that conditions (i), (ii) and
(iii) above and the condition set forth in t he second succeeding sentence have
been satisfied and, in the case of such Opinion of Counsel, stating that
conditions (ii) and (iii) above have been satisfied.
Such Officers' Certificate shall also set forth the number of shares of Common
Stock to be issued for each $1,000 Principal Amount at Maturity of Notes and
the Sale Price of a share of Common Stock on each Trading Day during the period
during which t he Market Price is calculated . The Company may pay the
Purchase Price (or any portion thereof) in Common Stock only if the information
necessary to calculate the Market Price is published in The Wall Street Journal
or a daily newspaper of national circulation. If the foregoing conditions are
not satisfied with respect to a Holder or Holders prior to the close of
business on the Purchase Date and the Company has elected to purchase the Notes
pursuant to this subparagraph 6.1 through the issuan ce of shares of Common
Stock, the Company shall pay the entire Purchase Price of the Notes of such
Holder or Holders in cash.
6.1.4. Notice of Election. The Company's notice of election to purchase with
cash or Common Stock or any combination thereof shall be sent to the Holders
(and to beneficial owners as required by applicable law) in the manner provided
in Section 106 of the Indenture at the time specified in subparagraph 6.1.2 or
6.1.3, as applicable (the "Company Notice"). Such Company Notice shall state
the manner of payment elected and shall contain the following information:
In the event the Company has elected to pay the Purchase Price (or a specified
percentage thereof) with Common Stock, the Company Notice shall:
(1) state that each Holder will receive Common Stock with a Market Price
determined as of a specified date prior to the Purchase Date equal to the
Purchase Price or such specified percentage of the Purchase Price of the Notes
held by such Holder (except any cash amount to be paid in lieu of fractional
shares);
(2) set forth the method of calculating the Market Price of the Common
Stock; and
(3) state that because the Market Price of Common Stock will be determined
prior to the Purchase Date, Holders will bear the market risk with respect to
the value of the Common Stock to be received from the date such Market Price
is determined to the Purchase Date.
In any case, each Company Notice shall include a form of Purchase Notice to be
completed by a Holder and shall state:
(i) the Purchase Price and the Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion Agent;
(iii) that Notes as to which a Purchase Notice has been given may be
converted pursuant to paragraph 9 hereof only if the applicable
Purchase Notice has been withdrawn in accordance with the terms of
subparagraph 6.3 of this paragraph 6;
(iv) that Notes must be surrendered (or transferred by book-entry) to the
Paying Agent to collect payment;
(v) that the Purchase Price for any Note as to which a Purchase Notice has
been given and not withdrawn will be paid by the delivery of cash no later than
the second Business Day, or by the delivery or transfer of Common Stock (and
cash in lieu of any fractional interests therein), if applicable, no later than
the seventh Business Day, in each case following the later of the Purchase Date
and the time of surrender (or transfer by book-entry) of such Note as described
in (iv);
(vi) the procedures the Holder must follow to exercise rights under this
subparagraph 6.1 and a brief description of those rights;
(vii) briefly, the conversion rights of the Notes; and
(viii) the procedures for withdrawing a Purchase Notice (including, without
limitation, the procedures for a conditional withdrawal pursuant to the
terms of subparagraph 6.1(1)(D) or subparagraph 6.3).
At the Company's request, the Trustee shall give such Company Notice in the
Company's name and at the Company's expense; provided, however, that, in all
cases, the text of such Company Notice shall be prepared by the Company. Upon
determination of the actual number of shares of Common Stock to be issued for
each $1,000 Principal Amount at Maturity of Notes, the Company will publish
such determination in The Wall Street Journal or a daily newspaper of national
circulation.
6.1.5. Covenants of the Company. The Company warrants that all shares of
Common Stock delivered upon purchase of the Notes shall be newly issued shares,
shall be fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim. The Company shall use its best efforts
to list or cause to have quoted any shares of Common Stock to be issued to
purchase Notes on each national securities exchange or over-the-counter or
other domestic market on which the Common Stock is then listed or quoted. The
Company will promptly inform the Trustee in writing of such listing.
6.1.6. Procedure Upon Purchase. The Company shall deposit cash (in respect of
a cash purchase under subparagraph 6.1.2 or for fractional interests, as
applicable) or shares of Common Stock, or a combination thereof, as applicable,
at the time and in the manner provided in subparagraph 6.4, sufficient to pay
the aggregate Purchase Price of all Notes to be purchased pursuant to this
subparagraph 6.1. In the time and manner provided in subparagraph 6.3, the
Company shall deliver through the Paying Agent to each Holder entitled thereto
cash (in respect of a cash purchase) or a certificate or certificates for the
number of full shares of Common Stock issuable in payment of the Purchase Price
and cash in lieu of any fractional interests. The Person in whose name the
certificate for Common Stock is registered (or such transfer is executed) shall
be treated as a holder of record of shares of Common Stock on the Business Day
following the related Purchase Date. No payment or adjustment will be made for
dividends on the Common Stock the record date for which occurred on or prior to
the Purchase Date.
6.1.7. Taxes. If a Holder of a Note is paid in Common Stock, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on such
issue of shares of Common Stock. However, the Holder shall pay any such tax
which is due because the Holder requests the shares of Common Stock to be
issued in a name other than the Holder's name. The Paying Agent may refuse to
deliver the certificates representing the Common Stock being issued, or to
transfer such shares of Common Stock to an account held, in a name other than
the Holder's name until the Paying Agent receives a sum sufficient to pay any
tax which will be due because the shares of Common Stock are to be issued, or
transferred to an account held, in a name other than the Holder's name.
Nothing herein shall preclude any income tax withholding required by law or
regulation.
6.2. Purchase of Notes at Option of the Holder Upon Change in Control. (a)
If on or prior to March 3, 1999 there shall have occurred a Change in Control,
Notes shall be purchased by the Company, at the option of the Holder thereof,
at a price (the "Change in Control Purchase Price") equal to the Issue Price
plus Original Issue Discount accrued through the date that is 35 Business Days
after the occurrence of the Change in Control (the "Change in Control Purchase
Date"), subject to satisfaction by or on behalf of the Holder of the
requirements set forth in subparagraph 6.2(c) below.
