As Filed with the Securities and Exchange Commission on July 1, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HASBRO, INC.
(Exact name of registrant as specified in its charter)
RHODE ISLAND 3944 05-0155090
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
1027 NEWPORT AVENUE
PAWTUCKET, RHODE ISLAND 02861
(401) 431-8697
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
PHILLIP H. WALDOKS, ESQ.
SENIOR VICE PRESIDENT -
CORPORATE LEGAL AFFAIRS AND SECRETARY
HASBRO, INC.
32 WEST 23RD STREET
NEW YORK, NEW YORK 10010
(212) 645-2400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
VINCENT J. PISANO, ESQ.
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NY 10022
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Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this registration
statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box.|_|
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box.|X|
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering.|_|
If this Form is a post-effective amendment filed pursuant to
Rule 462 (c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.|_|
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the
following box.|_|
__________________________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Title of Each Class Proposed Maximum Proposed Maximum Amount of
of Securities to be Amount to Offering Price Aggregate Registration
Registered be Registered Per Unit(1) Offering Price(1) Fee
------------------- ------------- ---------------- ----------------- ------------
<S> <C> <C> <C> <C>
Debt Securities............. $350,000,000(2) 100% $350,000,000 $97,300(3)
Common Stock, par value
$.50 per share
(including preference
stock purchase
rights)(4)................ -- -- -- --(5)
Common Stock, par value
$.50 per share
(including preference 15,750,000(6) $27.40625(7) $431,648,437.50(7) $119,998.27(7)
stock purchase rights)....
Total....................... -- -- $781,648,437.50 $217,298.27
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</TABLE>
(1) Estimated solely for the purpose of determining the registration fee.
(2) If any debt securities are issued at an original issue discount,
this registration statement shall cover
such greater amount of debt securities as shall result in the
initial offering prices of all debt securities registered
hereunder to aggregate $350,000,000.
(3) Pursuant to Rule 429, this Registration Statement also relates to
an aggregate of $150,000,000 principal amount of securities
included in Registration Statement No. 333-44101 as to which a
filing fee of $44,250 previously has been paid.
(4) Also registered are such indeterminate number of shares of Common
Stock (including preference stock purchase rights) as may be
issued from time to time upon conversion of debt securities
registered hereby.
(5) Pursuant to Rule 457(i) under the Securities Act, there is no filing
fee with respect to the shares of Common Stock issuable upon
conversion of the debt securities, because no additional consideration
will be received in connection with the exercise of the conversion
privilege.
(6) Represents shares issuable upon exercise of warrants.
(7) Pursuant to Rule 457(c), these figures are based upon the average
of the high and low prices per share of Hasbro's Common Stock on
June 28, 1999, as reported on the New York Stock Exchange.
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
STATEMENT PURSUANT TO RULE 429
Pursuant to Rule 429 under the Securities Act of 1933 the
prospectus included herein also relates to $150,000,000 principal amount of
debt securities previously registered under Registration Statement No.
333-44101 and not issued. In the event any such previously registered debt
securities are offered prior to the effective date of this Registration
Statement, they will not be included in the prospectus contained in this
Registration Statement.
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[FLAG]
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 1, 1999
PROSPECTUS
HASBRO, INC.
Common Stock and Debt Securities
With this prospectus, Hasbro may:
o sell senior or subordinated debt securities to the public; and
o issue and sell up to 15,750,000 shares of its common stock upon
the exercise of warrants held by selling shareholders, which
shares may be resold by selling shareholders using this
prospectus. Hasbro will not receive any proceeds from the sale of
the common stock by the selling shareholders.
Hasbro's common stock is listed on the New York Stock Exchange
under the symbol HAS. On June 30, 1999, the reported last sale price of
Hasbro's common stock on the New York Stock Exchange was $27.9375 per
share.
-------------------------
References in this prospectus to "Hasbro," "we," "us," or "our"
mean Hasbro, Inc., a Rhode Island corporation organized on January 8, 1926,
and its subsidiaries.
We urge you to carefully read this prospectus and, with respect to
offerings of debt securities, the accompanying prospectus supplement, which
will describe the specific terms of our senior or subordinated debt
securities, before you make your investment decision.
-------------------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus or any accompanying prospectus supplement is
truthful or complete. Any representation to the contrary is a criminal
offense.
-------------------------
The date of this prospectus is , 1999.
TABLE OF CONTENTS
PAGE
Where You Can Find More Information...................................3
Incorporation of Information We File with the SEC.....................3
About this Prospectus.................................................4
Note Regarding Forward-Looking Statements.............................4
Hasbro................................................................5
Ratio of Earnings to Fixed Charges....................................5
The Selling Shareholders..............................................6
Use of Proceeds.......................................................6
Description of Securities.............................................7
Description of Debt Securities........................................7
Description of Common Stock..........................................19
Certain Anti-Takeover Provisions.....................................21
Plan of Distribution.................................................25
Legal Matters........................................................28
Experts..............................................................29
----------------------
This prospectus and any accompanying prospectus supplement contain
information you should consider when making your investment decision. You
should rely only on the information contained or incorporated by reference
in this prospectus and any accompanying prospectus supplement. We have not
authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information you should
not rely on it. We are not, and neither the selling shareholders nor any
underwriter are, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume
that the information appearing in this prospectus and the information we
filed with the Securities and Exchange Commission and incorporated by
reference, is accurate as of the date on the front cover of this prospectus
only. Our business, financial condition, results of operations and
prospects may have changed since that date.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC.
These reports, proxy statements and other information can be read and
copied at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as the following regional offices: Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60661; and 7 World Trade
Center, Suite 1300, New York, New York 10048. Please call the SEC at
1-800-SEC-0330 for further information on the Public Reference Room. The
SEC maintains an Internet site at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding companies
that file electronically with the SEC, including Hasbro. In addition, our
common stock is listed on the New York Stock Exchange. These reports, proxy
statements and other information can also be read at the offices of the
NYSE, 20 Broad Street, New York, New York 10005.
This prospectus is part of a registration statement filed with the
SEC by Hasbro. The full registration statement can be obtained from the SEC
as indicated above, or from Hasbro.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" the information we
file with the SEC. This permits us to disclose important information to you
by referencing these filed documents. Any information referenced this way
is considered part of this prospectus, and any information filed with the
SEC subsequent to this prospectus will automatically be deemed to update
and supersede this information. We incorporate by reference the following
documents which we have filed with the SEC:
o our Annual Report on Form 10-K for the fiscal year ended
December 27, 1998;
o our Quarterly Report on Form 10-Q for the quarter ended
March 28, 1999; and
o our Current Reports on Form 8-K dated April 15, 1999 and
June 16, 1999.
We also incorporate by reference the documents listed above and any
future filings made with the SEC in accordance with Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") until we file a post-effective amendment which indicates
the termination of the offering of the securities made by this prospectus.
Hasbro will provide without charge upon written or oral request, a
copy of any or all of the documents which are incorporated by reference in
this prospectus, other than exhibits which are specifically incorporated by
reference into those documents. Requests for these copies should be
directed to: Hasbro, Inc., 1027 Newport Avenue, Pawtucket, Rhode Island,
02861, Attention: Cynthia S. Reed, or by telephone to Cynthia S. Reed at
401-431-8697.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed
with the SEC using a "shelf" registration process. This prospectus provides
you with a general description of the securities we may offer. Each time we
sell debt securities, we will provide a prospectus supplement that will
contain specific information about the terms of the offering. The
prospectus supplement may also add, update or change information contained
in this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described above under the
heading "Where You Can Find More Information."
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated in this prospectus by
reference may contain "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities
Act"), and Section 21E of the Exchange Act. These statements may be
identified by the use of forward-looking words or phrases such as
"anticipate," "believe," "expect," "intend," "may," "planned," "potential,"
and "should." These forward-looking statements reflect our current
expectations and are based upon currently available data. The Private
Securities Litigation Reform Act of 1995 provides a "safe harbor" for such
forward-looking statements. In order to comply with the terms of the safe
harbor, we note that a variety of factors could cause actual results and
experience to differ materially from the anticipated results or other
expectations expressed in the forward-looking statements. These factors
include, but are not limited to:
o our ability to manufacture and ship new and continuing products in a
timely manner and customers' and consumers' acceptance of those
products in a competitive product environment;
o economic conditions and currency fluctuations in the various markets
in which we operate throughout the world;
o the inventory policies of retailers, including the continuing trend
of increased concentration of our revenues in the second half and
fourth quarter of the year, together with retailers' increased
reliance on quick response inventory management techniques, which
increases the risk of us underproducing popular items, overproducing
less popular items and failing to achieve tight and compressed
shipping schedules;
o the impact of competition on revenues, margins and other aspects of
our business;
o our incurring higher than expected costs to achieve, or not
achieving, "year 2000" readiness with respect to our information
systems, or our vendors and service suppliers failing to achieve such
readiness; and
o the risk that anticipated benefits of acquisitions or our Global
Integration and Profit Enhancement Program may not occur or be
delayed or reduced in their realization.
These or other events or circumstances could cause our actual
performance or financial results in future periods to differ materially
from those expressed in the forward-looking statements. We undertake no
obligation to make any revisions to the forward-looking statements
contained in this prospectus or the documents incorporated by reference in
this prospectus, or to update the forward-looking statements to reflect
events or circumstances occurring after the date of this prospectus.
HASBRO
We are a worldwide leader in the design, manufacture and marketing of
toys, games, interactive software, puzzles and infant products. Our
offerings include games, including traditional board and card, hand-held
electronic and interactive CD-ROM, and puzzles, preschool, boys' action and
girls' toys, dolls, plush products and infant products. We also license
various trademarks, characters and other property rights for use in
connection with the sale by others of noncompeting toys and non-toy
products. Both internationally and in the U.S., our PLAYSKOOL, KENNER,
TONKA, ODDZON, SUPER SOAKER, MILTON BRADLEY, PARKER BROTHERS, TIGER, HASBRO
INTERACTIVE and GALOOB products provide children and families with what we
believe to be the highest quality and most recognizable toys and games in
the world.
Hasbro was incorporated in Rhode Island on January 8, 1926. Hasbro's
principal office is at 1027 Newport Avenue, Pawtucket, Rhode Island 02861,
and its telephone number is (401) 431-8697.
RATIO OF EARNINGS TO FIXED CHARGES
The table below sets forth the ratio of earnings to fixed charges of
Hasbro and its consolidated subsidiaries for each of the periods indicated.
<TABLE>
<CAPTION>
FISCAL QUARTERS
ENDED IN MARCH(1) Fiscal Year(2)
1999 1998 1998 1997 1996 1995 1994
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<S> <C> <C> <C> <C> <C> <C>
2.24 3.05 6.70 5.66 7.51 5.82 7.58
</TABLE>
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(1) Fiscal Quarters ended on March 28, 1999 and March 29, 1998.
(2) Fiscal years 1998, 1997, 1996, 1995 and 1994 ended on December 27,
1998, December 28, 1997, December 29, 1996, December 31, 1995 and
December 25, 1994, respectively.
For purposes of computing the ratios of earnings to fixed charges:
fixed charges include interest, amortization of debt expense and one-third
of rentals; and earnings available for fixed charges represent earnings
before fixed charges and income taxes.
THE SELLING SHAREHOLDERS
All of the shares of common stock are being issued to and sold by the
selling shareholders of Hasbro identified in the following table. The table
and the following paragraph also set forth information regarding the
beneficial ownership of our outstanding common stock as of June 30, 1999
for each of the selling shareholders. The address for each of Lucasfilm
Ltd., Lucas Licensing Ltd. and George W. Lucas, Jr. is 5858 Lucas Valley
Road, Nicasio, California 94946.
Number of Shares Covered
Selling Shareholder by this Prospectus
------------------- ------------------------
Lucas Licensing Ltd....................... 9,450,000
Lucasfilm Ltd............................. 6,300,000
As of the close of business on June 30, 1999, Lucas Licensing Ltd.
did not hold any shares directly but owned warrants to purchase an
aggregate of 9,450,000 shares. As of the close of business on June 30,
1999, Lucasfilm Ltd. did not hold any shares directly but owned warrants to
purchase an aggregate of 6,300,000 shares. All of the warrants held by
Lucasfilm Ltd. and Lucas Licensing Ltd. became exercisable upon the release
of the film, "Star Wars: Episode 1: The Phantom Menace" on May 19, 1999.
Lucasfilm Ltd. is the sole shareholder of Lucas Licensing Ltd. and as such
may be deemed to beneficially own the shares held by Lucas Licensing Ltd.
As the sole director of both Lucasfilm Ltd. and Lucas Licensing Ltd. and as
the controlling person of Lucasfilm Ltd., George W. Lucas, Jr. may be
deemed to beneficially own the shares held by both Lucasfilm Ltd. and Lucas
Licensing Ltd.
USE OF PROCEEDS
We will receive none of the proceeds of securities sold by selling
shareholders. We intend to use the net proceeds of any debt securities sold
by us for working capital, to repurchase outstanding shares of our common
stock and for acquisitions. Any specific allocation of the net proceeds of
an offering of debt securities to a specific purpose will be described in
the applicable prospectus supplement.
DESCRIPTION OF SECURITIES
This prospectus contains a summary of the debt securities and common
stock that Hasbro or selling shareholders may sell. These summaries are not
meant to be a complete description of each security. However, this
prospectus and any accompanying prospectus supplement contain the material
terms of the securities being offered.
DESCRIPTION OF DEBT SECURITIES
The debt securities will be our direct general unsecured obligations.
The debt securities will be either senior debt securities or subordinated
debt securities. Both senior debt securities and subordinated debt
securities may be issued as convertible debt securities which, unless
previously redeemed or otherwise purchased, will be convertible into shares
of Hasbro's common stock. The debt securities will be issued under one or
more separate indentures between us and a banking institution as trustee.
Senior debt securities will be issued under a senior indenture and
subordinated debt securities will be issued under a subordinated indenture.
Together the senior indenture and the subordinated indenture are called
indentures.
We have summarized all material provisions of the indentures below.
The forms of the indentures have been filed as exhibits to the registration
statement and you should read the indentures for provisions that may be
important to you. In parts of the summary below, we have included
references to section numbers of the indentures so that you can easily
locate these provisions. The Indentures are substantially identical, except
for certain covenants of Hasbro applicable to the senior indenture and
provisions relating to subordination. See "Provisions Applicable Solely to
Senior Debt Securities" and "Provisions Applicable Solely to Subordinated
Debt Securities."
GENERAL
The debt securities will be our direct unsecured obligations. Because
significant operations of Hasbro are currently conducted through
subsidiaries, the cash flows of Hasbro depend in part upon the cash flows
of these subsidiaries and the availability of those cash flows to Hasbro.
In addition, the payment of dividends, distributions and certain loans and
advances to Hasbro by its subsidiaries may be subject to statutory or
contractual restrictions, depend upon the earnings of the subsidiaries and
are subject to various business considerations. Any right of Hasbro to
receive the assets of any of its subsidiaries upon their liquidation,
reorganization or recapitalization, and the consequent right of the holders
of the debt securities to participate in those assets, will be subordinated
to the claims of the creditors and any preferred shareholders of the
respective subsidiaries, which creditors would include trade creditors and
in the future may include lenders of additional debt for borrowed money.
Even if Hasbro is itself recognized as a creditor of such subsidiary, the
claims of Hasbro would still be subordinated to any security interests in
the assets of such subsidiary and any indebtedness of such subsidiary
senior to that held by Hasbro.
A prospectus supplement relating to any series of debt securities
being offered will include specific terms relating to the offering. The
terms will be established in an officer's certificate or a supplemental
indenture. The officer's certificate or supplemental indenture will be
signed at the time of issuance and will contain important information. The
officers' certificate or supplemental indenture will be filed as an exhibit
to a Current Report on Form 8-K of Hasbro. The Current Report on Form 8-K
will be publicly available. The officers' certificate or supplemental
indenture will include some or all of the following for a particular series
of debt securities:
o the title of the securities;
o any limit on the amount(s) that may be issued;
o the maturity date(s) or the method by which such date(s) will be
determined;
o the interest rate or the method of computing the interest rate;
o the date or dates from which interest will accrue, or how such
date or dates will be determined, and the interest payment date
or dates and any related record dates;
o any mandatory or optional sinking fund or similar provisions;
o the terms and conditions on which we may redeem the debt
securities;
o the date(s), if any, on which, and the price(s) at which Hasbro
is obligated to redeem such series of debt securities and other
related terms and provisions;
o the place(s) where payments, if any, will be made on the debt
securities and the place(s) where debt securities may be
presented for transfer and, if applicable, conversion;
o whether the debt securities are issuable as registered
securities, bearer securities or both, and the terms upon which
bearer securities may be exchanged for registered securities;
o special provisions relating to the issuance of any bearer
securities of any series;
o the currency or currency units in which payments may be payable;
o any changes to or additional events of default or covenants;
o the form of debt securities and coupons, if any; and
o any other terms of the debt securities. (Section 3.01 of the
indentures)
Unless otherwise indicated in a prospectus supplement relating to any
debt securities, the covenants contained in the indentures or the debt
securities would not afford holders of the debt securities protection in
the event of a highly leveraged or other transaction involving Hasbro or
its subsidiaries that may adversely affect the holders of the debt
securities.