A "Change in Control" shall be deemed to have occurred at such time as either
of the following events shall occur:
(i) There shall be consummated any consolidation or merger of or statutory
share exchange involving the Company in which the Company is not the
continuing, surviving or successor corporation or pursuant to which the Common
Stock would be converted into cash, securities or other property, other than a
consolidation or merger of or statutory share exchange involving the Company in
which the holders of the Common Stock immediately prior to the consolidation,
merger or share exchange have, directly or indirectly, at least a majority of
the common equity of the continuing, surviving or successor corporation
immediately after such consolidation, merger or share exchange; or
(ii) There is a report filed on Schedule 13D or 14D-1 (or any successor
schedule, form or report) pursuant to the Exchange Act, disclosing that any
Person (for the purposes of this subparagraph 6.2 only, as the term "Person" is
used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become
the beneficial owner (as the term "beneficial owner" is defined under Rule 13d-
3 or any successor rule or regulation promulgated under the Exchange Act) of
50% or more of the voting power of the Common Stock then outstanding; provided,
however, that a Person shall not be deemed beneficial owner of, or to own
beneficially, (A) any securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange
thereunder, or (B) any securities if such beneficial ownership (1) arises
solely as a result of a revocable proxy delivered in response to a proxy or
consent solicitation made pursuant to the applicable rules and regulations
under the Exchange Act, and (2) is not also then reportable on Schedule 13D (or
any successor schedule) under the Exchange Act.
Notwithstanding the foregoing provisions of this subparagraph 6.2, a Change in
Control shall not be deemed to have occurred by virtue of the Company, any
Subsidiary, any employee stock ownership plan or any other employee benefit
plan of the Company or any Subsidiary, or any Person holding Common Stock for
or pursuant to the terms of any such employee stock ownership or benefit plan,
filing or becoming obligated to file a report under or in response to Schedule
13D or Schedule 14D-1 (or any successor schedule, form or report) under the
Exchange Act disclosing beneficial ownership by it of shares of Common Stock,
whether in excess of 50% or otherwise.
(b) Within 15 Business Days after the occurrence of a Change in Control,
the Company shall mail a written notice of Change in Control by first-class
mail to the Trustee and to each Holder (and to beneficial owners as required by
applicable law) and shall cause a copy of such notice to be published in The
Wall Street Journal or a daily newspaper of national circulation. The notice
shall include a form of Change in Control Purchase Notice to be completed by
the Holder and shall state:
(1) briefly, the events causing a Change in Control and the date of such
Change in Control;
(2) the date by which the Change in Control Purchase Notice pursuant to
this subparagraph 6.2 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) briefly, the conversion rights of the Notes;
(6) the name and address of the Paying Agent and the Conversion Agent;
(7) the Conversion Rate and that gain or loss for federal income tax
purposes may be realized on the exchange;
(8) that Notes as to which a Change in Control Purchase Notice has been
given may be converted pursuant to paragraph 9 hereof only if the
Change in Control Purchase Notice has been withdrawn in accordance with
the terms of subparagraph 6.3;
(9) that Notes must be surrendered (or transferred by book-entry) to the
Paying Agent to collect payment;
(10) that the Change in Control Purchase Price for any Note as to which a
Change in Control Purchase Notice has been duly given and not withdrawn will be
paid on the second Business Day following the later of the Change in Control
Purchase Date and the time of surrender (or transfer by book-entry) of such
Note as described in (9);
(11) briefly, the procedures the Holder must follow to exercise rights under
this subparagraph 6.2; and
(12) the procedures for withdrawing a Change in Control Purchase Notice.
At the Company's request upon at least five Business Days' notice, the Trustee
shall give such notice of Change in Control in the Company's name and at the
Company's expense; provided, however, that, in all cases, the text of such
notice of Change in Control shall be prepared by the Company.
(c) A Holder may exercise its rights specified in subparagraph 6.2 upon
delivery of a written notice of purchase (a "Change in Control Purchase
Notice") in the form provided by the Company in its notice pursuant to
subparagraph 6.2(b) of this Note to the Paying Agent at any time prior to the
close of business on the Change in Control Purchase Date, stating:
(1) if applicable, the certificate number of the Note which the Holder will
deliver (or transfer by book-entry) to be purchased;
(2) the portion of the Principal Amount at Maturity of the Note which the
Holder will deliver (or transfer by book-entry) to be purchased, which
portion must be $1,000 or an integral multiple thereof; and
(3) that such Note shall be purchased pursuant to the terms and conditions
specified in this paragraph 6.
The delivery (or transfer by book-entry) of such Note to the Paying Agent prior
to, on or after the Change in Control Purchase Date (together with all
necessary endorsements) at the offices of the Paying Agent shall be a condition
to the receipt by t he Holder of the Change in Control Purchase Price therefor;
provided, however, that such Change in Control Purchase Price shall be so paid
pursuant to this subparagraph 6.2 only if the Note so delivered (or
transferred) to the Paying Agent shall conf orm in all respects to the
description thereof set forth in the related Change in Control Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
subparagraph 6.2, a portion of a Note if the Principal Amount at Maturity of
such portion is $1,000 or an integral multiple of $1,000. Provisions of this
Note and the Indenture that apply to the purchase of all of a Note also apply
to the purchase of such portion of such Note. Any purchase by the Company
contemplated pu rsuant to the provisions of this subparagraph 6.2 shall be
consummated by the delivery of the consideration to be received by the Holder
promptly following the later of the Change in Control Purchase Date and the
time of delivery of the Note to the P aying Agent in accordance with this
subparagraph 6.2. Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Change in Control Purchase Notice
contemplated by this subparagraph 6.2(c) shall have the right to w ithdraw such
Change in Control Purchase Notice at any time prior to the close of business on
the Change in Control Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with subparagraph 6.3. The Paying
Agent shall promptly (once per day, but, in any event, prior to 10:00 a.m. New
York time, on the Business Day following the Change in Control Purchase Date)
notify the Company of the receipt by it of any Change in Control Purchase
Notice or written withdra wal thereof.
6.3. Effect of Purchase Notice or Change in Control Purchase Notice. Upon
receipt by the Paying Agent of the Purchase Notice or Change in Control
Purchase Notice specified in subparagraph 6.1 or subparagraph 6.2, as
applicable, the Holder of the Note in respect of which such Purchase Notice or
Change in Control Purchase Notice, as the case may be, was given shall (unless
such Purchase Notice or Change in Control Purchase Notice is withdrawn as
specified in the following two paragraphs) there after be entitled to receive
solely the Purchase Price or Change in Control Purchase Price, as the case may
be, with respect to such Note. Such Purchase Price or Change in Control
Purchase Price shall be paid to such Holder, subject to receipt of fu nds
and/or securities by the Paying Agent, on the second Business Day if paid in
cash or, in the case of a Purchase Price paid in Common Stock, on the seventh
Business Day, in either case following the later of (x) the Purchase Date or
Change in Cont rol Purchase Date, as the case may be, with respect to such Note
(provided the conditions in subparagraph 6.1 or subparagraph 6.2(c), as
applicable, have been satisfied) and (y) the time of delivery (or transfer by
book-entry) of such Note to the Pay ing Agent by the Holder thereof in the
manner required by subparagraph 6.1 or subparagraph 6.2(c), as applicable.
Notes in respect of which a Purchase Notice or Change in Control Purchase
Notice, as the case may be, has been given by the Holder ther eof may not be
converted pursuant to paragraph 9 hereof on or after the date of the delivery
of such Purchase Notice or Change in Control Purchase Notice, as the case may
be, unless such Purchase Notice or Change in Control Purchase Notice, as the
case may be, has first been validly withdrawn as specified in the following two
paragraphs.
A Purchase Notice or Change in Control Purchase Notice, as the case may be, may
be withdrawn by means of a written notice of withdrawal delivered to the office
of the Paying Agent in accordance with the Purchase Notice or Change in Control
Purchase Notice, as the case may be, at any time prior to the close of business
on the Purchase Date or the Change in Control Purchase Date, as the case may
be, specifying:
(1) if applicable, the certificate number of the Note in respect of which
such notice of withdrawal is being submitted,
(2) the Principal Amount at Maturity of the Note with respect to which such
notice of withdrawal is being submitted, and
(3) the Principal Amount at Maturity, if any, of such Note which remains
subject to the original Purchase Notice or Change in Control Purchase
Notice, as the case may be, and which has been or will be delivered for
purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the form set
forth in the preceding paragraph or may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of
subparagraph 6.1(1)(D) or (ii) a conditional withdrawal containing the
information set forth in subparagraph 6.1(1)(D) and the preceding paragraph
and contained in a written notice of withdrawal delivered to the Paying Agent
as set forth in the preceding paragraph.
There shall be no purchase of any Notes pursuant to subparagraph 6.1 (other
than through the issuance of Common Stock in payment of the Purchase Price,
including cash in lieu of fractional shares) or pursuant to subparagraph 6.2
if there has occurred (prior to, on or after, as the case may be, the giving,
by the Holders of such Notes, of the required Purchase Notice or Change in
Control Purchase Notice, as the case may be) and is continuing an Event of
Default (other than a default in the payment of the Purchase Price or Change
in Control Purchase Price, as the case may be, with respect to such Notes).
The Paying Agent will promptly return (or transfer by book-entry) to the
respective Holders thereof any Notes (x) with respect to which a Purchase
Notice or Change in Control Purchase Notice, as the case may be, has been
withdrawn in compliance with this subparagraph, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, with
respect to such Notes) and not subject to purchase pursuant to subparagraph 6.1
through the issuance of Common Stock, including cash in lieu of fractional
shares, in which case, upon such return, the Purchase Notice or Change in
Control Purchase Notice with respect thereto shall be deemed to hav e been
withdrawn.
6.4. Deposit of Purchase Price or Change in Control Purchase Price. Prior
to 1:00 p.m. (local time in The City of New York) on the Business Day following
the Purchase Date or the Change in Control Purchase Date, as the case may be,
the Company sh all deposit with the Trustee or with the Paying Agent (or, if
the Company or a Subsidiary or an Affiliate of either of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 1003 of
the Indenture) an amount of mo ney (in immediately available funds if deposited
on such Business Day) or Common Stock, if permitted hereunder, sufficient to
pay the aggregate Purchase Price or Change in Control Purchase Price, as the
case may be, of all the Notes or portions there of which are to be purchased as
of the Purchase Date or Change in Control Purchase Date, as the case may be.
If cash (and/or Common Stock if permitted hereunder) sufficient to pay the
Purchase Price or the Change in Control Purchase Price, as the case may be, of
all Notes (or portions thereof) to be purchased as of the Purchase Date or the
Change in Control Purchase Date, as the case may be, is deposited with the
Paying Agent in accordance with the immediately preceding paragraph, Original
Issue Discount shall cease to accrue on such Notes (or portions thereof)
immediately after such Purchase Date or C hange in Control Purchase Date, as
the case may be, and the Holder thereof shall have no other rights as such
(other than the right to receive the Purchase Price or Change in Control
Purchase Price, as the case may be, upon surrender of such Note).
6.5. Notes Purchased in Part. Any Note which is to be purchased only in
part shall be surrendered at the office of the Paying Agent (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or such Holder's attorney duly authorized in writing) or
transferred by book-entry and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Note or authorize transfer by
book-entry, without service charge, a new Note or Notes, of any authorized
denomination as requested by such Holder in aggregate Principal Amount at
Maturity equal to, and in exchange for, the portion of the Principal Amount at
Maturity of the Note so surrendered which is not purchased.
6.6. Repayment to the Company. The Trustee and the Paying Agent shall
return to the Company any cash or shares of Common Stock that remain unclaimed
as provided in paragraph 13 hereof, together with interest or dividends, if
any, thereon, held by them for the payment of the Purchase Price or Change in
Control Purchase Price, as the case may be; provided, however, that to the
extent that the aggregate amount of cash or shares of Common Stock deposited
by the Company pursuant to subparagraph 6.4 exceeds the aggregate Purchase
Price or Change in Control Purchase Price, as the case may be, of the Notes or
portions thereof which the Company is obligated to purchase as of the Purchase
Date or Change in Control Purchase Date, as the case may be, then promptly
after the Business Day following the Purchase Date or Change in Control
Purchase Date, as the case may be, the Trustee shall return any such excess to
the Company.
7. Notice of Redemption
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail a notice of redemption by first-class mail, postage prepaid,
to each Holder of Notes to be redeemed. The notice shall identify the Notes to
be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) that Notes called for redemption may be converted at any time before
the close of business on the Redemption Date;
(6) that Holders who want to convert Notes must satisfy the requirements
set forth in paragraph 9 of the Notes;
(7) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
(8) if fewer than all the outstanding Notes are to be redeemed, the
identification (and, in the case of partial redemption, the respective
Principal Amounts at Maturity) of the particular Notes to be redeemed;
(9) that Original Issue Discount on Notes called for redemption will cease
to accrue on and after the Redemption Date, provided that, in the event the
Company defaults in making payment of such Redemption Price on the Redemption
Date, interest sh all accrue on such overdue amount as described in paragraph 1
of this Note; and
(10) the CUSIP number of the Notes.