Debt securities may be issued under the indentures as original issue
discount securities. An original issue discount security is a security,
including any zero-coupon security, which:
o is issued at a price lower than the amount payable upon its
stated maturity and
o provides that upon redemption or acceleration of the maturity,
an amount less than the amount payable upon the stated maturity,
shall become due and payable. (Section 1.01 of the indentures)
If a series of debt securities are original issue discount
securities, the special Federal income tax, accounting and other
considerations applicable to original issue discount securities will be
discussed in the prospectus supplement relating to that series of debt
securities.
FORM, EXCHANGE AND TRANSFER
The debt securities will be issuable as registered securities, as
bearer securities or both. The indentures will provide that debt securities
may be issuable in temporary or permanent global form which will be
deposited with, or on behalf of, a depositary, which will be identified in
an applicable prospectus supplement. Unless the prospectus supplement
relating to a series of debt securities specifies otherwise, registered
securities denominated in U.S. dollars will be issued only in denominations
of $1,000 and whole multiples of $1,000 and bearer securities denominated
in U.S. dollars will be issued only in denominations of $5,000 and whole
multiples of $5,000. (Section 3.02 of the indentures)
Debt securities may be presented for exchange, and registered
securities (other than a book-entry security) may be presented for
registration of transfer (with the applicable form of transfer duly
executed), at the office of any transfer agent or at the office of the
Security Registrar (as defined in the indentures), without service charge
and upon payments of any taxes and other governmental charges as described
in the indentures. Such registration of transfer or exchange will be
effected upon the transfer agent or the Security Registrar, as the case may
be, being satisfied with the documents of title and identity of the person
making the request. (Section 3.05 of the indentures) Bearer securities will
be transferable by delivery.
A debt security in global form may not be transferred except as a
whole by the depositary for such debt security to a nominee of such
depositary or by a nominee of such depositary to such depositary or another
nominee of such depositary or by such depositary or any such nominee to a
successor of such depositary or a nominee of such successor. (Section 3.05
of the indentures) If any debt security of a series is issuable in global
form, the applicable prospectus supplement will describe any circumstances
under which beneficial owners of interests in any such global debt security
may exchange such interests for definitive debt securities of such series
of like tenor and principal amount in any authorized form and denomination,
the manner of payment of principal and interest, if any, on any such global
debt security and the specific terms of the depositary arrangement with
respect to any such global debt security.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable prospectus supplement, we
will pay principal, any premium and interest on registered securities at
the office of the paying agents designated by Hasbro, except that we may
pay interest by check mailed to, or wire transfer to the account of, the
holder. Unless otherwise indicated in an applicable prospectus supplement,
payment of any installment of interest on registered securities will be
made to the person in whose name the registered security is registered at
the close of business on the record date for such interest payment.
(Sections 3.07 and 10.02 of the indentures)
We will pay principal, any premium and interest on bearer securities
in the currency or composite of currency in the manner designated in the
prospectus supplement, subject to any applicable laws and regulations, at
the paying agencies outside the United States designated by Hasbro. The
paying agents outside the United States initially appointed by Hasbro for a
series of debt securities will be named in the prospectus supplement. If
debt securities of a series are issuable as registered securities, Hasbro
will be required to maintain at least one paying agent in each place of
payment for such series and, if debt securities of a series are issuable as
bearer securities, Hasbro will be required to maintain a paying agent in a
place of payment outside the United States where debt securities of such
series and any coupons appertaining thereto may be presented and
surrendered for payment. If the debt securities of a series are listed on
any stock exchange located outside the United States and the stock
exchange(s) require Hasbro to maintain a paying agent in a city located
outside the United States, Hasbro will comply with such requirement(s).
(Section 10.02 of the indentures)
WAIVER, MODIFICATIONS AND AMENDMENT
Described below are provisions which apply to the waiver of defaults
under, or compliance with, the indentures.
The holders of a majority of the principal amount of the outstanding
debt securities of any particular series may waive past defaults with
respect to that particular series, except for:
o defaults on any required payments; or
o defaults relating to any covenants of the indentures which cannot
be changed without the consent of each holder of a debt security
affected by such change. (Section 6.12 of the indentures)
The holders of a majority in aggregate principal amount of the
outstanding senior debt securities of each series affected (voting as a
single class and not by individual series) under the senior indenture may
waive Hasbro's compliance with some of the restrictive provisions of the
senior indenture. (Section 10.07 of the senior indenture)
Hasbro and the applicable trustee may change an indenture with the
consent of the holders of a majority in aggregate principal amount of the
debt securities outstanding under that indenture. In addition, the rights
of holders of a series of debt securities may be changed by Hasbro and the
trustee with the written consent of the holders of a majority of the
principal amount of the outstanding debt securities of each series that is
affected. However, the following changes may only be made with the consent
of each affected holder:
o changing the stated maturity of principal or of any installment
of principal or interest;
o reducing the principal amount or any premium;
o reducing the rate of interest;
o reducing any premium payable upon redemption;
o reducing the principal amount of an original issue discount
security due and payable upon an acceleration of maturity;
o changing the currency of payment of, or deleting any country
from places of payment on, the debt securities or changing the
obligation to maintain paying agencies;
o impairing the right to sue for any payment on a debt security;
o making any change which adversely affects the right to convert
a debt security or, unless provided for in the applicable
indenture, decreasing the conversion rate or increasing the
conversion price;
o modifying the subordination provisions of the subordinated
indenture to adversely affect the holders of subordinated debt
securities;
o reducing the percentage of debt securities referred to above,
the holders of which are required to consent to any waiver or
amendment; or
o modifying any of the above requirements. (Section 9.02 of the
indentures)
Under the indentures, the aggregate principal amount of any
outstanding debt securities not payable in U.S. dollars is the amount of
Dollars that could be obtained for such principal amount based on the spot
rate of exchange for such Foreign Currency or such currency unit as
determined by Hasbro or by an authorized exchange rate agent. (Section 1.01
of the indentures)
EVENTS OF DEFAULT
The following are events of default under the indentures with respect
to any series of debt securities issued:
o we fail to pay the principal or any premium when due;
o we fail to deposit any sinking fund payment when due;
o we fail to pay interest when due and continuing for 30 days;
o we fail to observe or perform any other covenant, other than a
covenant specifically relating to another series of debt
securities and such failure continues for 90 days after we
receive written notice as provided in the indentures;
o events of bankruptcy, insolvency or reorganization involving
Hasbro or a Significant Subsidiary;
o acceleration of indebtedness of Hasbro or a Significant
Subsidiary aggregating more than $50 million;
o final and nonappealable judgments or orders to pay, in the
aggregate at any one time, more than $50 million rendered by a
court of competent jurisdiction against Hasbro or a Significant
Subsidiary, continued for 90 days (during which execution shall
not be effectively stayed or bonded) without discharge or
reduction to $50 million or less; and
o any other events of default provided with respect to debt
securities of that series. (Section 6.01 of the indentures)
As used above, the term "Significant Subsidiary" has the meaning
ascribed to such term in Regulation S-X of the SEC as in effect on June 30,
1999 (i.e., a subsidiary, together with its subsidiaries, that satisfies
any of the following conditions, subject to certain exceptions: (i) Hasbro
and its other subsidiaries' investments in and advances to the subsidiary
exceed 10% of the total consolidated assets of Hasbro and its subsidiaries
(such total consolidated assets being computed as of the end of the most
recently completed fiscal year), (ii) Hasbro and its other subsidiaries'
proportionate share of the total assets of the subsidiary exceeds 10% of
the total consolidated assets of Hasbro and its subsidiaries (such total
consolidated assets being computed as of the end of the most recently
completed fiscal year) or (iii) Hasbro and its other subsidiaries' equity
in the income from continuing operations before income taxes, extraordinary
items and cumulative effect of a change in accounting principle of the
subsidiary exceeds 10% of such consolidated income of Hasbro and its
subsidiaries (such total consolidated income being computed as of the end
of the most recently completed fiscal year).
If an event of default occurs and is continuing, the trustee or the
holders of at least 25% in aggregate principal amount of the outstanding
debt securities of that series may declare each debt security of that
series due and payable immediately by a notice in writing to Hasbro (and to
the applicable trustee if given by holders). No notice is required in the
event of a bankruptcy, insolvency or reorganization involving Hasbro or a
Significant Subsidiary. (Section 6.02 of the indentures)
A holder of the debt securities of any series will only have the
right to institute a proceeding under the indentures or to seek other
remedies if:
o the holder has given written notice to the trustee of a
continuing event of default;
o the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of that series have made written
request;
o such holders have offered reasonable indemnity to the trustee to
institute proceedings as trustee;
o the trustee has not received written directions inconsistent with
such request from the holders of a majority of the principal
amount of the outstanding debt securities of that series; and
o the trustee does not institute a proceeding within 60 days.
(Section 6.07 of the indentures)
Hasbro will annually file statements with the applicable trustees
regarding our compliance with the covenants in the indentures. The
applicable trustee will generally give the holders of debt securities
notice within 90 days of the occurrence of an event of default known to the
trustee.
DEFEASANCE AND COVENANT DEFEASANCE
The indentures provide, if such provision is made applicable to the
debt securities of any series pursuant to Section 3.01 of the applicable
indenture, that, subject to certain conditions, we may elect either
o to defease and be discharged from any and all obligations with
respect to such debt securities (except as otherwise provided in
the applicable indenture) ("defeasance"); or
o to be released from our obligations with respect to any such
senior debt securities described below under "Restrictions on
Liens," and "Restrictions on Sale and Leaseback Transactions,"
("covenant defeasance").
We may do so by depositing with the applicable trustee money, and/or
certain government securities which through the payment of principal and
interest in accordance with their terms will provide money in an amount
sufficient to pay the principal and any premium and interest on such debt
securities, and any mandatory sinking fund or analogous payments on their
scheduled due dates. Such a trust may only be established if, among other
things, Hasbro has delivered to the applicable trustee an opinion of
counsel meeting the requirements set forth in the indentures. (Article five
of the indentures) The prospectus supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance with
respect to debt securities of a particular series.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Under the indentures, Hasbro has the ability to merge or consolidate
with, or sell, convey, or lease all or substantially all of our property,
to another corporation, provided that:
o it is a corporation incorporated in the United States;
o the corporation assumes all of Hasbro's obligations under the
indentures and the debt securities;
o the corporation delivers to the applicable trustee a supplemental
indenture providing for preservation of any conversion rights;
o no event of default would occur; and
o in the case of senior debt securities, if any such transaction,
or any acquisition by Hasbro of the properties of any other
person, would result in any Principal Property (as defined in the
indentures) or any shares of capital stock or indebtedness of any
subsidiary owned by Hasbro or any subsidiary becoming subject to
any lien or other security interest not permitted by the covenant
described under "Provisions Applicable Solely to Senior Debt
Securities--Restrictions on Liens," Hasbro immediately prior to
such transaction or acquisition, by supplemental indenture,
secures the payment of the principal and any premium and
interest, on the senior debt securities then outstanding (equally
and ratably with any other indebtedness entitled thereto
immediately following such transaction). (Section 8.01 of the
indentures and Section 8.03 of the senior indenture)
CONVERSION
The terms, if any, on which a series of debt securities may be
convertible into or exchangeable for our common stock or cash will be
described in the prospectus supplement relating to that series of debt
securities. The terms will include provisions as to whether conversion or
exchange is mandatory, at the option of the holder or at our option, and
will include provisions pursuant to which the number of shares of common
stock or cash to be received by the holders of the series of debt
securities would be subject to adjustment upon the occurrence of certain
events, including:
o the issuance of shares of our common stock as a dividend or
distribution on our common stock;
o subdivisions, combinations and reclassifications of our common
stock;
o the issuance generally to holders of our common stock of rights,
options or warrants entitling them (for a period not exceeding 45
days) to purchase shares of our common stock for less than the
then current market price; and
o apart from the above, the distribution generally to holders of
our common stock of evidences of indebtedness, equity securities,
or other assets (excluding cash dividends paid from earned
surplus or current net earnings but including Extraordinary Cash
Dividends, as defined in the indentures) or subscription rights
or options or warrants entitling holders to subscribe for
securities. (Section 4.04 of the indentures)
With respect to the Rights distributed under Hasbro's Rights Plan
described below under "Certain Anti-Takeover Provisions," and/or in the
event that Hasbro distributes any other rights or warrants (other than
those referred to in the preceding paragraph) ("Additional Rights") pro
rata to holders of our common stock, so long as any such Rights or
Additional Rights have not expired or been redeemed, the holder of any
convertible debt security surrendered for conversion will be entitled to
receive a number of Rights or Additional Rights as determined under the
indentures. The conversion price of the convertible debt securities will
not be subject to adjustment on account of any declaration, distribution or
exercise of Rights or Additional Rights. (Section 4.04 of the indentures)
We will not issue fractional shares of our common stock upon
conversion, but, in place of fractional shares, we will pay a cash
adjustment based on the then current market price for the common stock.
(Section 4.03 of the indentures) Upon conversion, no payments or
adjustments will be made for accrued interest on convertible debt
securities or dividends. A convertible debt security surrendered for
conversion between the record date for an interest payment and the interest
payment date (except a convertible debt security to be redeemed on a
redemption date during such period) must be accompanied by payment of an
amount equal to the interest which the registered holder is to receive with
respect to such security (or the portion of the security to be converted)
and the interest payable on such interest payment date shall,
notwithstanding such conversion, be payable on such interest payment date
to the registered holder on such record date. (Sections 3.07 and 4.02 of
the indentures)
In the case Hasbro merges or consolidates with or into any other
person (with certain exceptions) or sells or transfers all or substantially
all of its assets, the holder of convertible debt securities, after the
consolidation, merger, sale or transfer, will have the right to convert
convertible debt securities only into the kind and amount of securities,
cash and other property which the holder would have been entitled to
receive if the holder had held the common stock issuable upon conversion of
such convertible debt securities immediately prior to such consolidation,
merger, sale or transfer. (Section 4.05 of the indentures)
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
General. Senior debt securities will be issued under the senior
indenture and will rank equally with all other unsecured and unsubordinated
debt of Hasbro.
Certain Definitions. For purposes of the following discussion, the
following definitions are applicable. (Article One of the senior indenture)
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, as of any particular time, the present value (discounted at the rate
of interest implicit in the terms of the lease involved in such Sale and
Leaseback Transaction, as determined in good faith by Hasbro) of the
obligation of the lessee thereunder for rental payments during the
remaining term of such lease.
"Consolidated Net Tangible Assets" means, as determined at any time,
the aggregate amount of assets included on a consolidated balance sheet of
Hasbro and its Subsidiaries (less applicable reserves), after deducting
therefrom (a) all current liabilities of Hasbro and its Subsidiaries (which
includes current maturities of long-term indebtedness) and (b) the total of
the net book values of all assets of Hasbro and its Subsidiaries properly
classified as intangible assets under generally accepted accounting
principles, in each case as of the end of the last fiscal quarter for which
financial information is available at the time of such calculation.
"Funded Debt" means all indebtedness which by its terms matures more
than 12 months after the time of the computation of the amount thereof or
which is extendible or renewable at the option of the obligor on such
indebtedness to a time more than 12 months after the time of the
computation of the amount thereof or which is classified, in accordance
with generally accepted accounting principles, on a corporation's balance
sheet as long-term debt.
"Principal Property" means any real property, manufacturing plant,
warehouse, office building or other physical facility or other like
depreciable physical assets of Hasbro or of any Subsidiary, whether owned
at or acquired after the date of the Senior Indenture, having a net book
value at the time of the determination in excess of the greater of 5% of
Consolidated Net Tangible Assets or $50 million other than, in each case,
any of the same which in the good faith opinion of the Board of Directors
of Hasbro is not of material importance to the total business conducted by
Hasbro and its Subsidiaries as a whole. As of the date of this Prospectus
none of Hasbro's assets constitute Principal Property as defined above.
"Sale and Leaseback Transaction" means any arrangement with any
Person providing for the leasing or use by Hasbro or any Subsidiary of any
Principal Property, whether owned at the date of the Indenture or
thereafter acquired (except for temporary leases of a term, including any
renewal period, of not more than three years), which Principal Property has
been or is to be sold or transferred by Hasbro or a Subsidiary to a Person
with an intention of taking back a lease of such property.
"Secured Debt" means indebtedness (other than indebtedness among
Hasbro and its Subsidiaries) for money borrowed by Hasbro or a Subsidiary
which is secured by (a) a mortgage or other lien on any Principal Property
or (b) a pledge, lien or other security interest on any shares of stock or
evidences of indebtedness of a Subsidiary. If any amount of such
indebtedness described in the parenthetical in the preceding sentence and
held by Hasbro or a Subsidiary is transferred in any manner to any Person
other than Hasbro or a Subsidiary, such amount shall be deemed to be
Secured Debt issued on the date of transfer.