At the Company's request, the Trustee shall give the notice of redemption in
the Company's name and at the Company's expense, provided that the Company
makes such request at least five Business Days prior to such notice of
redemption. Once notice of redemption is given, Notes called for redemption
become due and payable on the Redemption Date and at the Redemption Price
stated in the notice except for Notes which are converted in accordance with
the terms of this Note and the Indenture. Upon s urrender (or transfer by
book-entry) to the Paying Agent, such Notes shall be paid at the Redemption
Price stated in the notice.
8. Subordination
The Notes (including any and all payments of the Principal Amount at Maturity,
Redemption Price, Purchase Price, Change in Control Purchase Price and
interest, if any, in respect of any Note) are subordinated to all existing and
future Senior Debt. To the extent provided in the Indenture, Senior Debt must
be paid before the Notes may be paid. The Indenture does not limit the present
or future amount of Senior Debt the Company may have, except that not more than
$250,000,000 of Intercompany Deb t may qualify as Senior Debt. The Company
agrees, and each Holder by accepting a Note agrees, to such subordination and
authorizes the Trustee to give it effect and appoints the Trustee as attorney-
in-fact for such purpose.
9. Conversion
9.1. Conversion Privilege. Subject to the next two succeeding sentences, a
Holder of a Note may convert it into Common Stock of the Company at any time
before the close of business on March 3, 2009. If the Note is called for
redemption, the Hold er may convert it at any time before the close of business
on the Redemption Date. A Note in respect of which a Holder has delivered a
Purchase Notice or Change in Control Purchase Notice exercising the option of
such Holder to require the Company t o purchase such Note may be converted only
if such notice of exercise is validly withdrawn in accordance with the terms of
paragraph 6 hereof.
9.2. Conversion Rate. The initial Conversion Rate is 29.499 shares of
Common Stock per $1,000 Principal Amount at Maturity, subject to
adjustment in certain events as described in subparagraph 9.5 below.
9.3. Conversion Procedure. To convert a Note, a Holder must (i) complete
and manually sign the conversion notice below (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent, or,
if applicable, complete and deliver to The Depository Trust Company or any
successor depository (the "Depository") the appropriate instruction form for
conversion pursuant to the Depository's book-entry conversion program, (ii)
surrender the Note to the Conversion Agent by physical or book-entry delivery
(which is not necessary in the case of conversion pursuant to the Depository's
book-entry conversion program), (iii) furnish appropriate endorsements and
transfer documents, if required by the Conversion Agent , the Company or the
Trustee and (iv) pay any transfer or similar tax, if required (the date upon
which each of (i) through (iv) above shall have been satisfied, the "Conversion
Date"). Book-entry delivery of a Note to the Conversion Agent may be ma de by
any financial institution that is a participant in the Depository; conversion
through the Depository's book-entry conversion program is available for any
Note that is held in an account maintained at the Depository by any such
participant.
No later than the seventh Business Day following the Conversion Date, the
Company shall deliver to the Holder, through the Conversion Agent, a
certificate for the number of full shares of Common Stock issuable upon the
conversion and cash in lieu of any fractional share. Delivery of such
certificate and delivery of any check for any cash in lieu of fractional
interests therein may be delayed for a reasonable time at the request of the
Company in order to effectuate the calculation of adjustment s of the
Conversion Rate pursuant to this paragraph 9. If, between any Conversion Date
and the related date of delivery of shares of Common Stock, such shares shall
cease to have any or certain rights, the Holder entitled to receive such shares
shall be entitled only to receive such shares as so modified and any proceeds
received thereon on or after such Conversion Date, and the Company, the Trustee
and the Conversion Agent shall not be otherwise liable with respect to the
modification, from su ch Conversion Date to the date of such delivery, of such
shares of Common Stock.
The Person in whose name the certificate is registered shall be treated as a
stockholder of record on and after the Conversion Date; provided, however, that
no surrender of a Note on any date when the stock transfer books of the Company
shall be clos ed shall be effective to constitute the Person or Persons
entitled to receive the shares of Common Stock upon such conversion as the
record holder or holders of such shares of Common Stock on such date, but such
surrender shall be effective to consti tute the Person or Persons entitled to
receive such shares of Common Stock as the record holder or holders thereof for
all purposes at the close of business on the next succeeding day on which such
stock transfer books are open; provided, further, ho wever, such conversion
shall be at the Conversion Rate in effect on the date that such Note shall have
been surrendered for conversion, as if the stock transfer books of the Company
had not been closed. Upon conversion of a Note, such Person shall n o longer
be a Holder of such Note.
The Company will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Common Stock
upon conversion of Notes, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or in the over-
the-counter market or such other market on which the Common Stock is then
listed or quoted. The Company will promptly inform the Trustee of any such
listing.
A Holder may convert a portion of a Note if the Principal Amount at Maturity of
such portion is $1,000 or an integral multiple of $1,000. No payment or
adjustment will be made for dividends on the Common Stock except as provided in
subparagraph 9.5 below. On conversion of a Note, that portion of accrued
Original Issue Discount attributable to the period from the Issue Date through
the Conversion Date with respect to the converted Note shall not be cancelled,
extinguished or forfeited, but rath er shall be deemed to be paid in full to
the Holder thereof through the delivery of the Common Stock (together with the
cash amount, if any, in lieu of fractional shares) in exchange for the Note
being converted pursuant to the terms hereof; and the fair market value of such
shares of Common Stock (together with any such cash payment in lieu of
fractional shares) shall be treated as issued, to the extent thereof, first in
exchange for Original Issue Discount accrued through the Conversion Date, and
the balance, if any, of such fair market value of such Common Stock (and any
such cash payment) shall be treated as issued in exchange for the Issue price
of the Note being converted pursuant to the provisions hereof. If the Holder
converts more than one Note at the same time, the number of shares of Common
Stock issuable upon the conversion shall be based on the total Principal Amount
at Maturity of the Notes converted. Upon surrender of a Note that is converted
in part, the Company shall execute, and the Trustee shall authenticate and
deliver (or transfer through book-entry) to the Holder, a new Note in an
authorized denomination equal in Principal Amount at Maturity to the
unconverted portion of the Note surrendered. Provisions of the Indenture and
this Note that apply to the conversion of Notes also apply to the conversion of
portions of Notes.
9.4. Fractional Shares. The Company will not issue a fractional share of
Common Stock upon conversion of a Note. Instead, the Company will deliver cash
for the current market value of the fractional share. The current market value
of a fraction al share shall be determined, to the nearest 1/1,000th of a
share, by multiplying the Sale Price, on the last Trading Day prior to the
Conversion Date, of a full share by the fractional amount and rounding the
product to the nearest whole cent.
9.5. Adjustment of Conversion Rate.
9.5.1. Adjustment for Change in Capital Stock. If, after the Issue Date of
the Notes, the Company:
(i) pays a dividend or makes a distribution on its Common Stock in shares
of its Common Stock;
(ii) subdivides its outstanding shares of Common Stock into a greater number
of shares;
(iii) combines its outstanding shares of Common Stock into a smaller number
of shares;
(iv) pays a dividend or makes a distribution on its Common Stock in shares
of its Capital Stock (other than Common Stock or rights, warrants or
options for its Capital Stock); or
(v) issues by reclassification of its Common Stock any shares of its
Capital Stock (other than rights, warrants or options for its Capital
Stock);
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Note thereafter
converted may receive the number of shares or other units of Capital Stock of
the Company which such Holder would have owned immediately following such
action if such Holder had converted the Note immediately prior to such action.
The adjustment shall become effective immediately after the record date in the
case of a dividend or distribution (except that in the event any Notes are
converted between such record date and the payment date, the Company may
withhold distribution of such additional shares of Common Stock or Capital
Stock until the payment date) and immediately after the effec tive date in the
case of a subdivision, combination or reclassification. If after an
adjustment a Holder of a Note upon conversion of such Note may receive shares
of two or more classes of Capital Stock of the Company, the Conversion Rate
shall ther eafter be subject to adjustment upon the occurrence of an action
taken with respect to any such class of Capital Stock as is contemplated by
this paragraph 9 with respect to the Common Stock, on terms comparable to
those applicable to Common Stock in this paragraph 9. This subparagraph 9.5.1
shall not apply if Section 1209 of the Indenture is applicable.
9.5.2. Adjustment for Rights Issue. If after the Issue Date of the Notes, the
Company distributes any rights, warrants or options to all holders of its
Common Stock entitling them, for a period expiring within 60 days after the
record date for such distribution, to purchase shares of Common Stock at a
price per share less than the Sale Price as of the Time of Determination, the
Conversion Rate shall be adjusted in accordance with the formula:
R' = R x (O + N)
(O+(N x P)/M)
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
O = the number of shares of Common Stock outstanding on the record date for
the distribution to which this subparagraph 9.5.2 is being applied.
N = the number of additional shares of Common Stock offered pursuant to the
distribution.
P = the offering price per share of the additional shares.
M = the Average Sale Price, minus, in the case of (i) a distribution to
which subparagraph 9.5.1(iv) applies or (ii) a distribution to which
subparagraph 9.5.3 applies, for which, in each case, (x) the record date shall
occur on or before the rec ord date for the distribution to which this
subparagraph 9.5.2 applies and (y) the Ex-Dividend Time shall occur on or after
the date of the Time of Determination for the distribution to which this
subparagraph 9.5.2 applies, the fair market value (on the record date for the
distribution to which this subparagraph 9.5.2 applies) of the
(1) Capital Stock of the Company distributed in respect of each share of
Common Stock in such subparagraph 9.5.1(iv) distribution, and
(2) assets of the Company or debt securities or any rights, warrants or
options to purchase securities of the Company distributed in respect of
each share of Common Stock in such subparagraph 9.5.3 distribution.
The Board of Directors shall determine fair market values for the purposes of
this subparagraph 9.5.2. The adjustment shall become effective immediately
after the record date for the determination of stockholders entitled to receive
the rights, warrants or options to which this subparagraph 9.5.2 applies. If
all of the shares of Common Stock subject to such rights, warrants or options
have not been issued when such rights, warrants or options expire, then the
Conversion Rate shall promptly be readjusted to the Conversion Rate which would
then be in effect had the adjustment upon the issuance of such rights, warrants
or options been made on the basis of the actual number of shares of Common
Stock issued upon the exercise of such rights, wa rrants or options. No
adjustment shall be made under this subparagraph 9.5.2 if the application of
the formula stated above in this subparagraph 9.5.2 would result in a value of
R' that is equal to or less than the value of R. This subparagraph 9.5 .2
shall not apply if Section 1209 of the Indenture is applicable.
9.5.3. Adjustment for Other Distributions. If, after the Issue Date of the
Notes, the Company distributes to all holders of its Common Stock any of its
assets, or debt securities or any rights, warrants or options to purchase
securities of the Comp any (including securities or cash, but excluding (x)
distributions of Capital Stock referred to in subparagraph 9.5.1 and
distributions of rights, warrants or options referred to in subparagraph 9.5.2,
(y) cash dividends or other cash distributions p aid from consolidated earnings
or consolidated earned surplus of the Company and (z) Excluded Cash Dividends),
then the Conversion Rate shall be adjusted, subject to the provisions of the
last paragraph of this subparagraph 9.5.3. in accordance with the formula:
R' = R x M
M - F
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, minus, in the case of a distribution to which
subparagtraph 9.5.1(iv) applies, for which (i) the record date shall occur on
or before the record date for the distribution to which this subparagraph 9.5.3
applies and (i i) the Ex-Dividend Time shall occur on or after the date of the
Time of Determination for the distribution to which this subparagraph 9.5.3
applies, the fair market value (on the record date for the distribution to
which this subparagraph 9.5.3 applies) of any Capital Stock of the Company
distributed in respect of each share of Common Stock in such subparagraph
9.5.1(iv) distribution.
F = the fair market value (on the record date for the distribution to which
this subparagraph 9.5.3 applies) of the assets, securities, rights, warrants or
options to be distributed in respect of each share of Common Stock in the
distribution to which this subparagraph 9.5.3 is being applied (including, in
the case of cash dividends or other cash distributions giving rise to an
adjustment, all such cash distributed concurrently).
The Board of Directors shall determine fair market values for the purposes of
this subparagraph 9.5.3. The adjustment shall become effective immediately
after the record date for the determination of stockholders entitled to
receive the distribution to which this subparagraph 9.5.3 applies. In the
event that, with respect to any distribution to which this subparagaraph 9.5.3
would otherwise apply, the difference "M" - "F" as defined in the above
formula is less than $1.00 or "F" is equal to or greater than "M", then the
adjustment provided by this subparagraph 9.5.3 shall not be made and in lieu
thereof the provisions of subparagraph 9.5.8 shall apply to such distribution.
9.5.4. When Adjustment May Be Deferred. No adjustment in the Conversion Rate
need be made unless the adjustment would require an increase or decrease of at
least 1% (e.g., if the Conversion Rate is 29.499, an increase or decrease of
.29499 (1% of 2 9.499)) in the Conversion Rate. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this paragraph 9 shall be made to the
nearest cent or to the nearest 1/1,000th of a share, as the case may be with
one-half of a cent and 5/10,000ths of a share being rounded upwards.