"Subsidiary" means any corporation of which Hasbro, or Hasbro and one
or more Subsidiaries, or any one or more Subsidiaries, directly or
indirectly own a majority (by number of votes) of the outstanding voting
securities having voting power under ordinary circumstances to elect the
directors of such corporation.
Restrictions on Secured Debt. If Hasbro and its Subsidiaries incur,
assume or guarantee any Secured Debt, Hasbro must secure the senior debt
securities of such series and any other indebtedness of or guaranteed by
Hasbro or any Subsidiary then entitled equally and ratably with or, at the
option of Hasbro, prior to such Secured Debt. The foregoing restrictions
are not applicable to:
o any lien or other security interest on any property hereafter
acquired, improved or constructed by Hasbro or a Subsidiary and
created within 180 days after such acquisition (or, in the case
of property constructed or improved, within 180 days after the
completion and commencement of commercial operation of such
property) to secure or provide for the payment of all or any part
of the purchase or construction price of such property;
o any lien or other security interest existing on property at the
time of acquisition by Hasbro or a Subsidiary;
o any lien or other security interest existing on the property or
on the outstanding shares or indebtedness of a corporation at the
time it becomes a Subsidiary (but not created in anticipation of
the transaction in which such corporation becomes a Subsidiary);
o any lien or other security interest on the property, shares or
indebtedness of a corporation existing at the time such
corporation is merged or consolidated with Hasbro or a Subsidiary
or at the time of a sale, lease or other disposition of the
properties of a corporation or firm as an entirety or
substantially as an entirety to Hasbro or a Subsidiary (but not
created in anticipation of any such transaction);
o any lien or other security interest in favor of governmental
bodies to secure payments of indebtedness, or extensions,
renewals or replacements of the foregoing. (Section 10.09 of the
senior indenture)
Notwithstanding the foregoing restrictions, Hasbro and any one or
more Subsidiaries may create, incur, assume or guarantee Secured Debt
(including, for purposes of this paragraph, pursuant to a transaction to
which the covenant described in the last item under "Consolidation, Merger,
Sale or Conveyance" applies) not otherwise permitted or excepted without
equally and ratably securing the senior debt securities to the extent that
the sum of (a) the amount of all Secured Debt then outstanding (other than
Secured Debt referred to in the immediately preceding paragraph and Secured
Debt deemed outstanding under the last item of "Consolidation, Merger, Sale
or Conveyance" in connection with which Hasbro secures obligations on the
senior debt securities then outstanding in accordance with the provisions
of that item) plus (b) the amount of Attributable Debt in respect of Sale
and Leaseback Transactions (other than Sale and Leaseback Transactions
described in clauses (a), (b) and (c) of the immediately succeeding
paragraph), does not at the time exceed the greater of 10% of Consolidated
Net Tangible Assets or $100 million. (Section 10.09 of the senior
indenture)
Restrictions on Sale and Leaseback Transactions. Sale and Leaseback
Transactions by Hasbro or any Subsidiary of any Principal Property are
prohibited unless at the effective time of such Sale and Leaseback
Transaction (a) Hasbro or such Subsidiary would be entitled, without
equally and ratably securing the senior debt securities, to incur Secured
Debt secured by a mortgage or security interest on the Principal Property
to be leased pursuant to "Restrictions on Secured Debt" above, or (b)
Hasbro or such Subsidiary would be entitled, without equally and ratably
securing the senior debt securities, to incur Secured Debt in an amount at
least equal to the Attributable Debt in respect of such Sale and Leaseback
Transaction, or (c) Hasbro shall apply an amount equal to such Attributable
Debt, within 180 days after the effective date of such Sale and Leaseback
Transaction, to the prepayment or retirement of senior debt securities or
certain other indebtedness for borrowed money which was recorded as Funded
Debt of Hasbro and its Subsidiaries, including the prepayment or retirement
of any mortgage, lien or other security interest in such Principal Property
existing prior to such Sale and Leaseback Transaction. The aggregate
principal amount of such senior debt securities or such other indebtedness
required to be so retired will be reduced by the aggregate principal amount
of (a) any senior debt securities delivered within 180 days after the
effective date of any such Sale and Leaseback Transaction to the Trustee
for retirement and (b) such other indebtedness retired by Hasbro or a
Subsidiary within 180 days after the effective date of such Sale and
Leaseback Transactions. (Section 10.10 of the senior indenture)
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
Subordination. The subordinated debt securities will be subordinate
in right of payment to the extent set forth in the subordinated indenture
to all existing and future Senior Indebtedness (as defined below) of
Hasbro. In the event of any distribution of our assets in any dissolution,
winding down, liquidation or reorganization of Hasbro, payment in full must
be made on the Senior Indebtedness before any payment is made on the
subordinated debt securities. Upon the happening and during the continuance
of a default in payment of principal of or any sinking fund installments
due with respect to, or interest on, any Senior Indebtedness, Hasbro may
not make any payments of principal or any interest or premium, on the
subordinated debt securities unless and until such default shall have been
remedied. Hasbro will also not be able to make any payments on the
subordinated debt securities if a default described in the preceding
sentence would result. No such subordination will prevent the occurrence of
any event of default. (Sections 13.02 and 13.03 of the subordinated
indenture)
"Senior Indebtedness" means the principal of and premium, if any, and
interest (whether accruing before or after filing of any petition in
bankruptcy or any similar proceeding by or against Hasbro) on any
Indebtedness of Hasbro, whether outstanding on the date of issuance of the
applicable series of subordinated debt securities or thereafter incurred,
assumed or guaranteed; excluding, however, (i) the subordinated debt
securities, (ii) any Indebtedness of Hasbro which, by its terms or the
terms of the instrument creating or evidencing it, is subordinate in right
of payment to or pari passu with the subordinated debt securities.
"Indebtedness" means (1) any liability of any Person (a) for borrowed
money, (b) evidenced by a note, debenture or similar instrument (including
an obligation with or without recourse) issued in connection with the
acquisition (whether by way of purchase, merger, consolidation or
otherwise) of any business, real property or other assets (other than
inventory or similar property acquired in the ordinary course of business)
or (c) for the payment of money relating to a Capital Lease Obligation (as
defined in the Subordinated Indenture); (2) any liability of others
described in the preceding clause (1) which the Person has guaranteed or
which is otherwise its legal liability or (3) any amendment, renewal,
extension or refunding of any such liability.
The Indentures do not limit the amount of additional Indebtedness,
including Senior Indebtedness or Indebtedness ranking equally with the
subordinated debt securities, which Hasbro or any Subsidiary can create,
incur, assume or guarantee. As a result of these subordination provisions
and the requirement that certain payments be paid over to holders of Senior
Indebtedness, in the event of insolvency, holders of the subordinated debt
securities may recover less ratably than general creditors of Hasbro.
(Section 13.02 of the subordinated indenture)
DESCRIPTION OF COMMON STOCK
GENERAL
Hasbro's authorized capital stock consists of 300,000,000 shares of
common stock, and 5,000,000 shares of preference stock. No shares of
preference stock were issued or outstanding as of June 30, 1999. However,
60,000 shares of preference stock (the "Junior Participating Preference
Stock") have been authorized and reserved for issuance in connection with
the preference stock purchase rights (the "Rights") described in "Certain
Anti-Takeover Provisions -- Shareholders Rights Plan" and "--Junior
Participating Preference Stock."
VOTING RIGHTS
Each holder of common stock is entitled to one vote for each share
held on all matters to be voted upon by shareholders.
DIVIDEND RIGHTS
The holders of common stock, subject to the rights of holders of any
outstanding preference stock, are entitled to receive dividends as
determined by the
board of directors.
LIQUIDATION RIGHTS AND OTHER PROVISIONS
Subject to the prior rights of creditors and the holders of any
outstanding preference stock, the holders of the common stock are entitled
to share ratably in our remaining assets in the event of a liquidation,
dissolution or winding up of Hasbro.
The common stock is fully paid and is not liable to any calls or
assessments and is not convertible into any other securities. There are no
redemption or sinking fund provisions applicable to the common stock, and,
in accordance with the Rhode Island Business Corporation Act and the
Articles of Incorporation, there are no preemptive rights.
BankBoston, N.A., acting directly and through EquiServe L.P., acts as
transfer agent and registrar for the common stock.
DIRECTORS' LIABILITY
Our Articles of Incorporation provide that, to the fullest extent
permitted by the Rhode Island Business Corporation Act, a member of the
board of directors will not be personally liable to Hasbro or its
shareholders for monetary damages for breaches of his or her legal duties
to Hasbro or our shareholders as a director, except for liability:
o for any breach of the director's duty of loyalty to Hasbro or our
shareholders;
o for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
o for unlawfully declaring dividend payments or purchasing stock;
or
o for any transaction from which the director derived an improper
personal benefit, other than as permitted under Section 7-1.1-37
of the Rhode Island Business Corporation Act.
In addition, we have entered into an indemnification agreement
with each of our directors, whereby we have agreed to indemnify each
director for amounts that the director is legally obligated to pay,
including judgments, settlements of fines (including certain related
expenses to be advanced by us), due to any actual or alleged breach of
duty, neglect, error, misstatement, misleading statement or other act or
omission by a director in his or her capacity as a director, excluding
claims:
o covered by our directors and officers liability insurance policy;
o for which the director is otherwise indemnified or reimbursed;
o relating to certain judgments or adjudications under which the
director is liable for breaches of duty of loyalty, acts or
omissions not in good faith or involving intentional misconduct
or involving knowing violations of law, actions or certain
transactions from which the director derives an improper personal
benefit
o relating to the director's liability for accounting for profits
under Section 16 of the Exchange Act;
o in respect of remuneration, if found unlawful; and
o as to which a final and non-appealable judgment has determined
that payment to the director thereunder is unlawful.
In addition, our By-Laws include certain provisions which provide
that our directors and officers generally shall be indemnified against
specific liabilities to the fullest extent permitted or required by the
Rhode Island Business Corporation Act.
CERTAIN ANTI-TAKEOVER PROVISIONS
The provisions of the Articles of Incorporation summarized in the
succeeding paragraphs could have an anti-takeover effect. These provisions
are intended to enhance the likelihood of continuity and stability in the
composition of our Board of Directors and in their policies. They may,
however, delay, defer or prevent a tender offer or takeover attempt that a
shareholder might consider to be in his or her best interest, including
those attempts that might result in a premium over the market price for the
shares held by shareholders.
Our Board of Directors is divided into three classes that are elected
for staggered three-year terms. Directors can be removed from office only
for cause and, with certain exceptions, only with the approval of a
majority vote of the entire Board of Directors or by the affirmative vote
of holders of a majority of the then outstanding shares of capital stock of
Hasbro entitled to vote for such directors. Vacancies on the Board of
Directors may be filled only by the remaining directors and not by the
shareholders.
Under the Articles of Incorporation, the Board of Directors by
resolution may establish one or more series of preference stock having such
number of shares, designation, relative voting rights, dividend rates,
liquidation and other rights, preferences and limitations as may be fixed
by the Board of Directors without any further shareholder approval. Such
rights, preferences, privileges and limitations as may be established could
have the effect of impeding or discouraging the acquisition of control of
Hasbro.
The Articles of Incorporation also provide that any action required
or permitted to be taken by our shareholders may be effected only at an
annual or special meeting of shareholders, or by the unanimous written
consent of shareholders.
In order to approve a number of extraordinary corporate transactions
(such as a merger, consolidation or sale of all or substantially all
assets) with an Interested Person, our Articles of Incorporation require:
o an 80% vote of all outstanding Company shares entitled to vote,
including a majority vote of all disinterested shareholders;
o the approval of a majority of the entire Board of Directors,
including the affirmative vote of a majority of the "Continuing
Directors" (as defined in the Articles of Incorporation); and
o the satisfaction of procedural requirements which are intended to
assure that shareholders are treated fairly under the
circumstances.
The 80% vote will not be required and, in accordance with the Rhode
Island Business Corporation Act, only a majority vote of shareholders will
generally be required if such a transaction is approved by a majority of
the entire Board of Directors, including the affirmative vote of at least
two-thirds of the Continuing Directors.
SHAREHOLDERS RIGHTS PLAN
On June 16, 1999, we entered into a rights agreement with BankBoston,
N.A., as Rights Agent. This agreement replaced a previous rights agreement,
dated June 4, 1989, which expired on June 30, 1999. As with most
shareholder rights agreements, the terms of our rights agreement are
complex and not easily summarized, particularly as they relate to the
acquisition of our common stock and to exercisability of the Rights. This
summary may not contain all of the information that is important to you.
Accordingly, you should carefully read our rights agreement, which is
incorporated by reference into this prospectus in its entirety. Capitalized
terms used in this summary and not otherwise defined shall have the
meanings given to them in the rights agreement.
The Rights attach to all certificates representing shares of common
stock outstanding at the close of business on June 30, 1999 and will attach
to any shares of common stock issued by Hasbro, including upon the exercise
of any warrants and options or upon conversion of any convertible debt
securities, after this date and prior to the Distribution Date (as defined
below). The Rights will become exercisable and will separate from the
common stock and be represented by separate certificates on the
Distribution Date; the date which is approximately 10 days after anyone
acquires or commences a tender offer to acquire 15% of more of our
outstanding common stock (an "Acquiring Person"). The Rights will not be
exercisable until such date, if any, and will expire on June 30, 2009,
unless this date is extended or unless the Rights are earlier exchanged or
redeemed by Hasbro. Upon the Distribution Date, the Rights will initially
be exercisable, at a price of $140, for one - ten thousandth of a share of
Hasbro's Series C Preference Stock, although the terms of the exercise are
subject to adjustment under the rights agreement. Under the rights
agreement, the following are not Acquiring Persons:
o Hasbro;
o any of our subsidiaries;
o employee benefit plans of Hasbro or any of our subsidiaries;
o individuals and entities connected with the Hassenfeld family, as
described in the rights agreement;
o any person who becomes the owner of 15% or more of the common
stock by virtue of a repurchase of common stock by Hasbro, unless
after becoming aware of this fact, such person acquires an
additional 1%; and
o any person who reports the ownership of 15% or more of the common
stock in a filing under the Exchange Act, who does not state any
intention to control the management of Hasbro and who, upon
request, certifies to Hasbro that the 15% threshold was crossed
inadvertently and with no knowledge of the terms of the Rights.
Upon any person becoming an Acquiring Person (other than in a tender
offer or exchange offer for all outstanding shares that has been determined
by the Board of Directors, after receiving advice from one or more
investment banking firms, to be at a price which is fair to and otherwise
in the best interests of the shareholders), each Right will entitle the
holder to purchase a number of shares of common stock of Hasbro having a
then current market value of twice the exercise price of the Right. For
example, at the initial exercise price of $140, upon exercise, each Right
would entitle its holder to receive $280 worth of common stock (or other
consideration, as described below).
In addition, each Right will entitle the holder to purchase a number
of shares of common stock of the acquiring company having a current market
value of twice the exercise price of the Right, if, after the date upon
which someone has become an Acquiring Person:
o Hasbro is party to a merger or another business combination
transaction in which Hasbro is not the surviving corporation;
o Hasbro is the surviving corporation in a merger or other business
combination, but all or part of its common stock is changed into
or exchanged for stock or other securities of another person,
cash or any other property; or
o Hasbro sells 50% or more of its consolidated assets, cash flow or
earning power.
If any of the above events occurs, the acquiring company shall assume all
of our obligations under the rights agreement.
From and after the occurrence of the event which triggers the
exercise of the Rights, any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or any Associate or Affiliate)
shall be void and any holder of such Rights shall thereafter have no right
to exercise such Rights.
At any time prior to the earlier of ten business days following the
date upon which someone has become an Acquiring Person and the expiration
date of the Rights, our Board of Directors may redeem all (but not less
than all) of the outstanding Rights at a price of $.01 per Right, subject
to adjustment, payable in cash, shares of common stock or other
consideration. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate, and the only right of the holders of
Rights will be to receive the redemption price. The exercisability of the
Rights triggered by someone becoming an Acquiring Person, as described
above, will not occur until after the expiration of this redemption right.
If, however, a majority of our Board of Directors was elected by
shareholder action by written consent or is not comprised of members who
were nominated by the predecessor Board of Directors, the Rights shall not
be redeemed if such redemption is likely to have the effect of allowing
anyone to become an Acquiring Person or to otherwise trigger the
exercisability of the Rights, as described above, for a period of 180 days
following such election.
At any time after a person becomes an Acquiring Person and prior to
the acquisition by a person or group of 50% or more of our outstanding
common stock, our Board of Directors may exchange the Rights (other than
Rights owned by such person or group which have become void), in whole or
in part, at an exchange ratio of one share of common stock per Right,
subject to adjustment.
In the event that, after the Rights become exercisable for shares of
our common stock, there is an insufficient number of shares of our common
stock available to permit the full exercise of Rights, our Board of
Directors has the ability to substitute an equivalent value in:
o cash;
o a reduction in the exercise price of the Right;
o shares of preference stock with an equivalent value to our common
stock;
o debt securities;
o other assets; or
o any combination of the foregoing.