9.5.5. When No Adjustment Required. No adjustment need be made for a
transaction referred to in subparagraph 9.5.1, 9.5.2, 9.5.3 or 9.5.8 if Holders
are to participate in the transaction on a basis and with notice that the Board
of Directors determ ines to be fair and appropriate in light of the basis and
notice on which holders of Common Stock participate in the transaction. Such
participation by Holders may include participation upon conversion provided
that an adjustment shall be made at such time as the Holders are no longer
entitled to participate. No adjustment need be made for rights to purchase
Common Stock pursuant to a Company plan for reinvestment of dividends or
interest. No adjustment need be made for a change in the par value or no par
value of the Common Stock. To the extent the Notes become convertible pursuant
to this paragraph 9 into cash, no adjustment need be made thereafter as to the
cash. Interest will not accrue on the cash.
9.5.6. Notice of Adjustment. Whenever the Conversion Rate is adjusted, the
Company shall promptly, but in any event no later than seven Business Days
after such adjustment, file with the Trustee and the Conversion Agent a notice
of such adjustment and a certificate from the Company's independent public
accountants briefly stating the facts requiring the adjustment and the manner
of computing it. The Conversion Agent will promptly, but in any event no later
than seven Business Days after recei pt thereof, mail such notice to Holders at
the Company's expense. The certificate shall be conclusive evidence that the
adjustment is correct. Neither the Trustee nor any Conversion Agent shall be
under any duty or responsibility with respect to any such certificate except to
exhibit the same to any Holder desiring inspection thereof.
9.5.7. Voluntary Increase. The Company from time to time may increase the
Conversion Rate by any amount for any period of time (provided, that such
period is not less than 20 Business Days). Whenever the Conversion Rate is
increased, the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice of the increase. The Company (or the Trustee at the
Company's request (upon at least five Business Days' notice) and expense) shall
mail the notice at least 15 days bef ore the date the increased Conversion Rate
takes effect. The notice shall state the increased Conversion Rate and the
period it will be in effect. A voluntary increase of the Conversion Rate does
not change or adjust the Conversion Rate otherwise in effect for purposes of
subparagraphs 9.5.1, 9.5.2 or 9.5.3.
9.5.8. Special Distributions. If the Company makes a distribution to all
holders of its Common Stock of any of its assets, or debt securities or any
rights, warrants or options to purchase securities of the Company that, but for
the provisions of t he last paragraph of subparagraph 9.5.3, would otherwise
result in an adjustment in the Conversion Rate pursuant to the provisions of
subparagraph 9.5.3, then, from and after the record date for determining the
holders of Common Stock entitled to rec eive the distribution, a Holder of a
Note that converts such Note in accordance with the provisions of this Note and
the Indenture shall upon such conversion be entitled to receive, in addition to
the shares of Common Stock into which the Note is con vertible, the kind and
amount of securities, cash or other assets comprising the distribution that
such Holder would have received if such Holder had converted the Note
immediately prior to the record date for determining the holders of Common
Stock entitled to receive the distribution.
9.5.9. Company Determination Final. Any determination that the Company or the
Board of Directors must make pursuant to subparagraph 9.4, 9.5.1,
9.5.2, 9.5.3, 9.5.4, 9.5.5, 9.5.8 or 9.5.11 is conclusive.
9.5.10. Trustee's Adjustment Disclaimer. The Trustee has no duty to determine
when an adjustment under this paragraph 9 should be made, how it should be
made or what it should be. The Trustee shall not be accountable for and makes
no representation as to the validity or value of any securities or assets
issued upon conversion of Notes. The Trustee shall not be responsible for the
Company's failure to comply with this paragraph 9. Each Conversion Agent shall
have the same protection under this subparagraph as the Trustee.
9.5.11. Simultaneous Adjustments. In the event that this paragraph 9 requires
adjustments to the Conversion Rate under more than one of subparagraphs
9.5.1(4), 9.5.2 or 9.5.3, and the record dates for the distributions giving
rise to such adjustment s shall occur on the same date, then such adjustments
shall be made by applying, first, the provisions of subparagraph 9.5.1, second,
the provisions of subparagraph 9.5.3 and, third, the provisions of subparagraph
9.5.2.
9.5.12. Successive Adjustments. Except as set forth in subparagraph 9.5.7,
after an adjustment to the Conversion Rate under this paragraph 9, any
subsequent event requiring an adjustment under this paragraph 9, shall cause an
adjustment to the Conversion Rate as so adjusted.
9.5.13. Cancellation of Note. Upon receipt by the Trustee of Notes delivered
to the Conversion Agent for conversion under this paragraph 9, the
Trustee shall cancel and dispose of the same as provided in Section 309
of the Indenture.
9.6 Consolidation, Merger, Etc. If the Company is a party to a
consolidation, merger or statutory share exchange or a transfer of all or
substantially all of its assets, the right to convert a Note into Common Stock
may be changed into a right to convert it into securities, cash or other assets
of the Company or another Person as provided in the Indenture.
10. Conversion Arrangement on Call for Redemption.
In connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes called for redemption by an agreement with
one or more investment bankers or other purchasers to purchase such Notes by
paying to the Trustee in trust for the Holders, on or before the close of
business on the Redemption Date, an amount that, together with any amounts
deposited with the Trustee by the Company for the redemption of such Notes, is
not less than the Redemption Price, tog ether with interest, if any, accrued to
the Redemption Date, of such Notes. Notwithstanding anything to the contrary
contained in this Note, the obligation of the Company to pay the Redemption
Price of such Notes, including all accrued interest, if any, shall be deemed to
be satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, any Notes not duly
surrendered for conversion by the Holders thereof may, at the option of the
Company , be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in paragraph 9) surrendered by such purchasers for conversion, all as
of immediately prior to t he close of business on the Redemption Date, subject
to payment of the above amount as aforesaid. The Trustee shall hold and pay to
the Holders whose Notes are selected for redemption any such amount paid to it
for purchase and conversion in the same manner as it would moneys deposited
with it by the Company for the redemption of Notes. Without the Trustee's
prior written consent, no arrangement between the Company and such purchasers
for the purchase and conversion of any Notes shall increase or otherwise affect
any of the powers, duties, responsibilities or obligations of the Trustee as
set forth in this Note and the Indenture, and the Company agrees to indemnify
the Trustee from, and hold it harmless against, any loss, damage, claim, l
iability, cost or expense (including attorneys' fees) incurred without
negligence or bad faith on its part, arising out of or in connection with any
such arrangement for the purchase and conversion of any Notes between the
Company and such purchasers , including the costs and expenses incurred by the
Trustee in the defense of any claim or liability arising out of or in
connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Note and the Indenture.