Prior to the Distribution Date, the rights agreement may be amended
by our Board of Directors without the consent of the holders of the Rights.
After the Distribution Date, the rights agreement may only be amended by
our Board of Directors, without the consent of the holders of the Rights,
as follows:
o to cure any ambiguity;
o to correct any provisions which are defective or inconsistent;
o to shorten or lengthen any time period, though any lengthening
must be for the purpose of protecting the interests of the
holders of the Rights; or
o to make changes which do not adversely affect the interests of
the holders of the Rights.
The rights agreement may not be amended, however, at any time when the
Rights are not redeemable.
Until a holder of a Right exercises such Right, such holder will have
no rights as a shareholder of Hasbro, including, without limitation, the
right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
shareholders or to Hasbro, shareholders may, depending on the
circumstances, recognize taxable income in the event that the Rights become
exercisable for our common stock (or other consideration) or in the event
the Rights are redeemed by Hasbro.
The Rights may have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire
Hasbro in a manner which causes the Rights to become exercisable. The
Rights, however, should not affect any prospective offeror willing to make
an offer at a price that is fair and otherwise in the best interests of the
shareholders. The Rights should not interfere with any merger or business
combination approved by our Board of Directors since the Board may, at its
option, exercise its right to redeem the Rights as described above.
JUNIOR PARTICIPATING PREFERENCE STOCK
In connection with the rights agreement, 60,000 shares of Series C
Junior Participating Preference Stock have been reserved and authorized for
issuance by the Board of Directors. No shares of Junior Participating
Preference Stock were outstanding as of June 30, 1999. The following
statements with respect to the Junior Participating Preference Stock do not
purport to be complete and are subject to, and are qualified in their
entirety by reference to, the detailed provisions of the Articles of
Incorporation, including the Certificate of Designation relating to the
Junior Participating Preference Stock (the "Certificate of Designation"),
which is incorporated herein by reference.
Shares of Junior Participating Preference Stock purchasable upon
exercise of the Rights will not be redeemable. Each share of Junior
Participating Preference Stock will be entitled to a minimum preferential
quarterly dividend payment of $10 per share but will be entitled to an
aggregate dividend of 10,000 times the dividend declared per share of
common stock. In the event of liquidation, the holders of the Junior
Participating Preference Stock will be entitled to a minimum preferential
liquidation payment of $10,000 per share, plus accrued and unpaid
dividends, and will also be entitled to preferential treatment on the
distribution of any remaining assets. Each share of Junior Participating
Preference Stock will have 10,000 votes, voting together with the common
stock. In the event of any merger, consolidation or other transaction in
which shares of common stock are exchanged, each share of Junior
Participating Preference Stock will be entitled to receive 10,000 times the
amount received per share of common stock. These rights are subject to
proportionate adjustment in the event of certain stock splits,
recombinations and other events.
PLAN OF DISTRIBUTION
DEBT SECURITIES
We may sell debt securities directly or to or through one or more
underwriters, agents or dealers who will be named in the prospectus
supplement or an underwriting syndicate, represented by one or more
managing underwriters, that would be named in the prospectus supplement
relating to an issue of offered debt securities.
The distribution of the debt securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
In connection with underwritten offerings of the debt securities and
in accordance with applicable law and industry practice, underwriters may
over-allot or effect transactions which stabilize, maintain or otherwise
affect the market price of the debt securities at levels above those which
might otherwise prevail in the open market, including by entering
stabilizing bids, effecting syndicate covering transactions or imposing
penalty bids. A stabilizing bid means the placing of any bid, or the
effecting of any purchase, for the purpose of pegging, fixing or
maintaining the price of a security. A syndicate covering transaction means
the placing of any bid on behalf of the underwriting syndicate or the
effecting of any purchase to reduce a short position created in connection
with the offering. A penalty bid means an arrangement that permits the
managing underwriter to reclaim a selling concession from a syndicate
member in connection with the offering when debt securities originally sold
by such syndicate member are purchased in syndicate covering transactions.
Such transactions may be effected in the over-the-counter market or
otherwise. Underwriters are not required to engage in any of these
activities. Any such activities, if commenced, may be discontinued at any
time.
In connection with the sale of debt securities to underwriters,
underwriters may receive compensation in the form of discounts, concessions
or commissions from Hasbro or from purchasers of debt securities for whom
they may act as agents. Underwriters and dealers that participate in the
distribution of debt securities may be deemed to be underwriters, and any
discounts or commissions received by them and any profit on the resale of
debt securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter will be
identified, and any such compensation will be described, in the prospectus
supplement.
Debt securities may be sold directly by Hasbro or through agents
designated by Hasbro from time to time. Any agent involved in the offer or
sale of the debt securities in respect of which this prospectus is
delivered will be named, and any commissions payable by Hasbro to such
agent will be set forth, in the prospectus supplement. Unless otherwise
indicated in the prospectus supplement, any such agent will be acting on a
best efforts basis for the period of its appointment.
Under agreements which may be entered into by Hasbro, underwriters,
agents and dealers who participate in the distribution of debt securities
may be entitled to indemnification by Hasbro against certain liabilities,
including liabilities under the Securities Act, or to contribution with
respect to payments which such underwriters, dealers, or agents may be
required to make in respect thereof. Such underwriters, dealers or agents
may engage in transactions with, or perform services for, Hasbro in the
ordinary course of business.
The debt securities are a new issue of securities with no established
trading market. In the event that debt securities of a series offered
hereunder are not listed on a national securities exchange, certain
broker-dealers may make a market in the debt securities, but will not be
obligated to do so and may discontinue any market making at any time
without notice. No assurance can be given that any broker-dealer will make
a market in the debt securities of any series or as to the liquidity of the
trading market for the debt securities. Any such market making may be
discontinued at any time.
STOCK SALES BY SELLING SHAREHOLDERS
The selling shareholders or their respective successors (including
permitted assignees, pledgees, donees, transferees or other successors in
interest) may sell all of their shares from time to time in transactions on
the securities markets and exchanges, including the NYSE, in the over the
counter market, in privately negotiated transactions, or through writing
options or warrants on their shares or otherwise. They may sell shares at
fixed prices that may change, at market prices prevailing at the time of
sale, at prices relating to prevailing market prices or at negotiated
prices. Under certain circumstances, the selling shareholders may sell
their shares pursuant to Rule 144 or another exemption from registration
under the Securities Act in lieu of selling their shares pursuant to this
prospectus. The selling shareholders may sell shares in any manner
permitted by law, including through underwriters, licensed brokers, dealers
or agents, and directly to one or more purchasers.
Sales of shares of common stock may involve:
o sales to underwriters, who will acquire shares of common stock
for their own account and resell them in one or more transactions at fixed
prices or at varying prices determined at that time of sale;
o block transactions in which the broker or dealer so engaged may
sell shares as agent or principal;
o purchases by a broker or dealer as principal who resells the
shares for its account;
o an exchange distribution in accordance with the rules of any such
exchange;
o ordinary brokerage transactions and transactions in which a
broker solicits purchasers; and
o privately negotiated sales, which may include sales directly to
institutions.
The selling shareholders have advised us that, as of the date of this
prospectus, they have not entered into any agreements, understandings or
arrangements for the sale of the shares with any underwriters or
broker-dealers and that no underwriter or coordinating broker-dealer is now
acting in connection with the proposed sale of shares. At the time a
particular offering of shares is made and to the extent required, the
aggregate number of shares being offered, the name or names of the selling
shareholders and the terms of the offering, including the names of the
underwriters, broker-dealers or agents, any discounts, concessions or
commissions and other terms constituting compensation from the selling
shareholders, and any discounts, concessions or commissions allowed or
re-allowed or paid to broker-dealers, will be set forth in an accompanying
prospectus supplement.
Broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the selling shareholders and/or the
purchasers. The selling shareholders and any broker-dealers, agents or
underwriters that participate with the selling shareholders in the
distribution of shares offered by this prospectus may be deemed to be
"underwriters" within the meaning of the Securities Act. Accordingly, the
selling shareholders will be subject to the prospectus delivery
requirements of the Securities Act. Any commissions paid or any discounts
or concessions allowed to these persons, and any profits received on the
resale of the shares offered by this prospectus and purchased by these
persons, may be deemed to be underwriting commissions or discounts under
the Securities Act.
Under the rules and regulations under the Exchange Act, any person
engaged in a distribution of the shares offered pursuant to this prospectus
may be limited in its ability to engage in market activities with respect
to those shares. Each selling shareholder will be subject to the provisions
of the Exchange Act and the rules and regulations under the Exchange Act,
including Regulation M. Those rules and regulations may limit the timing of
purchases and sales of any shares offered by the selling shareholders
pursuant to this prospectus, which may affect the marketability of the
shares offered by this prospectus.
We will pay all expenses (other than selling commissions and fees and
stock transfer taxes) of the registration and sale of shares. We also have
agreed to indemnify the selling shareholders against certain liabilities,
including liabilities under the Securities Act.
We may suspend the use of this prospectus by the selling shareholders
under certain circumstances.
We will not receive any proceeds from sales of shares by selling
shareholders. We cannot guarantee that the selling shareholders will sell
any or all of their shares.
LEGAL MATTERS
The validity of the securities offered by this prospectus will be
passed upon for Hasbro by Phillip H. Waldoks, Senior Vice President --
Corporate Legal Affairs and Secretary of Hasbro. Mr. Waldoks will rely as
to matters of Rhode Island law on the opinion of Cynthia S. Reed, Senior
Vice President and General Counsel of Hasbro. Mr. Waldoks owns 3,600 shares
of Common Stock and has options to purchase 139,905 shares of Common Stock
granted under Hasbro's employee stock option plans. Ms. Reed owns 9,420
shares of Common Stock and has options to purchase 84,750 shares of Common
Stock granted under Hasbro's employee stock option plans. Certain legal
matters with respect to the debt securities offered by this prospectus will
be passed upon for any underwriters, dealers or agents by Skadden, Arps,
Slate, Meagher & Flom LLP, New York, New York.
EXPERTS
The consolidated financial statements incorporated by reference and
schedule included in the Annual Report on Form 10-K of Hasbro for the
fiscal year ended December 27, 1998 incorporated by reference herein and
elsewhere in the Registration Statement, have been incorporated by
reference herein and in the registration statement in reliance upon the
reports of KPMG LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and
distribution of the securities being registered, other than underwriting
discounts and commissions, will be paid by the Registrant and are:
Filing Fee for Registration Statement................... $217,298.27
Rating Agency Fees.................................... 200,000
Legal Fees and Expenses................................. 50,000
Accounting Fees and Expenses............................ 50,000
Printing and Engraving Fees............................. 35,000
Trustees' Fees.......................................... 12,000
Miscellaneous........................................... 5,701.73
-----------
Total............................................ $570,000.00
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant is incorporated in Rhode Island. Under Section
7-1.1-4.1 of the Rhode Island Business Corporation Act, a Rhode Island
corporation has the power, under specified circumstances, to indemnify its
officers, directors, employees and agents against judgments, penalties,
fines, settlements and reasonable expenses, including attorneys' fees,
actually incurred by them in connection with any proceeding to which such
persons were made parties by reason of the fact that such persons are or
were directors, officers, employees or agents, if (a) such persons shall
have acted in good faith, (b) they reasonably believed that their actions
were in the best interests of the corporation (if such proceeding involves
conduct in an official capacity with the corporation) or not opposed to the
best interests of the corporation (if such proceeding involves conduct
other than in an official capacity with the corporation), and (c) in
criminal proceedings, they had no reasonable cause to believe that their
conduct was unlawful. The foregoing statement is subject to the detailed
provisions of 7-1.1-4.1 of the Rhode Island Business Corporation Act.
Article X of the By-Laws of the Registrant provides that the
Registrant shall indemnify its directors and officers to the full extent
permitted by Section 7-1.1-4.1 of the Rhode Island Business Corporation
Act.
Section 7-1.1-48 of the Rhode Island Business Corporation Act
provides that articles of incorporation may contain a provision eliminating
or limiting the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a
director provided that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of
loyalty to the corporation or its shareholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 7-1.1-43 (relating to liability for
unauthorized acquisitions or redemptions of, or dividends or distribution
on, capital stock) of the Rhode Island Business Corporation Act, or (iv)
for any transaction from which the director derived an improper personal
benefit (unless said transaction is permitted by Section 7-1.1-37.1
(relating to director conflicts of interest) of the Rhode Island Business
Corporation Act). Article Thirteenth of the Registrant's Articles of
Incorporation contains such a provision.
Section 7-1.1-4.1(j) of the Rhode Island Business Corporation
Act empowers a Rhode Island corporation to purchase and maintain insurance
on behalf of its current and prior directors, officers, employees and
agents against any liability incurred or asserted against them as a result
of their official capacities, whether or not the corporation would have the
power to indemnify such person against the insured liability under the
provisions of such Section. The Registrant has a directors and officers
liability insurance policy.
The Registrant has entered into an indemnification agreement
with each of its directors, whereby the Registrant has agreed to indemnify
each such director for amounts which the director is legally obligated to
pay, including judgments, settlements of fines (including certain related
expenses to be advanced by the Registrant), due to any actual or alleged
breach of duty, neglect, error, misstatement, misleading statement or other
act or omission by a director in his capacity as a director, excluding
claims (a) covered by the Registrant's directors and officers liability
insurance policy, (b) for which the director is otherwise indemnified or
reimbursed, (c) relating to certain judgments or adjudications under which
the director is liable for breaches of duty of loyalty, acts or omissions
not in good faith or involving intentional misconduct or involving knowing
violations of law, actions or certain transactions from which the director
derives an improper personal benefit, (d) relating to the director's
liability for accounting for profits under Section 16 of the Securities
Exchange Act of 1934, as amended, (e) in respect of remuneration, if found
unlawful, and (f) as to which a final and non-appealable judgement has
determined that payment to the director thereunder is unlawful.
In addition, any underwriting agreement entered into in
connection with our sale of debt securities will provide for
indemnification of directors and officers of the Registrant under certain
circumstances.
ITEM 16. LIST OF EXHIBITS
The following Exhibits are filed as part of this Registration
Statement:
1.1 Form of Underwriting Agreement (incorporated by
reference to Exhibit 1.1 to Hasbro's Registration
Statement on Form S-3, dated June 24, 1998,
Registration No. 333-44101).
3.1 Restated Articles of Incorporation of Hasbro
(incorporated by reference to Exhibit (c)(2) to
Hasbro's Current Report on Form 8-K, dated July 15,
1993, File No. 1-6682).
3.2 Amended and Restated Bylaws of Hasbro (incorporated by
reference to Exhibit (3) to Hasbro's Current Report on
Form 8-K, dated February 16, 1996, File No. 1-6682).
4.1 Form of the Indenture between Registrant and a banking
institution, as trustee, relating to Senior Debt
Securities.
4.2 Form of the Indenture between Registrant and a banking
institution, as trustee, relating to subordinated debt
securities (incorporated by reference to Exhibit 4.2 to
Hasbro's Registration Statement on Form S-3, dated June
24, 1998, Registration No. 333-44101).
4.3 Rights Agreement dated June 16, 1999 between Hasbro and
BankBoston, N.A. (incorporated by reference to Exhibit
4 to Hasbro's Current Report on Form 8-K dated June 16,
1999).
4.4 Warrant, dated October 14, 1997, between Hasbro and
Lucas Licensing Ltd. (incorporated by reference to
Exhibit 10(h) to Hasbro's Annual Report on Form 10-K
for the Fiscal Year ended on December 27, 1998, File
No. 1-6682).
4.5 Warrant, dated October 14, 1997, between Hasbro and
Lucasfilm Ltd. (incorporated by reference to Exhibit
10(i) to Hasbro's Annual Report on Form 10-K for the
Fiscal Year ended on December 27, 1998, File No.
1-6682).
4.6 Warrant, dated October 30, 1998, between Hasbro and
Lucas Licensing Ltd. (incorporated by reference to
Exhibit 10(j) to Hasbro's Annual Report on Form 10-K
for the Fiscal Year ended on December 27, 1998, File
No. 1-6682).
4.7 Warrant, dated October 30, 1998, between Hasbro and
Lucasfilm Ltd. (incorporated by reference to Exhibit
10(k) to Hasbro's Annual Report on Form 10-K for the
Fiscal Year ended on December 27, 1998, File No.
1-6682).
5.1 Opinion of Phillip H. Waldoks, Senior Vice President -
Corporate Legal Affairs and Secretary of Hasbro.*
12.1 Calculation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12 to Hasbro's
Quarterly Report on Form 10-Q for the Fiscal Quarter
ended on March 28, 1999, File No. 1-6682).
23.1 Consent of KPMG LLP.
23.2 Consent of Phillip H. Waldoks, Senior Vice President
Corporate Legal Affairs and Secretary of Hasbro
(included as part of Exhibit 5.1).
24.1 Powers of Attorney (contained on pages II-7 through
II-9)
25.1 Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of the trustee*
- -----------------------
* To be filed and incorporated by reference herein in connection with
the offering of securities.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective amendment
to this Registration
Statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act:
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
this Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the lower or higher end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement;
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered hereby which remain unsold
at the termination of the offering.