11. Denominations, Transfer, Exchange
The Notes are in fully registered form, without coupons, in denominations of
$1,000 of Principal Amount at Maturity and integral multiples of $1,000. A
Holder may transfer or exchange Notes for one or more new Notes of any
authorized denomination or denominations, of a like aggregate Principal Amount
at Maturity, in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Notes selected for
redemption (except, in the case of a Note to be redeemed in part, the portion
of the Note not to be redeemed) or any Notes in respect of wh ich a Purchase
Notice or Change in Control Purchase Notice has been given and not withdrawn
(except, in the case of a Note to be purchased in part, the portion of the
Note not to be purchased) for a period of 15 days before a selection of Notes
to be redeemed.
12. Persons Deemed Owners
The registered Holder of this Note may be treated as the owner of this Note for
all purposes.
13. Unclaimed Money or Notes
The Trustee and Paying Agent shall return to the Company upon written request
any money or securities held by them for the payment of any amount with respect
to the Notes that remains unclaimed for two years; provided, however, that the
Trustee or su ch Paying Agent, before being required to make any such return,
may at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
the money or securities noti ce that such money or securities remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication or mailing, any unclaimed money or securities
then remaining will be returned to the C ompany. After return to the Company,
Holders entitled to the money or securities must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another Person.
14. Amendment
The Company and the Trustee may amend the Indenture or the Notes without the
consent of any Holder to, among other things, provide for uncertificated Notes
in addition to certificated Notes so long as such uncertificated Notes are in
registered form for purposes of the Internal Revenue Code of 1986, as amended.
With the written consent of the Holders of at least a majority in aggregate
Principal Amount at Maturity of the Notes at the time outstanding, the Company
and the Trustee may amend the I ndenture or the Notes. However, without the
consent of each Holder affected, an amendment to the Indenture or the Notes may
not, among other things: (i) make any change to the Principal Amount at
Maturity of Notes whose Holders must consent to an am endment; (ii) make any
change in the manner or rate of accrual in connection with Original Issue
Discount, reduce the rate of interest referred to in paragraph 1 of this Note
or extend the time for payment of Original Issue Discount or interest, if a ny,
on any Note; (iii) reduce the Principal Amount at Maturity or the Issue Price
of or extend the Stated Maturity of any Note; (iv) reduce the Redemption Price,
Purchase Price or Change in Control Purchase Price of any Note; (v) make any
Note payabl e in money or securities other than that stated in the Note; (vi)
make any change that adversely affects the right to convert any Note; or (vii)
make any change that adversely affects the right to require the Company to
purchase the Notes in accordan ce with the terms hereof and the Indenture.
15. Defaults and Remedies
Events of Default are (i) default in payment of the Principal Amount at
Maturity, Issue Price plus accrued Original Issue Discount, Redemption Price,
Purchase Price or Change in Control Purchase Price, as the case may be, in
respect of the Notes when the same becomes due and payable at its Stated
Maturity, upon redemption, upon declaration, when due for purchase by the
Company or otherwise, whether or not such payment shall be prohibited by
Article 15 of the Indenture; (ii) failure by the Compan y to deliver shares of
Common Stock when such Common Stock is required to be delivered following
conversion of a Note; (iii) failure by the Company to comply with other
agreements in the Indenture or the Notes, subject to notice and lapse of time;
(i v) default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any Principal Insurance
Subsidiary having an aggregate outstanding principal amount of in excess of
$25,000,000, which default shall hav e resulted in such indebtedness becoming
or being declared due and payable prior to the date on which it would
otherwise have become due and payable without such indebtedness being
discharged or such acceleration having been rescinded or annulled, in each
case within a period of 30 days after the receipt of notice thereof by the
Company from the Trustee or by the Company and the Trustee from Holders of not
less than 25% in aggregate Principal Amount at Maturity of the Notes at the
time outstandi ng; and (v) events of bankruptcy or insolvency as set forth in
the Indenture. If an Event of Default occurs and is continuing, the Trustee,
or the Holders of at least 25% in aggregate Principal Amount at Maturity of
the Notes at the time outstanding , may declare all the Notes to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Notes becoming due and payable immediately
upon the occurrence of such Events of Default. Subject to Articles 5 and 6 of
the Indenture, the Trustee may refuse to enforce the Indenture or the Notes
unless it receives reasonable indemnity or security. Holders of a majority in
aggregate Principal Amount at Maturity of the Notes at the time outstanding
may direct the Trustee in its exercise of any trust or power; provided,
however, that the right of any Holder (x) to receive payment of the Principal
Amount at Maturity, Issue Price plus accrued Original Issue Discount,
Redemption Price, Purchase Price or Change in Control Purchase Price with
respect to any Note and any interest in respect of a default in the payment of
any such amounts on such Note, on or after the due date therefor, (y) to
convert Notes or (z) to institute suit for the enforcement of any such
payments or conversion shall not be impaired or adversely affected without
such Holder's consent; provided, further, that the Holders of at least a
majority in aggregate Principal Amount at Maturity of the outstanding Not es
may waive an existing default and its consequences, other than (i) any default
by the Company in any payment on the Notes, (ii) any default by the Company in
delivering shares of Common Stock when such Common Stock is required to be
delivered, (ii i) any default which constitutes a failure to convert any Note
in accordance with its terms or (iv) any default in respect of covenants or
provisions in the Indenture and this Note which may not be modified without
the consent of the Holder of each Note.
16. Definitions
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Associate" shall have the meaning ascribed to such term in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on the date
hereof.
"Average Sale Price" means the average of the Sale Prices of the Common Stock
for the shortest of (i) 30 consecutive Trading Days ending on the last Trading
Day prior to the Time of Determination with respect to the rights, warrants or
options or dis tribution in respect of which the Average Sale Price is being
calculated; (ii) the period (x) commencing on the date next succeeding the
first public announcement of (a) the issuance of rights, warrants or options or
(b) the distribution, in each cas e, in respect of which the Average Sale Price
is being calculated and (y) proceeding through the last Trading Day prior to
the Time of Determination with respect to the rights, warrants or options or
distribution in respect of which the Average Sale Price is being calculated; or
(iii) the period, if any, (x) commencing on the date next succeeding the Ex-
Dividend Time with respect to the next preceding (a) issuance of rights,
warrants or options or (b) distribution, in each case, for which an adj ustment
is required by the provisions of subparagraph 9.5.1(iv), 9.5.2 or 9.5.3 and (y)
proceeding through the last Trading Day prior to the Time of Determination with
respect to the rights, warrants or options or distribution in respect of which
the Average Sale Price is being calculated.
In the event that the Ex-Dividend Time (as defined in the definition of "Time
of Determination") (or in the case of a subdivision, combination or
reclassification, the effective date with respect thereto) with respect to a
dividend, subdivision, comb ination or reclassification to which subparagraph
9.5.1(i), (ii), (iii) or (iv) applies occurs during the period applicable for
calculating "Average Sale Price" pursuant to the definition in the preceding
sentence, "Average Sale Price" shall be calcu lated for such period in a manner
determined by the Board of Directors to reflect the impact of such dividend,
subdivision, combination or reclassification on the Sale Price of the Common
Stock during such period.
"Capital Stock" for any corporation means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation.
"Excluded Cash Dividends" mean dividends at the quarterly rate of $.10 per
share (appropriately adjusted after the date of this Note for any transactions
described in subparagraphs 9.5.1(i), (ii) and (iii)) or increases therein
payable out of cumulat ive consolidated net income of the Company for the
period from January 1, 1994 through the date of the most recent consolidated
quarterly financial statements of the Company as at the time of the declaration
of the dividend.
"Ex-Dividend Time" is defined within the definition of "Time of Determination."
"Issue Date" of any Note means the date on which the Note was originally issued
or deemed issued as set forth on the face of the Note.
"Issue Price" of any Note means, in connection with the original issuance of
such Note, the initial issue price at which the Note is sold as set forth on
the face of the Note.
"Market Price" means the average of the Sale Prices of the Common Stock for the
five Trading Day period ending on the third Business Day (if the third Business
Day prior to the applicable Purchase Date is a Trading Day, or, if not, then on
the last T rading Day prior to such Business Day) prior to the applicable
Purchase Date, appropriately adjusted to take into account the occurrence,
during the period commencing on the first of such five Trading Day period and
ending on such Purchase Date, of a ny event described in subparagraphs 9.5.1,
9.5.2 or 9.5.3; subject, however, to the conditions set forth in subparagraphs
9.5.4 and 9.5.5.
"Notes" means any of the Company's Zero Coupon Convertible Subordinated Notes
due 2009, as amended or supplemented from time to time, issued under the
Indenture.
"Original Issue Discount" of any Note means the difference between the Issue
Price and the Principal Amount at Maturity of the Note as set forth on the face
of the Note.
"Principal Amount at Maturity" of a Note means the Principal Amount at Maturity
as set forth on the face of the Note.
"Redemption Date" or "redemption date" shall mean the date specified for
redemption of the Notes in accordance with the terms of the Notes and the
Indenture.
"Redemption Price" or "redemption price" shall have the meaning set forth in
paragraph 5 hereof.
"Sale Price" of the Common Stock on any date means the closing per share sale
price for the Common Stock (or, if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and average ask prices) on the NYSE Composite Tape
or, in the event the Common Stock is not listed on the NYSE, such other
national or regional securities exchange upon which the Common Stock is listed,
as reported in the composite transactions f or the principal United States
securities exchange on which the Common Stock is traded or, if the Common Stock
is not listed on a United States national or regional securities exchange, as
reported by NASDAQ, or, if the Common Stock is not reported by NASDAQ, the high
per share bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or, if such
bid price is not available, the per share market value of the Common Stock on
such date shall be determined by the Company on such basis as it deems
appropriate.
"Stated Maturity" when used with respect to any Note, means the date specified
in such Note as the fixed date on which an amount equal to the Principal Amount
at Maturity of such Note is due and payable.
"Time of Determination" means the time and date of the earlier of (i) the
determination of stockholders entitled to receive rights, warrants or options
or a distribution, in each case, to which subparagraph 9.5.2 or 9.5.3 applies
and (ii) the time (" Ex-Dividend Time") immediately prior to the commencement
of "ex-dividend" trading for such rights, warrants or options or distribution
on the New York Stock Exchange or such other national or regional exchange or
market on which the Common Stock is t hen listed or quoted.
"Trading Day" means a day during which trading in securities generally occurs
on the New York Stock Exchange or, if the Common Stock is not listed on the New
York Stock Exchange, on the principal other national or regional securities
exchange on whic h the Common Stock is then listed or, if the Common Stock is
not listed on a national or regional securities exchange, on the National
Association of Securities Dealers Automated Quotation System or, if the Common
Stock is not quoted on the National Association of Securities Dealers Automated
Quotation System, on the principal other market on which the Common Stock is
then traded.
17. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to
it by the Company or its Affiliates and may otherwise deal with the Company or
its Affiliates with the same rights it would have if it were not Trustee.
18. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note each Holder waives and
releases all such liability. This waiver and release are part of the
consideration for the issue of the Notes.
19. Authentication
This Note shall not be valid until an authorized officer of the Trustee
manually signs the Trustee's Certificate of Authentication on the other side of
this Note.
20. Abbreviations
Customary abbreviations may be used in the name of a Holder or an assignee,
such as TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= custodian) and U/G/M/A (= Uniform Gift to Minors Act).
21. Ownership
Subject to the provisions of the Indenture, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name this
Note is registered as the owner hereof for all purposes, whether or not this
Note is overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
22. Governing Law
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS NOTE.
23. Paragraph Headings
Paragraph headings used herein are for convenience only and shall not affect
the construction of this Note.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
____________________________________________
(Insert assignee's soc. or tax ID no.)
____________________________________________
____________________________________________
(Print or type assignee's
name, address and zip code)
and irrevocably appoint
______________________________________ agent to transfer this Note on the books
of the Company. The agent may substitute another to act for him.
CONVERSION NOTICE
To convert this Note into Common Stock of the Company, check the box:
/__/
To convert only part of this Note, state the Principal Amount at Maturity to be
converted (which must be in $1,000 or an integral multiple of $1,000):
$________
If you want the stock certificate made out in another person's name, fill in
the form below:
__________________________________
(Insert other person's soc. sec. or tax ID no.)
__________________________________
__________________________________
__________________________________
(Print or type other person's
name, address and zip code)
____________________________________________
Date:
________________________________________
Your Signature:________________________________
____________________________________________
(Sign exactly as your name appears on the other side of this Note)
SIGNATURE GUARANTEE
Signature Guaranteed by:
____________________________________________
By:_________________________________________
____________________________________________
The signature must be guaranteed by a bank, a trust company or a member of the
New York Stock Exchange.