4. That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
5. To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of Section 310 of
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") in
accordance with the rules and regulations prescribed by the Securities and
Exchange Commission under Section 305(b)(2) of the Trust Indenture Act.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted against the
Registrant by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on
the 1st day of July, 1999.
HASBRO, INC.
By /s/ Alan G. Hassenfeld
------------------------------
Alan G. Hassenfeld
Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each person whose
signature appears below constitutes and appoints each of Harold P. Gordon,
John T. O'Neill, Brenda T. Simensky and Phillip H. Waldoks as such person's
true and lawful attorney-in-fact and agent, with full power of substitution
and revocation, for such person and in such person's name, place and stead,
in any and all capacities to sign any and all amendments (including
post-effective amendments) to this registration statement, and any
registration statement for the same offering that is to be effective under
Rule 462(b) of the Securities Act, and to file the same with all exhibits
thereto, and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto each of said attorneys-in-fact and
agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and
purposes as such person might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Alan G. Hassenfeld Chairman of the Board and July 1, 1999
- ----------------------------- Chief Executive Officer
ALAN G. HASSENFELD and Director (Principal
Executive Officer)
/s/ John T. O'Neill Executive Vice President July 1, 1999
- ----------------------------- and Chief Financial Officer
JOHN T. O'NEILL (Principal Financial and
Accounting Officer)
/s/ Alan R. Batkin Director July 1, 1999
- -----------------------------
ALAN R. BATKIN
/s/ Herbert M. Baum Director July 1, 1999
- -----------------------------
HERBERT M. BAUM
/s/ E. Gordon Gee Director July 1, 1999
- -----------------------------
E. GORDON GEE
/s/ Harold P. Gordon Director July 1, 1999
- -----------------------------
HAROLD P. GORDON
/s/ Alex Grass Director July 1, 1999
- -----------------------------
ALEX GRASS
/s/ Sylvia K. Hassenfeld Director July 1, 1999
- -----------------------------
SYLVIA K. HASSENFELD
/s/ Marie-Josee Kravis Director July 1, 1999
- -----------------------------
MARIE-JOSEE KRAVIS
Director
- -----------------------------
MORRIS W. OFFIT
/s/ Norma T. Pace Director July 1, 1999
- -----------------------------
NORMA T. PACE
/s/ E. John Rosenwald, Jr. Director July 1, 1999
- -----------------------------
E. JOHN ROSENWALD, JR.
Director
- -----------------------------
CARL SPIELVOGEL
/s/ Preston Robert Tisch Director July 1, 1999
- -----------------------------
PRESTON ROBERT TISCH
/s/ Alfred J. Verrecchia Director July 1, 1999
- -----------------------------
ALFRED J. VERRECCHIA
/s/ Paul Wolfowitz Director July 1, 1999
- -----------------------------
PAUL WOLFOWITZ
Exhibit 4.1
HASBRO, INC.
AND
[ ],
as Trustee
_______________
Senior Debt Securities
_______________
Senior Debt Indenture
Dated as of [ ]
_______________
TABLE OF CONTENTS
PAGE
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 Compliance Certificates and Opinions . . . . . . . . 12
SECTION 1.03 Form of Documents Delivered to Trustee . . . . . . . 13
SECTION 1.04 Acts of Holders . . . . . . . . . . . . . . . . . . 14
SECTION 1.05 Notices, Etc., to Trustee and Company . . . . . . . 16
SECTION 1.06 Notice to Holders; Waiver . . . . . . . . . . . . . 17
SECTION 1.07 Conflict with Trust Indenture Act . . . . . . . . . 18
SECTION 1.08 Effect of Headings and Table of Contents . . . . . . 18
SECTION 1.09 Successors and Assigns . . . . . . . . . . . . . . . 18
SECTION 1.10 Separability Clause . . . . . . . . . . . . . . . . 18
SECTION 1.11 Benefits of Indenture . . . . . . . . . . . . . . . 18
SECTION 1.12 Governing Law . . . . . . . . . . . . . . . . . . . 18
SECTION 1.13 Moneys of Different Currencies to Be Segregated . . 18
SECTION 1.14 Payment to Be in Proper Currency . . . . . . . . . . 19
SECTION 1.15 Counterparts . . . . . . . . . . . . . . . . . . . . 19
SECTION 1.16 Legal Holidays . . . . . . . . . . . . . . . . . . . 19
ARTICLE II
SECURITY FORMS
SECTION 2.01 Forms Generally . . . . . . . . . . . . . . . . . . 20
SECTION 2.02 Form of Trustee's Certificate of Authentication . . 21
SECTION 2.03 Securities in Global Form. . . . . . . . . . . . . . 21
ARTICLE III
THE SECURITIES
SECTION 3.01 Amount Unlimited; Issuable in Series . . . . . . . . 22
SECTION 3.02 Denominations . . . . . . . . . . . . . . . . . . . 26
SECTION 3.03 Execution, Authentication, Delivery and Dating . . . 26
SECTION 3.04 Temporary Securities . . . . . . . . . . . . . . . . 29
SECTION 3.05 Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.06 Mutilated, Destroyed, Lost and Stolen Securities . . 34
SECTION 3.07 Payment of Interest; Interest Rights Preserved . . . 35
SECTION 3.08 Persons Deemed Owners . . . . . . . . . . . . . . . 37
SECTION 3.09 Cancellation . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.10 Computation of Interest . . . . . . . . . . . . . . 38
ARTICLE IV
CONVERSION OF SECURITIES
SECTION 4.01 Applicability of Article . . . . . . . . . . . . . . 38
SECTION 4.02 Exercise of Conversion Privilege . . . . . . . . . . 39
SECTION 4.03 Fractional Interests . . . . . . . . . . . . . . . . 41
SECTION 4.04 Adjustment of Conversion Price . . . . . . . . . . . 42
SECTION 4.05 Continuation of Conversion Privilege in Case of
Merger, Consolidation or Sale of Assets . . . . . 47
SECTION 4.06 Notices of Certain Events . . . . . . . . . . . . . 48
SECTION 4.07 Taxes on Conversion . . . . . . . . . . . . . . . . 49
SECTION 4.08 Company to Provide Stock . . . . . . . . . . . . . . 50
SECTION 4.09 Disclaimer of Responsibility for Certain Matters . . 50
SECTION 4.10 Return of Funds Deposited for Redemption of
Converted Convertible Securities . . . . . . . . . 51
ARTICLE V
SATISFACTION, DISCHARGE AND DEFEASANCE
SECTION 5.01 Satisfaction and Discharge of Indenture. . . . . . . 51
SECTION 5.02 Application of Trust Money . . . . . . . . . . . . . 53
SECTION 5.03 Satisfaction, Discharge and Defeasance of
Securities of Any Series . . . . . . . . . . . . . 54
ARTICLE VI
REMEDIES
SECTION 6.01 Events of Default . . . . . . . . . . . . . . . . . 57
SECTION 6.02 Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.03 Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . 61
SECTION 6.04 Trustee May Enforce Claims without Possession of
Securities . . . . . . . . . . . . . . . . . . . . 62
SECTION 6.05 Trustee May File Proofs of Claim . . . . . . . . . . 62
SECTION 6.06 Application of Money Collected . . . . . . . . . . . 62
SECTION 6.07 Limitation on Suits . . . . . . . . . . . . . . . . 63
SECTION 6.08 Restoration of Rights and Remedies . . . . . . . . . 64
SECTION 6.09 Rights and Remedies Cumulative . . . . . . . . . . . 64
SECTION 6.10 Delay or Omission Not Waiver . . . . . . . . . . . . 64
SECTION 6.11 Control by Holders . . . . . . . . . . . . . . . . . 64
SECTION 6.12 Waiver of Past Defaults . . . . . . . . . . . . . . 65
SECTION 6.13 Waiver of Stay or Extension Laws . . . . . . . . . . 65
SECTION 6.14 Undertaking for Costs . . . . . . . . . . . . . . . 66
SECTION 6.15 Judgment Currency . . . . . . . . . . . . . . . . . 66
ARTICLE VII
THE TRUSTEE
SECTION 7.01 Certain Rights of Trustee . . . . . . . . . . . . . 67
SECTION 7.02 Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . . . 69
SECTION 7.03 May Hold Securities . . . . . . . . . . . . . . . . 69
SECTION 7.04 Money Held in Trust . . . . . . . . . . . . . . . . 70
SECTION 7.05 Compensation and Reimbursement . . . . . . . . . . . 70
SECTION 7.06 Resignation and Removal; Appointment of Successor . 71
SECTION 7.07 Acceptance of Appointment by Successor . . . . . . . 72
SECTION 7.08 Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . . 74
SECTION 7.09 Reports by Trustee . . . . . . . . . . . . . . . . . 74
SECTION 7.10 Corporate Trustee Required; Eligibility . . . . . . 74
SECTION 7.11 Notice of Events of Default . . . . . . . . . . . . 75
SECTION 7.12 Disqualification; Conflicting Interests . . . . . . 75
ARTICLE VIII
CONSOLIDATION, MERGER OR SALE
SECTION 8.01 Consolidation, Merger or Sale . . . . . . . . . . . 75
SECTION 8.02 Successor Corporation to Be Substituted . . . . . . 76
SECTION 8.03 Securities to Be Secured in Certain Events . . . . . 77
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 Supplemental Indentures without Consent of Holders . 77
SECTION 9.02 Supplemental Indentures with Consent of Holders . . 79
SECTION 9.03 Execution of Supplemental Indentures . . . . . . . . 81
SECTION 9.04 Effect of Supplemental Indentures . . . . . . . . . 81
SECTION 9.05 Conformity with Trust Indenture Act . . . . . . . . 81
SECTION 9.06 Reference in Securities to Supplemental Indentures . 81
ARTICLE X
COVENANTS
SECTION 10.01 Payment of Principal, Premium and Interest . . . . 82
SECTION 10.02 Maintenance of Office or Agency. . . . . . . . . . 82
SECTION 10.03 Money for Securities Payments to Be Held in Trust . 84
SECTION 10.04 Maintenance of Properties and Corporate Existence . 85
SECTION 10.05 Statements as to Compliance . . . . . . . . . . . . 86
SECTION 10.06 Commission Reports . . . . . . . . . . . . . . . . 86
SECTION 10.07 Waiver of Covenant . . . . . . . . . . . . . . . . 86
SECTION 10.08 Additional Instruments and Acts . . . . . . . . . . 87
SECTION 10.09 Restriction on Creation of Liens . . . . . . . . . 87
SECTION 10.10 Restrictions on Sale and Leaseback Transactions. . 89
SECTION 10.11 Names and Addresses of Holders. . . . . . . . . . . 89
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.01 Applicability of Article . . . . . . . . . . . . . 90
SECTION 11.02 Election to Redeem; Notice to Trustee . . . . . . . 90
SECTION 11.03 Selection by Trustee of Securities to Be Redeemed . 90
SECTION 11.04 Notice of Redemption . . . . . . . . . . . . . . . 91
SECTION 11.05 Deposit of Redemption Price . . . . . . . . . . . . 92
SECTION 11.06 Securities Payable on Redemption Date . . . . . . . 92
SECTION 11.07 Securities Redeemed in Part . . . . . . . . . . . . 93
ARTICLE XII
SINKING FUNDS
SECTION 12.01 Applicability of Article . . . . . . . . . . . . . 94
SECTION 12.02 Satisfaction of Sinking Fund Payments with
Securities . . . . . . . . . . . . . . . . . . . 94
SECTION 12.03 Redemption of Securities for Sinking Fund . . . . . 94
INDENTURE, dated as of [ ], between HASBRO,
INC., a corporation duly organized and existing under the laws of the State
of Rhode Island (herein called the "Company"), having its principal office
at Pawtucket, Rhode Island, and [ ] (herein
called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its
unsecured senior debentures, notes or other evidences of indebtedness
(herein called the "Securities"), to be issued in one or more series as in
this Indenture provided.
All things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities or
of any series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01 Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles as in effect on June 1, 1998 or, as to any
computation required or permitted pursuant to, and relating to any
covenant of the Company contained in, any Board Resolution, Officers'
Certificate or executed supplemental indenture establishing any series
of Securities, such computation shall be made and such covenant shall
be construed in accordance with generally accepted accounting
principles as are generally accepted at the date of such Board
Resolution, Officers' Certificate or executed supplemental indenture
(unless otherwise provided therein or except as otherwise provided
herein or in any further Board Resolution, Officers' Certificate or
executed supplemental indenture); and
(4) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Four, are defined in
that Article.
"Act," when used with respect to any Holder, has the meaning
specified in Section 1.04.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Attributable Debt" in respect of a Sale and Leaseback
Transaction means, as of any particular time, the present value (discounted
at the rate of interest implicit in the terms of the lease involved in such
Sale and Leaseback Transaction, as determined in good faith by the Board of
Directors) of the obligation of the lessee thereunder for rental payments
(excluding, however, any amounts required to be paid by such lessee,
whether or not designated as rent or additional rent, on account of
maintenance and repairs, insurance, taxes, assessments, water rates or
similar charges or any amounts required to be paid by such lessee
thereunder contingent upon the amount of sales, maintenance and repairs,
insurance, taxes, assessments, water rates or similar charges) during the
remaining term of such lease (including any period for which such lease has
been extended or may, at the option of the lessor, be extended).
"Authorized Newspaper" means a newspaper of general circulation
in the place of publication (which, in the case of the City of New York,
will, if practicable, be The Wall Street Journal (Eastern Edition), in the
case of the United Kingdom, will, if practicable, be The Financial Times
(London Edition) and, in the case of Luxembourg, will, if practicable, be
the Luxembourg Wort), printed in the official language of the country of
publication and customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays. Whenever successive weekly
publications in an Authorized Newspaper are authorized or required
hereunder, they may be made (unless otherwise expressly provided herein) on
the same or different days of the week and in the same or different
Authorized Newspapers. If it shall be impractical, in the opinion of the
Trustee, to make any publication of any notice required hereby in an
Authorized Newspaper, any publication or other notice in lieu thereof which
is made or given with the approval of the Trustee shall constitute a
sufficient publication of such notice.
"Bearer Security" means any Security in the form of bearer
securities established pursuant to Section 2.01 which is payable to bearer
and is not a Registered Security.
"Board of Directors" means either the Board of Directors of the
Company, the executive committee of the Board of Directors or any other
duly authorized committee of the Board of Directors.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Book-Entry Security" means a security evidencing all or part of
a series of Securities, issued to the Depositary for such series of
Securities in accordance with Section 3.03, and bearing the legend
prescribed in Section 3.03.
"Business Day," when used with respect to any Place of Payment or
other location, means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in that Place of Payment
or other location are authorized or obligated by law to close.
"Capital Lease" means any lease obligation of a Person incurred
with respect to assets acquired or leased by such Person which is required
to be capitalized in accordance with generally accepted accounting
principles. A Capital Lease shall be deemed incurred at the time a binding
commitment to lease the subject asset shall become effective.
"Capital Lease Obligation" means Indebtedness represented by
obligations under a Capital Lease.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, as amended, or, if at any time after the execution of this instrument
such Commission is not existing and performing the duties now assigned to
it under the Trust Indenture Act, than the body performing such duties at
such time.
"Common Stock" means the common stock, par value $.50 per share,
of the Company, as authorized on the date of the execution of this
instrument or as such common stock may be constituted in one or more
classes from time to time thereafter.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman, its President, its Chief Financial Officer, or an Executive
Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means, as determined at any
time, the aggregate amount of assets included on a consolidated balance
sheet of the Company and its Subsidiaries, less applicable reserves and
after deducting therefrom (a) all current liabilities of the Company and
its Subsidiaries and (b) the total of the net book values of all assets of
the Company and its Subsidiaries properly classified as intangible assets
under generally accepted accounting principles, in each case as of the end
of the last fiscal quarter for which financial information is available at
the time of such calculation.
"Conversion Agent" shall have the meaning set forth in Section
10.02.
"Conversion Price" shall have the meaning set forth in Section
4.01.
"Convertible Securities" means Securities designated as
convertible into Common Stock or cash in lieu thereof (in accordance with
Article Four) pursuant to Section 3.01.
"Corporate Trust Office" means the office of the Trustee at which
at any particular time its corporate trust business shall be administered
except that with respect to the presentation of Securities for payment or
for registration of transfer or exchange, such term shall mean the office
or agency of the Trustee in the Borough of Manhattan, the City of New York
at which at any particular time its corporate trust business shall also be
conducted.
"Coupon" means any interest coupon appertaining to any Security.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in global form, including Book-Entry
Securities, the Person designated as Depositary by the Company pursuant to
Section 3.01 until a successor Depositary shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Depositary"
shall mean or include each Person who is then a Depositary hereunder, and
if at any time there is more than one such person "Depositary" shall mean
or include each Person who is then a Depositary hereunder, and if at any
time there is more than one such person "Depositary" shall be a collective
reference to such Persons. "Depositary" as used with respect to the debt
securities of any such series shall mean the Depositary with respect to the
debt securities of that series.
"Dollar" means the coin or currency of the United States as at
the time of payment is legal tender for the payment of public and private
debts.
"ECU" means the European Currency Unit as defined and revised
from time to time by the Council of the European Communities.
"Event of Default" has the meaning specified in Section 6.01.
"Ex-Dividend Time" means the time immediately prior to the
commencement of "ex-dividend" trading for the Common Stock on the American
Stock Exchange or such other national or regional exchange or market on
which the Common Stock is then listed or quoted.
"Extraordinary Cash Dividend" means any cash dividend with
respect to the Common Stock the amount of which, together with the
aggregate amount of cash dividends on the Common Stock to be aggregated
with such cash dividend in accordance with the provisions of this
paragraph, equals or exceeds the threshold percentages set forth below:
If, upon the date prior to the Ex-Dividend Time with respect
to a cash dividend on the Common Stock, the aggregate amount of
such cash dividend together with the amounts of all cash
dividends on the Common Stock with Ex-Dividend Time occurring in
the 365 consecutive day period ending on the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied equals or exceeds on a per share basis
25 percent of the average of the Sale Prices during the period
beginning on the date after the first such Ex-Dividend Time in
such period and ending on the date prior to the Ex-Dividend Time
with respect to the cash dividend to which this provision is
being applied (except that if no other cash dividend has had an
Ex-Dividend Time occurring in such period, the period for
calculating the average of the Sale Prices shall be the period
commencing 365 days prior to the date prior to the Ex-Dividend
Time with respect to the cash dividend to which this provision is
being applied), such cash dividend together with each other cash
dividend with an Ex-Dividend Time occurring in such 365-day
period shall be deemed to be an Extraordinary Cash Dividend. In
determining the amount of Extraordinary Cash Dividends for
purposes of making adjustments required by Section 4.04, no
adjustment shall be made for cash dividends for which a prior
adjustment in the Conversion Rate was previously made.
"Foreign Currency" means a currency issued by the government of
any country other than the United States.
"Funded Debt" means all indebtedness which by its terms matures
more than 12 months after the time of the computation of the amount thereof
or which is extendible or renewable at the option of the obligor on such
indebtedness to a time more than 12 months after the time of the
computation of the amount thereof or which is classified, in accordance
with generally accepted accounting principles, on a corporation's balance
sheet as long-term debt.
"Holder" means, with respect to a Registered Security, a Person
in whose name a Security is registered in the Security Register and, with
respect to a Bearer Security (or any temporary global Security), and/or
Coupons, the bearer thereof.
"Indebtedness" means (a) any liability of any Person (i) for
borrowed money, (ii) evidenced by a note, debenture or similar instrument
(including an obligation with or without recourse) issued in connection
with the acquisition (whether by way of purchase, merger, consolidation or
otherwise) of any business, real property or other assets (other than
inventory or similar property acquired in the ordinary course of business)
or (iii) for the payment of money relating to a Capital Lease Obligation;
(b) any liability of others described in the preceding clause (a) which the
Person has guaranteed or which is otherwise its legal liability and (c) any
amendment, renewal, extension or refunding of any such liability.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof and shall include the terms of particular series of Securities
established as contemplated by Section 3.01.
"interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date," when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"Maturity," when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration, call for redemption,
mandatory repurchase or otherwise.
"New York Business Day" means each weekday which is not a day on
which banking institutions in the City of New York are authorized or
obligated by law to close.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Vice Chairman, the President, or an Executive
Vice President, and by the Controller, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Company, and who shall be reasonably acceptable to the
Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 6.02.
"Outstanding," when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption (a) money
in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities as contemplated by Section
5.01 or (b) U.S. Government Obligations or Foreign Government Securities as
contemplated by and defined in Section 5.03 in the necessary amount have
been theretofore deposited with the Trustee in trust for the holders of
such Securities in accordance with Section 5.03; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provisions therefor satisfactory to the
Trustee has been made; and
(iii) Securities which have been paid pursuant to Section
3.06 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of any Original Issue Discount Securities that shall be
deemed to be Outstanding for such purposes shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the maturity thereof
pursuant to Section 6.02, the principal amount of a Security denominated in
a Foreign Currency or Currencies shall be deemed to be that amount of
Dollars that could be obtained for such principal amount on the basis of
the spot rate of exchange for such Foreign Currency or such currency unit
as determined by the Company or by an authorized exchange rate agent, and
Securities owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which
a Responsible Officer of the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other
obligor.
"Paying Agent" means any Person authorized by the Company to pay
the principal of (and premium, if any) or interest on any Securities on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of
any series, means the place or places where the principal of (and premium,
if any) and interest on the Securities of that series are payable as
specified as contemplated by Section 3.01.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.06 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Security.
"Principal Property" means any real property, any manufacturing
plant, warehouse, office building or other physical facility or other like
depreciable physical asset of the Company or of any Subsidiary whether
owned on the date hereof or hereafter acquired having a net book value at
the time of determination in excess of the greater of five percent of
Consolidated Net Tangible Assets or $50 million, other than, in each case,
any of the same which in the good faith opinion of the Board of Directors
is not of material importance to the total business conducted by the
Company and its Subsidiaries, as a whole.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" means any Security in the form of
Registered Securities established pursuant to Section 2.01 which is
registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for
that purpose as contemplated by Section 3.01.
"Required Currency" has the meaning specified in Section 1.14.
"Responsible Officer," when used with respect to the Trustee,
means any officer in the corporate trust administration division of the
Trustee or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Sale and Leaseback Transaction" means any arrangement with any
Person providing for the leasing or use by the Company or any Subsidiary of
any Principal Property, whether owned at the date of this Indenture or
thereafter acquired (except for temporary leases of a term, including any
renewal period, of not more than three years), which Principal Property has
been or is to be sold or transferred by the Company or a Subsidiary to a
Person with an intention of taking back a lease of such Property.
"Sale Price" means, for any given day, the last reported per
share sale price (or, if no 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 such day of the Common Stock on the
American Stock Exchange or, in the event shares of common Stock are not
listed on the American Stock Exchange, such other national or regional
securities exchange upon which the Common Stock is listed, or, if the
shares of Common Stock are not listed on a national or regional securities
exchange, as quoted on the National Association of Securities Dealers
Automated Quotation System or by the National Quotation Bureau
Incorporated. In the absence of one or more such quotations specified in
the definition of Sale Price, the Company shall determine such price on the
basis of such quotations as it deems appropriate.
"Secured Debt" means indebtedness for money borrowed by the
Company or its Subsidiaries (other than indebtedness owed by a Subsidiary
to the Company, by a Subsidiary to another Subsidiary or by the Company to
a Subsidiary), which in any case is secured, whether by operation of law or
otherwise, by a mortgage, security interest, pledge, lien or other
encumbrance on Principal Property or on any shares of stock or evidences of
indebtedness of a Subsidiary. If any amount of such indebtedness described
in the parenthetical in the preceding sentence and held by the Company or a
Subsidiary is transferred in any manner to any Person other than the
Company or a Subsidiary, such amount shall be deemed to be Secured Debt
issued on the date of transfer.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.05.
"Significant Subsidiary" shall have the meaning ascribed to such
term in Rule 1-02 of Regulation S-X of the Commission, as in effect on
June 1, 1998.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity," when used with respect to any Security or
Coupon or any installment of principal thereof or interest thereon, means
the date specified in such Security as the fixed date on which the
principal of such Security or Coupon or such installment of principal or
interest is due and payable.
"Subsidiary" means any corporation of which the Company, or the
Company and one or more Subsidiaries, or any one or more Subsidiaries,
directly or indirectly own a majority (by number of votes) of the
outstanding voting securities having voting power under ordinary
circumstances to elect the directors of such corporation.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each person who is then a
Trustee hereunder and, if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean
the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed,
except as provided in Section 9.05.
"Vice President," when used with respect to the Company, means
any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
SECTION 1.02 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such application or
request as to which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary
that all such matters be certified by, or covered by the opinion of, only
one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect
to some matters and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 1.04 Acts of Holders.
(1) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one ore more
instruments of substantially similar tenor signed by such holders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to a Responsible Officer of the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 7.01) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(2) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(3) The principal amount and serial numbers of Bearer Securities
held by any Person, and the date of his holding the same, may be proved by
the production of such Bearer Securities or by a certificate executed by
any trust company, bank, banker or other depositary, wherever situated, if
such certificate shall be deemed by the Trustee to be satisfactory, showing
that at the date therein mentioned such Person had on deposit with such
depositary, or exhibited to it, the Bearer Securities therein described; or
such facts may be proved by the certificate or affidavit of the Person
holding such Bearer Securities, if such certificate or affidavit is deemed
by the Trustee to be satisfactory. The Trustee and the Company may assume
that such ownership of any Bearer Security continues until (i) another
certificate or affidavit bearing a later date issued in respect of the same
Bearer Security is produced, (ii) such Bearer Security is produced to the
Trustee by some other Person, (iii) such Bearer Security is surrendered in
exchange for a Registered Security or (iv) such Bearer Security is no
longer Outstanding.
(4) The fact and date of execution of any such instrument or
writing pursuant to clause (c) above, the authority of the Person executing
the same and the principal amount and serial numbers of Bearer Securities
held by the Person so executing such instrument or writing and the date of
holding the same may also be proved in any other reasonable manner which
the Trustee deems sufficient; and the Trustee may in any instance require
further proof with respect to any of the matters referred to in this
clause.
(5) The ownership of Registered Securities shall be proved by
the Security Register.
(6) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the holder of every Security issued
upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or not notation of
such action is made upon such Security.
(7) Whenever for purposes of any Act to be taken hereunder by
the Holders of a series of Securities denominated in a Foreign Currency (or
any currency unit), the principal amount of Securities is required to be
determined, the aggregate principal amount of such Securities shall be
deemed to be that amount of Dollars that could be obtained for such
principal amount on the basis of the spot rate of exchange for such Foreign
Currency or such currency unit as determined by the Company or by an
authorized exchange rate agent and evidenced to the Trustee by an Officers'
Certificate as of the date taking of such Act by the Holders of the
requisite percentage in principal amount of the Securities is evidenced to
the Trustee. An exchange rate agent may be authorized in advance or from
time to time by the Company, and may be the Trustee or its Affiliate. Any
such determination by the Company or by any such exchange rate agent shall
be conclusive and binding on all Holders, the Company and the Trustee, and
neither the Company nor any such exchange rate agent shall be liable
therefor in the absence of bad faith. The Trustee, unless it is serving as
exchange rate agent, shall have no duty to determine or confirm such
calculation, and may conclusively rely on the aforementioned Officers'
Certificate.
(8) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give
such request, waiver or other Act, but the Company shall have no obligation
to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as
of such record date; provided that no such authorization, agreement or
consent by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not
later than six months after the record date.
SECTION 1.05 Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Company addressed to it at 1027 Newport Avenue, Pawtucket, Rhode Island
02861 or at any other address previously furnished in writing to the
Trustee by the Company.
SECTION 1.06 Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
(i) if any of the Securities affected by such event are Registered
Securities, such notice to the Holders thereof shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, at such Holder's address as it appears in the
Security Register, within the time prescribed for the giving of such notice
and (ii) if any of the Securities affected by such event are Bearer
Securities, notice to the Holders thereof shall be sufficiently given
(unless otherwise herein or in the terms of such Bearer Securities
expressly provided) if published once in an Authorized Newspaper in the
Borough of Manhattan, the City of New York, New York, and in such other
city or cities, if any, as may be specified in such Securities and, if the
Securities of such series are listed on any stock exchange outside the
United States, in any place at which such Securities are listed on a
securities exchange to the extent that such securities exchange so
requires, and mailed to such Persons whose names and addresses were
previously filed with the Trustee, within the time prescribed for giving
such notice. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to
any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. If it is impossible, or in the opinion of the
Trustee, impracticable to give any notice by publication in the manner
herein required, then such publication in lieu thereof as shall be made
with the approval of the Trustee shall constitute a sufficient publication
of such notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice as
provided above, then such notification as shall be made with the approval
of the Trustee shall constitute a sufficient notification for every purpose
hereunder.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
SECTION 1.07 Conflict with Trust Indenture Act.
This Indenture is subject to the Trust Indenture Act and if any
provision hereof limits, qualifies or conflicts with another provision
which is required or deemed to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such required or deemed provision
shall control.
SECTION 1.08 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.09 Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 1.10 Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 1.11 Benefits of Indenture.
Nothing in this Indenture or in the Securities, expressed or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.12 Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 1.13 Moneys of Different Currencies to Be Segregated.
The Trustee shall segregate moneys, funds, and accounts held by
the Trustee hereunder in one currency (or unit thereof) for any moneys,
funds or accounts in any other currencies (or units thereof),
notwithstanding any provision herein which would otherwise permit the
Trustee to commingle such amounts.
SECTION 1.14 Payment to Be in Proper Currency.
The following provisions of this Section 1.14 shall apply to the
extent permitted by applicable law: In the case of any Security payable in
any particular currency or currency unit (the "Required Currency"), except
as otherwise provided herein, therein or in or pursuant to the related
Board Resolution or supplemental indenture or as contemplated by Section
3.01, the obligation of the Company to make any payment of principal,
premium or interest thereon shall not be discharged or satisfied by any
tender by the Company, or recovery by the Trustee, in any currency or
currency unit other than the Required Currency, except to the extent that
such tender or recovery shall result in the Trustee timely holding the full
amount of the Required Currency then due and payable. If any such tender
or recovery is made in other than the Required Currency, the Trustee may,
but shall not be obligated to, take such actions as it considers
appropriate to exchange such other currency or currency unit for the
Required Currency. The costs and risks of any such exchange, including
without limitation the risks of delay and exchange rate fluctuation, shall
be borne by the Company, the Company shall remain fully liable for any
shortfall or delinquency in the full amount of the Required Currency then
due and payable and in no circumstances shall the Trustee be liable
therefor. The Company hereby waives any defense of payment based upon any
such tender or recovery which is not in the Required Currency, or which,
when exchanged for the Required Currency by the Trustee, is less than the
full amount of Required Currency then due and payable.
SECTION 1.15 Counterparts.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 1.16 Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
repurchase date or Maturity of any Security or any date on which any
Defaulted Interest is proposed to be paid shall not be a Business Day at
any Place of Payment, then (notwithstanding any other provision of this
Indenture or the Securities) payment of interest or principal (and premium,
if any) need not be made at such Place of Payment on such date, but may be
made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the nominal date of such Interest
Payment Date or Redemption Date, Maturity, or on the date on which
Defaulted Interest is proposed to be paid, and no interest shall accrue for
the period from and after such Interest Payment Date, Redemption Date,
repurchase date, Maturity or date on which Defaulted Interest is proposed
to be paid, as the case may be.
ARTICLE II
SECURITY FORMS
SECTION 2.01 Forms Generally.
The Securities of each series and the Coupons, if any, to be
attached thereto shall be in substantially such form as shall be
established pursuant to Section 3.01 by or pursuant to one or more Board
Resolutions or Officers' Certificates or in one or more indentures
supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted
by this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such
Securities and Coupons, if any, as evidenced by their execution of the
Securities and Coupons, if any. If temporary Securities of any series are
issued in global form as permitted by Section 3.04, the form thereof also
shall be established as provided in the preceding sentence. If the form of
Securities and Coupons, if any, of any series are established by, or by
action taken pursuant to, a Board Resolution, a copy of the Board
Resolution together with an appropriate record of any such action taken
pursuant thereto, including a copy of the approved form of Securities or
Coupons, if any, shall be certified by the Secretary or any Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Company Order contemplated by Section 3.03 for the
authentication and delivery of such Securities.
The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in
any other manner, all as determined by the officers executing such
Securities and Coupons, if any, as evidenced by their execution of such
Securities and Coupons, if any.
SECTION 2.02 Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
"This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
[ ],
as Trustee
By ___________________________
as Authorized Signatory"
SECTION 2.03 Securities in Global Form.
If Securities of a series are issuable in whole or in part in
global form, any such Security may provide that it shall represent the
aggregate or specified amount of Outstanding Securities from time to time
endorsed thereon and may also provide that the aggregate amount of
Outstanding Securities represented thereby may from time to time be reduced
to reflect exchanges. Any endorsement of a Security in global form to
reflect the amount, or any increase or decrease in the amount, of
Outstanding Securities represented thereby, shall be made in such manner
and by such Person or Persons as shall be specified therein or in the
Company Request to be delivered to the Trustee pursuant to Section 3.03 or
Section 3.04.
Notwithstanding the provisions of Sections 2.01 and 3.07, unless
otherwise specified as contemplated by Section 3.01, payment of principal
of and any premium and interest on any Security in permanent global form
shall be made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.08 and except as
provided in the preceding paragraph, the Company, the Trustee and any agent
of the Company and the Trustee shall treat a Person as the Holder of such
principal amount of Outstanding Securities represented by a permanent
global Security as shall be specified in a written statement of the Holder
of such permanent global Security.
Any instructions by the Company with respect to a Security in
global form shall be in writing but need not comply with Section 3.14(c) of
the Trust Indenture Act.
ARTICLE III
THE SECURITIES
SECTION 3.01 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall
be established in or pursuant to a Board Resolution, and set forth, or
determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the
issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Sections 3.04,
3.05, 3.06, 9.06 or 11.07);
(3) whether the Securities of the series are convertible
into Common Stock, or cash in lieu thereof, and, if so, the terms and
conditions upon which such conversion will be effected, including the
initial conversion price or conversion rate and other conversion
provisions;
(4) the date or dates on which the principal (and premium,
if any) of the Securities of the series is payable and/or the method
by which such date or dates shall be determined;
(5) the rate or rates at which the Securities of the
series shall bear interest, if any, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which such
interest shall be payable and, in the case of Registered Securities,
the Regular Record Date for the interest payable on any Interest
Payment Date, and/or the method by which rate or rates or date or
dates shall be determined;
(6) the Person to whom any interest on any Registered
Securities of the series shall be payable if other than the Person in
whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for
such interest and the manner in which, or the Person to whom, any
interest on any Bearer Securities of the series shall be payable if
otherwise than upon presentation and surrender of the Coupons
appertaining thereto as they severally mature;
(7) the place or places where the principal of (and
premium, if any) and interest on the Securities of the series shall be
payable and the place or places where the Securities of the series may
be presented for transfer and, if applicable, conversion;
(8) the period or periods within which or the date or
dates on which, the price or prices at which and the terms and
conditions upon which Securities of the series may be redeemed, in
whole or in part, at the option of the Company, pursuant to any
sinking fund or otherwise;
(9) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the
terms and conditions upon which securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation and/or the method by which such period or periods, price or
prices and terms and conditions shall be determined;
(10) if other than denominations of $1,000 and any
integral multiple thereof in the case of Registered Securities or
$5,000 and any integral multiple thereof in the case of Bearer
Securities, the denominations in which Securities of the series shall
be issuable;
(11) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 6.02 or the method by which such portion
shall be determined;
(12) whether Securities of the series will be issuable as
Registered Securities, Bearer Securities or both, and the terms upon
which Bearer Securities of the series may be exchanged for Registered
Securities of the series;
(13) the date as of which any Bearer Securities of the
series and any temporary global Security representing Outstanding
Securities of the series shall be dated if other than the original
issuance of the first Security of the series to be issued;
(14) if Bearer Securities of the series are to be
issuable, whether interest in respect of any portion of a temporary
Bearer Security in global form (representing all of the Outstanding
Bearer Securities of the series) payable in respect of any Interest
Payment Date prior to the exchange of such temporary Bearer Security
for definitive Securities of the series shall be paid to any clearing
organization with respect to the portion of such temporary Bearer
Security held for its account and, in such event, the terms and
conditions (including any certification requirements) upon which any
such interest payment received by a clearing organization will be
credited to the Persons entitled to interest payable on such Interest
Payment Date;
(15) the currency of denomination of the Securities of the
series, the currency or currencies in which payment of the principal
of (and premium, if any) and interest on the Securities of the series
will be made, and the currency or currencies (in addition to Dollars),
if any, in which payment of the principal of (and premium, if any) or
the interest on Registered Securities, at the election of each of the
Holders thereof, may also be payable which currencies may be in
Dollars, any Foreign Currency or any composite currency, including but
not limited to the ECU, and, if any such currency of denomination is a
composite currency other than the ECU, the agency or organization, if
any, responsible for overseeing such composite currency;
(16) if the amount of payments of principal of (and
premium, if any) or interest on the Securities of the series may be
determined with reference to an index based on a currency or
currencies other than that in which the Securities of the series are
denominated or designated to be payable, the manner in which such
amounts shall be determined;
(17) if the payments of principal of (and premium, if any)
or the interest on the Securities of the series are to be made in a
Foreign Currency other than the Foreign Currency in which such
Securities are denominated, the manner in which the exchange rate with
respect to such payments shall be determined;
(18) any deletions from, modifications of or additions to
the Events of Default set forth in Section 6.01 or covenants of the
Company set forth in Articles Eight or Ten pertaining to the
Securities of the series;
(19) the form of the Securities and Coupons, if any, of
the series;
(20) whether the Securities of such series shall be issued
in whole or in part in global form, including Book-Entry Securities,
and the Depositary for such global Securities;
(21) any Depositaries or paying agents, transfer agents,
registrars or other agents with respect to the Securities of the
series;
(22) the application, if any, of Section 5.03;
(23) any other terms of the series (which shall not be
inconsistent with the provisions of this Indenture); and
(24) the applicability of the seventh paragraph of Section
3.05.
All Securities (including Coupons, if any) of any one series
shall be substantially identical except as to denomination and except as
may otherwise be provided in or pursuant to such Board Resolution, such
Officers' Certificate or any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
SECTION 3.02 Denominations.
The Securities of each series shall be issuable in such
denominations as shall be specified as contemplated by Section 3.01. In
the absence of any such provisions with respect to the Securities of any
series, the Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof in the case of Registered
Securities or in denominations of $5,000 and any integral multiple thereof
in the case of Bearer Securities.
SECTION 3.03 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman, its President, its Chief
Financial Officer or one of its Executive Vice Presidents, under its
corporate seal reproduced thereon attested by the signature of its
Secretary or one of its Assistant Secretaries or its Treasurer or one of
its Assistant Treasurers. The Coupons, if any, shall be executed on behalf
of the Company by its Chairman of the Board, its Vice Chairman, its
President, its Chief Financial Officer or one of its Executive Vice
Presidents attested by its Secretary or any Assistant Secretary or its
Treasurer or one of its Assistant Treasurers. The signature of any of
these officers on the Securities (and Coupons, if any) may be manual or
facsimile.
Securities (and Coupons, if any) bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication
and delivery of such Securities (and Coupons, if any) or did not hold such
offices at the date of such Securities (and Coupons, if any).
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities (with or
without Coupons) of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. If the form or
terms of the Securities of the series have been established in or pursuant
to one or more Board Resolutions as permitted by Sections 2.01 and 3.01, in
authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and shall be fully protected in
relying upon any of the following:
(1) a Company Request;
(2) any Board Resolution, Officers' Certificate and/or
executed supplemental indenture referred to in Sections 2.01 or 3.01 by or
pursuant to which the form or forms and the terms of the Securities of such
series and the Coupons, if any, appertaining thereto were established;
(3) an Officers' Certificate either setting forth the form
or forms and the terms of the Securities of such series and the Coupons, if
any, appertaining thereto or stating that such form or forms and terms have
been established pursuant to Sections 2.01 or 3.01 and comply with this
Indenture, and covering such other matters as the Trustee may reasonably
request; and
(4) at the option of the Company, either an Opinion of
Counsel, or a letter addressed to the Trustee permitting it to rely on an
Opinion of Counsel, substantially to the effect that:
(a) if established pursuant to a Board Resolution as
permitted by Section 2.01, the form of such Securities and Coupons, if
any, have been established in conformity with the provisions of this
Indenture;
(b) if established pursuant to a Board Resolution as
permitted by Section 3.01, the terms of such Securities and Coupons, if
any, have been established in conformity with the provisions of this
Indenture; and
(c) such Securities and Coupons, if any, when
authenticated and delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion of Counsel,
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting the enforcement of creditors' rights and to general equity
principles.
The Trustee shall have the right to decline to authenticate and
deliver such Securities if the Trustee determines or is advised by counsel
that such action may not lawfully be taken or if the Trustee in good faith
by its board of directors or trustees, executive committee, or a trust
committee of directors or trustees and/or Responsible Officers shall
determine that such action would expose the Trustee to personal liability
to existing Holders or would adversely affect the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
The Trustee shall not be required to authenticate Securities
denominated in a coin or currency (or unit including a coin or currency)
other than that of the United States if the Trustee reasonably determines
that such Securities impose duties or obligations on the Trustee which the
Trustee is not able or reasonably willing to accept; provided that the
Trustee, upon a Company Request, will resign as Trustee with respect to
Securities of any series as to which such a determination is made, prior to
the issuance of such Securities, and will comply with the request of the
Company to execute and deliver a supplemental indenture appointing a
successor Trustee pursuant to Section 9.01.
If all of the Securities of a series are not to be originally
issued at the same time, then the documents required to be delivered
pursuant to this Section 3.03 must be delivered only once, prior to the
authentication and delivery of the first Security of such series; provided,
however, that any subsequent request by the Company to the Trustee to
authenticate Securities of such series upon original issuance shall
constitute a representation and warranty by the Company that, as of the
date of such request, the statements made in the Opinion of Counsel
delivered pursuant to this Section 3.03 shall be true and correct as if
made on such date.
If the Company shall establish pursuant to Section 3.01 that the
Securities of a series are to be issued in whole or in part in global form,
then the Company shall execute and the Trustee shall, in accordance with
this Section and the Company Order with respect to such series,
authenticate and deliver one or more securities in global form that (i)
shall represent and shall be denominated in an amount equal to the
aggregate principal amount of the Outstanding Securities of such series to
be represented by such global Security or Securities, (ii) shall be
registered, if in registered form, in the name of the Depositary for such
Book-Entry Security or Securities or the nominee of such Depositary, (iii)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instruction and (iv) shall bear a legend substantially to the
following effect: "Unless and until it is exchanged in whole or in part
for Securities in certificated form, this Security may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary" or to such other
effect as the Depositary and the Trustee may agree.
Each Depositary designated pursuant to Section 3.01 for a Book-
Entry Security in registered form must, at the time of its designation and
at all times while it serves as Depositary, be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, and any other
applicable statute or regulation. The Trustee shall have no responsibility
to determine if the Depositary is so registered. Each Depositary shall
enter into an agreement with the Trustee governing their respective duties
and rights with regard to Book-Entry Securities.
Each Security shall be dated the date of its authentication,
except that each Bearer Security, including any Bearer Security in global
form, shall be dated as of the date specified as contemplated by Section
3.01.
No Security or Coupon appertaining thereto shall be entitled to
any benefit under this Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee
by manual signature of one of its authorized officers, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that
such Security has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture. Except as permitted by
Sections 3.06 or 3.07, the Trustee shall not authenticate and deliver any
Bearer Security unless all appurtenant coupons for interest then matured
have been detached and cancelled.
SECTION 3.04 Temporary Securities.
Pending the preparation of definitive Securities of any series,
the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor and form, with or
without Coupons of the definitive Securities in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine,
as conclusively evidenced by their execution of such Securities and
Coupons, if any. Every temporary Security of any series shall be executed
by the Company and authenticated by the Trustee upon the same conditions
and in substantially the same manner, and with like effect, as the
definitive Securities of such series.
Except in the case of temporary Securities in global form, each
of which shall be exchanged in accordance with the provisions thereof, if
temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of
such series at the office or agency of the Company pursuant to Section
10.02 in a Place of Payment for such series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of
any series (accompanied by any unmatured Coupons appertaining thereto), the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Securities of the
same series of authorized denominations and of like tenor; provided,
however, that no definitive Bearer Security shall be delivered in exchange
for a temporary Registered Security; and provided, further, that no
definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security unless the Trustee shall have received from the person
entitled to receive the definitive Bearer Security a certificate
substantially in the form approved in the Board Resolutions relating
thereto and such delivery shall occur only outside the United States.
Until so exchanged, the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as
definitive Securities of such series except as otherwise specified as
contemplated by Section 3.01 with respect to the payment of interest on
Bearer Securities in temporary form.
SECTION 3.05 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office
of the Trustee, for each series of Securities issuable as Registered
Securities, a register (the register maintained in such office and in any
other office or agency of the Company maintained pursuant to Section 10.02
in a Place of Payment being herein sometimes collectively referred to as
the "Security Register") in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration of
Registered Securities of such series and of transfers of Registered
Securities of such series. Said office or agency is hereby appointed
"Security Registrar" for the purpose of registering Registered Securities
and transfers of Registered Securities as herein provided.
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency maintained pursuant to
Section 10.02 in a Place of Payment for that series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount.
Notwithstanding any other provision of this Section, unless and
until it is exchanged in whole or in part for Securities in certificated
form, a Security in global form representing all or a portion of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such Depositary
or by such Depositary or any such nominee to a successor Depositary for
such series or a nominee of such successor Depositary.
If at any time the Depositary for the Securities of a series
notifies the Company that it is unwilling or unable to continue as
Depositary for the Securities of such series or if at any time the
Depositary for the Securities of such series shall no longer be eligible
under Section 3.03, the Company shall appoint a successor Depositary with
respect to the Securities of such series. If a successor Depositary for
the Securities of such series is not appointed by the Company within 90
days after the issuer receives such notice or becomes aware of such
ineligibility, the Company's election pursuant to Section 3.01(21) shall no
longer be effective with respect to the Securities of such series and the
Company shall execute, and the Trustee, upon receipt of a Company Order for
the authentication and delivery of certificated Securities of such series
of like tenor, shall authenticate and deliver Securities of such series in
certificated form in an aggregate principal amount equal to the principal
amount of the Security or Securities in global form representing such
series in exchange for such Security or Securities in global form.
Within 14 days after the occurrence of an Event of Default
specified in clause (1), (2) or (3) of Section 6.01 with respect to any
series of the Securities if so specified pursuant to Section 3.01, the
Company shall execute, and the Trustee upon receipt of a Company Order
shall authenticate and deliver, in exchange for any Security of such series
in global form, Securities of such series in certificated form in
authorized denominations for an aggregate principal amount equal to the
principal amount of such Security in global form.
The Company may at any time and in its sole discretion determine
that the Securities of any series issued in the form of one or more global
Securities shall no longer be represented by such global Security or
Securities. In such event the Company shall execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of
certificated Securities of such series of like tenor, shall authenticate
and deliver, Securities of such series in certificated form and in an
aggregate principal amount equal to the principal amount of the Security or
Securities in global form representing such series in exchange for such
Security or Securities in global form.
If specified by the Company pursuant to Section 3.01 with respect
to a series of Securities, the Depositary for such series of Securities may
surrender a global Security of such series in exchange in whole or in part
for Securities of such series in certificated form on such terms as are
acceptable to the Company and such Depositary. Thereupon, the Company
shall execute, and the Trustee shall authenticate and deliver, without
service charge to the Depositary,
(1) to each Person specified by such Depositary a new
certificated Security or Securities of the same series of like tenor,
of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the global Security; and
(2) to such Depositary a new global Security of like tenor
in a denomination equal to the difference, if any, between the
principal amount of the surrendered global Security and the aggregate
principal amount of certificated Securities delivered to Holders
thereof.
In any exchange provided for in any of the preceding three
paragraphs, the Company shall execute and the Trustee shall authenticate
and deliver Securities in certificated form in authorized denominations.
Upon the exchange of a global Security for Securities in
certificated form, such global Security shall be cancelled by the Trustee.
Unless expressly provided with respect to the Securities of any series that
such Security may be exchanged for Bearer Securities, Securities issued in
exchange for a Book-Entry Security pursuant to this Section shall be
registered in such names and in such authorized denominations as the
Depositary for such Book-Entry Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Securities to the Persons in whose names
such Securities are so registered.
Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer
or exchange.
Every Registered Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the
Company or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made to the Holder for any
registration of transfer or exchange of Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer
or exchange of Securities, other than exchanges pursuant to Sections 3.04,
9.06 or 11.06 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange of Securities of any series for a period of 15 days
before the selection of any Securities of that series selected for
redemption, or (ii) to register the transfer of or exchange of any Security
so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part, (iii) to register the
transfer of or exchange of any Security if the Holder thereof has exercised
any right to require the Company to purchase such Security, in whole or in
part, except any portion thereof not required to be so purchased, or (iv)
to exchange any Bearer Security so selected for redemption except that such
a Bearer Security any be exchanged for a Registered Security of that series
and like tenor, provided that such Registered Security shall be
simultaneously surrendered for redemption.
SECTION 3.06 Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or Security with a mutilated Coupon
appertaining to it is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security with Coupons corresponding to the Coupons, if any, appertaining to
the surrendered Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding
with Coupons corresponding to the Coupons, if any, appertaining to the
surrendered Security.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security or Security with a destroyed, lost or stolen Coupon and (ii) such
security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security or Coupon has been acquired by a
bona fide purchaser, the Company shall execute and upon its request the
Trustee shall authenticate and deliver, in lieu of any such destroyed, lost
or stolen Security a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding
with Coupons corresponding to the Coupons, if any, appertaining to the
destroyed, lost or stolen Security.
In case any such mutilated, destroyed, lost or stolen Security or
Coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security or Coupon, pay such
Security or Coupon; provided, however, that payment of principal of and any
premium or interest on Bearer Securities shall, except as otherwise
provided in Section 10.02, be payable only at an office or agency located
outside the United States and, unless otherwise specified as contemplated
by Section 3.01, any interest on Bearer Securities shall be payable only
upon presentation and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series with its Coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security,
or in exchange for a Security to which a destroyed, lost or stolen Coupon
appertains, shall constitute an original additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen Security and
its Coupons, if any, or the destroyed, lost or stolen Coupon, shall be at
any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other
Securities of that series and their Coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities
or Coupons.
SECTION 3.07 Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 3.01,
interest on any Registered Security which is payable, and is paid or duly
provided for no later than 1:00 p.m., on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record
Date for such interest.
Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to
be payable to the Holder on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (1) or (2)
below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of
such series (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each
Registered Security of such series and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix
a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than ten days prior to the
date of the proposed payment and not less than ten days after the
receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice
of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to
each Holder of Registered Securities of such Series at his address as
it appears in the Security Register, not less than ten days prior to
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
clause (2).
(2) The Company may make payment of any Defaulted Interest
on the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
At the option of the Company, interest on Registered Securities
of any series that bear interest may be paid (i) by mailing a check to the
address of the person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer to an account maintained by the
person entitled thereto as specified in the applicable Security Register.
Notwithstanding the above, except as otherwise specified with
respect to a series of Securities in accordance with the provisions of
Section 3.01, a Holder of $10,000,000 or more in aggregate principal amount
of Securities of the same series having the same Interest Payment Date
shall be entitled to receive payments of interest by wire transfer of
immediately available funds if appropriate wire transfer instructions have
been received by the Trustee on or before the Regular Record Date
immediately preceding the applicable Interest Payment Date.
Subject to the foregoing provisions of this Section, each
Security or Coupon, if any, delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any other
Security or Coupon, if any, shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security or Coupon.
SECTION 3.08 Persons Deemed Owners.
Prior to due presentment of a Registered Security for
registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Registered
Security is registered as the owner of such Registered Security for the
purpose of receiving payment of principal of (and premium, if any) and
(subject to Section 3.07) interest on such Registered Security and for all
other purposes whatsoever, whether or not such Registered Security be
overdue, and neither the Company, the Trustee nor any agent of the Company
or the Trustee shall be affected by notice to the contrary.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any
Coupon as the absolute owner of such Bearer Security or Coupon for the
purpose of receiving payment thereof or on account thereof and for all
other purposes whatsoever, whether or not such Bearer Security or Coupon be
overdue, and neither the Company, the Trustee nor any agent of the Company
or the Trustee shall be affected by notice to the contrary.
SECTION 3.09 Cancellation.
All Securities and Coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee for cancellation or, if surrendered to the
Trustee, promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities and Coupons so delivered shall be promptly
cancelled by the Trustee. No Securities or Coupons shall be authenticated
in lieu of or in exchange for any Securities or Coupons cancelled as
provided in this Section, except as expressly permitted by this Indenture.
All cancelled Securities and Coupons shall be destroyed by the Trustee and,
if requested by the Company, a certificate evidencing such destruction
shall be delivered to the Company.
SECTION 3.10 Computation of Interest.
Except as otherwise specified as contemplated by Section 3.01 for
Securities of any series, interest on the Securities of each series shall
be computed, based on actual days elapsed, on the basis of a 360-day year
of twelve 30-day months.
ARTICLE IV
CONVERSION OF SECURITIES
SECTION 4.01 Applicability of Article.
If the Securities of any series are Convertible Securities the
provisions of this Article Four shall be applicable to the Securities of
such series (except as otherwise specified in a Board Resolution, Officers'
Certificate or executed supplemental indenture referred to in Section 3.01
by or pursuant to which the form and terms of the Convertible Securities of
such series were established).
Subject to the provisions of this Article Four, the Holder of any
Convertible Security shall have the right, at the option of such Holder, to
convert the principal amount of such Convertible Security or any portion of
the principal amount thereof which is $1,000 or an integral multiple of
$1,000 (or such principal amount as is specified in a Board Resolution,
Officers' Certificate or executed supplemental indenture referred to in
Section 3.01 by or pursuant to which the form and terms of the Convertible
Securities of such series were established) into the number of shares of
Common Stock obtained by dividing the principal amount so to be converted
by the Conversion Price, defined and determined as hereinafter provided, in
effect at the Conversion Date (as defined in Section 4.02) in the manner
provided in Section 4.02 and subject to settlement of fractional interests
in accordance with Section 4.03 and subject to the other provisions of this
Article Four with respect to the delivery of property other than Common
Stock. Such conversion privilege shall, except as specified in a Board
Resolution, Officers' Certificate or executed supplemental indenture
referred to in Section 3.01 by or pursuant to which the form and terms of
the Convertible Securities of such series were established, commence on the
date of the issuance of such Convertible Security or any Predecessor
Security and shall expire at the close of business on the Stated Maturity
of such Convertible Security. If a Convertible Security or portion thereof
is called for redemption or is delivered for repurchase, such conversion
privilege in respect of the Convertible Security or portion so called shall
expire at the close of business on the fifth Business Day prior to the
Redemption Date or repurchase date, unless the Company shall default in
making the payment due upon redemption or repurchase.
The conversion price (the "Conversion Price") for a series of
Convertible Securities shall be set forth in a Board Resolution, Officers'
Certificate or executed supplemental indenture referred to in Section 3.01
by or pursuant to which the form and terms of the Convertible Securities of
such series were established and shall be subject to adjustment as provided
in Section 4.04.
SECTION 4.02 Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any
Convertible Security to be converted, in whole or in part, shall surrender
such Convertible Security to the Conversion Agent at any time during usual
business hours at its office or agency maintained for the purpose as
provided in this Indenture, accompanied by a fully executed written notice
(the "Conversion Notice"), in substantially the form set forth on the
reverse of the Convertible Security, that the Holder elects to convert such
Convertible Security or, if less than the entire principal amount thereof
is to be converted, a stated portion thereof constituting a multiple of
$1,000 in principal amount (or such other principal amount as is specified
in a Board Resolution, Officers' Certificate or executed supplemental
indenture referred to in Section 3.01 by or pursuant to which the form and
terms of the Convertible Securities of such series were established). A
Convertible Security surrendered for conversion during the period between
the close of business on any record date for such Convertible Security and
the opening of business on the related Interest Payment Date (the "Interest
Period") that shall not have been called for redemption on a Redemption
Date within such Interest Period (or on such Interest Payment Date) shall
be accompanied also by payment of an amount equal to the interest payable
on such Interest Payment Date on the portion of the principal amount of the
Convertible Security being surrendered for conversion. Such interest shall
be payable to the Holder on the Record Date notwithstanding the conversion.
Such Conversion Notice shall also state the name or names (and address or
addresses) in which the certificate or certificates for shares of Common
Stock shall be issued (or to whom payment in cash in lieu of Common Stock
shall be made). Convertible Securities surrendered for conversion shall
(if so required by the Company or the Conversion Agent) be duly endorsed
by, or be accompanied by a written instrument or instruments of transfer in
form satisfactory to the Company and the Conversion Agent duly executed by,
the Holder or his attorney duly authorized in writing.
As promptly as practicable on or after the Conversion Date (as
defined below), the Company shall, subject to the provisions of Section
4.07, issue and deliver at such office or agency to such Holder, or on his
written order, a certificate or certificates for the number of full shares
of Common Stock issuable on conversion of such Convertible Security or
portion thereof in accordance with the provisions of this Article Four
together with payment in cash, as provided in Section 4.03, in respect of
any fraction of a share of Common Stock otherwise issuable upon such
conversion or, if so provided in a Board Resolution, Officers' Certificate
or executed supplemental indenture referred to in Section 3.01 by or
pursuant to which the form and terms of the Convertible Securities of such
series were established, a payment in cash in lieu of shares of Comon
Stock. Such conversion shall be deemed to have been effected immediately
prior to the close of business on the date (herein called the "Conversion
Date") on which such notice in proper form shall have been received by the
Conversion Agent and such Convertible Security shall have been surrendered
as aforesaid, and the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable,
if any, upon such conversion shall be deemed to have become on the
Conversion Date the holder or holders of record of the shares represented
thereby; provided, however, that upon any such surrender on any date when
the stock transfer books of the Company shall be closed, the Person or
Persons in whose name or name the certificate or certificates for such
shares are to be issued, if any, shall be deemed the record holder or
holders thereof for all purposes at the opening of business on the next
succeeding day on which such stock transfer books are open but such
conversion shall nevertheless be at the Conversion Price in effect at the
close of business on the date when such Security shall have been so
surrendered with the Conversion Notice.
In the case of conversion of a portion, but less than all, of a
Convertible Security, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the
Company, a new Convertible Security or Securities of the same series in the
aggregate principal amount equal to the unconverted portion of the
principal amount of the surrendered Convertible Security. Except as
otherwise expressly provided in this Indenture, no payment or adjustment
shall be made for interest accrued on any Convertible Security (or portion
thereof) converted or for dividends or distributions on any Common Stock
issued upon conversion of any Convertible Security. The right, if any, of
a Holder of any Convertible Security to cause the Company to redeem,
purchase or repay such Convertible Security shall terminate at the close of
business on the Conversion Date.
SECTION 4.03 Fractional Interests.
No fractions of shares or scrip representing fractions of shares
shall be issued upon conversion of Convertible Securities. If more than
one Convertible Security of the same series shall be surrendered for
conversion, in whole or in part, at one time by the same Holder, the number
of full shares which shall be issuable upon conversion thereof shall be
computed on the basis of the aggregate principal amount of the Convertible
Securities (or specified portions thereof) to be converted, so surrendered.
If any fraction of a share of Common Stock would, except for the foregoing
provisions of this Section 4.03, be issuable on the conversion of any
Convertible Security or Securities (or specified portions thereof), the
Company shall make payment in lieu thereof in cash equal to the same
fraction of the market price per share of Common Stock. For such purposes
the market price per share of Common Stock shall be determined on the basis
of the last sale price of one share of Common Stock regular way on the most
recent Trading Day prior to the Conversion Date or, if no such reported
sale takes place on such day, the average of the reported closing bid and
asked prices regular way on such day, in either case (i) as reported on the
American Stock exchange, or (ii) if on such Trading Day the Common Stock is
not listed or admitted to trading on such exchange, on the principal
national securities exchange on which the Common Stock is listed or
admitted to trading, or (iii) if not listed or admitted to trading on any
national securities exchange on such Trading Day, then as reported through
the National Association of Securities Dealers, Inc. on its NASDAQ National
Market System or NASDAQ System or a similar organization if NASDAQ is no
longer reporting information, or (iv) if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on such
National Market System or NASDAQ System on such Trading Day, then the
average of the closing bid and asked prices in the over-the-counter market
as furnished by any New York Stock Exchange member firm selected from time
to time by the Board of Directors for that purpose, or (v) if not quoted by
any such organization on such Trading Day, the fair value of such Common
Stock on such Trading Day, as determined by the Board of Directors. The
term "Trading Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday, other than any day on which securities are not traded on any of the
above mentioned exchanges or in such markets.
SECTION 4.04 Adjustment of Conversion Price.
The Conversion Price with respect to Convertible Securities of a
series shall be adjusted from time to time as follows with respect to
events that take place after the initial issuance of any Securities of such
series:
(1) if the Company shall (i) pay a dividend or make a
distribution in shares of Common Stock on the Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares,
(iii) combine its outstanding shares of Common Stock into a smaller number
of shares or (iv) issue by reclassification of its Common Stock any shares
of capital stock of the Company, the Conversion Price shall be deemed to be
proportionately adjusted, so that any Holder of any Convertible Security
thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock or other capital stock of the Company
which he would have owned or been entitled to receive immediately following
such action had such Convertible Security been converted immediately prior
thereto. If in any reclassification the holders of Common Stock are
entitled to make an election between different forms of consideration, the
Holders shall be deemed to have elected to receive the consideration
payable to a plurality of the holders of Common Stock who have not duly
filed elections as to the consideration to be received.
An adjustment made pursuant to this subsection (1) shall become
effective immediately, except as provided in subsection (6) below, after
the record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
(2) In case the Company shall issue generally to holders of
Common Stock rights, options or warrants entitling such holders (for a
period not exceeding 45 days from the date of such issuance) to subscribe
for or purchase shares of Common Stock at a price per share less than the
current market price per share (as determined pursuant to subsection (5)
below) of the Common Stock on the record date mentioned below, the
Conversion Price shall be adjusted to a price, computed to the nearest
cent, so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of issuance of
such rights, options or warrants by a fraction, of which
(i) the numerator shall be the sum of (A) the number of
shares of Common Stock outstanding on the date fixed for the
determination of stockholders entitled to receive such rights, options
or warrants, and (B) the number of shares which the aggregate
offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such current
market price (determined by multiplying such total number of shares by
the exercise price of such rights, options or warrants and dividing
the product so obtained by such current market price), and of which
(ii) the denominator shall be the sum of (A) the number of
shares of Common Stock outstanding on the date fixed for the
determination of stockholders entitled to receive such rights, options
or warrants, and (B) the number of additional shares of Common Stock
which are so offered for subscription or purchase.
Such adjustment shall become effective immediately, except as
provided in subsection (6) below, after the record date for the
determination of holders entitled to receive such rights, options or
warrants.
(3) In case the Company shall, by dividend or otherwise,
distribute, to substantially all holders of Common Stock, evidences of
indebtedness, equity securities (including equity interests in the
Company's Subsidiaries) other than Common Stock, or other assets (other
than cash dividends paid out of earned surplus of the Company or current
net earnings as shown on the books of the Company and other than
Extraordinary Cash Dividends, which are governed by the provisions of
subsection (4) below), or shall distribute to substantially all holders of
Common Stock rights, options or warrants entitling such Holders to
subscribe for securities (other than those referred to in subsection (2)
above), then in each such case the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of such
distribution by a fraction of which
(i) the numerator shall be the current market price per
share (determined as provided in subsection (5) below) of the Common
Stock on the record date mentioned below less the then fair market
value (as determined by the Board of Directors, whose determination
shall, if made in good faith, be conclusive evidence of such fair
market value and provided to the Trustee) of the portion of the
assets, evidence of indebtedness, equity securities or other
securities so distributed or of such subscription rights, options or
warrants applicable to one share of Common Stock, and of which
(ii) the denominator shall be such current market price per
share of the Common Stock.
Such adjustment shall become effective immediately, except as
provided in subsection (6) below, after the record date for the
determination of stockholders entitled to receive such distribution.
Notwithstanding the foregoing, with respect to the rights ("Rights")
distributed under the Rights Agreement, dated as of June 4, 1989, between
the Company and BankBoston, N.A. as amended and as it may be further
amended after the date hereof and/or in the event that and each time that
the Company shall distribute any other rights or warrants (other than those
referred to in paragraph (2) of this Section) ("Additional Rights") pro
rata to holders of Common Stock, the Company shall make proper provision so
that each Holder of a Convertible Security who converts such Convertible
Security (or any portion thereof) (A) after the date hereof in the case of
Rights and (B) after the record date for any such distribution in the case
of Additional Rights, and prior to the expiration or redemption of the
Rights or Additional Rights, as the case may be, shall be entitled to
receive upon such conversion, in addition to the shares of Common Stock
issuable upon such conversion (the "Conversion Shares"), a number of Rights
or Additional Rights, to be determined as follows: (i) if such conversion
occurs on or prior to the date for the distribution to the holders of
Rights or Additional Rights of separate certificates evidencing such Rights
or Additional Rights (the "Distribution Date"), the same number of Rights
or Additional Rights to which a holder of a number of shares of Common
Stock equal to the number of Conversion Shares is entitled at the time of
such conversion in accordance with the terms and provisions of and
applicable to the Rights or Additional Rights; and (ii) if such conversion
occurs after the Distribution Date, the same number of Rights or Additional
Rights to which a holder of the number of shares of Common Stock into which
the principal amount of the Security so converted was convertible
immediately prior to the Distribution Date would have been entitled on the
Distribution Date in accordance with the term and provisions of and
applicable to the Rights or Additional Rights.
If, with respect to any distribution to which this paragraph (3)
would otherwise apply, the fair market value of the portion of the assets
so distributed applicable to one share of Common Stock exceeds the current
market price per share of Common Stock or the current market price per
share of Common Stock exceeds such fair market value by less than $1.00,
then the adjustment provided by this subsection (3) shall not be made and
in lieu thereof the provision of paragraph (8) shall apply to such
distribution.
(4) If the Company shall, by dividend or otherwise, distribute
generally to holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 4.05 applies)
in an aggregate amount such that such dividend or distribution shall
constitute an Extraordinary Cash Dividend, then, and in each such case,
immediately after the close of business on such date for determination, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to the close of business on the date fixed for determination of the
stockholders entitled to receive such distribution by a fraction, of which
(i) the numerator shall be equal to (A) the current market
price per share (determined as provided in paragraph (5) of this
Section) of the Common Stock on the date fixed for such determination
less (B) an amount equal to the excess of such Extraordinary Cash
Dividend over four times the per share amount of the Company's most
recently declared regular quarterly dividend and of which
(ii) the denominator shall be equal to such market price
per share.
(5) For the purpose of any computation under subsections (2),
(3) or (4) above, the current market price per share of Common Stock on any
date shall be deemed to be the average of the Sale Prices for the 20
consecutive Trading Days commencing 30 Trading Days before the date in
question.
(6) In any case in which this Section 4.04 shall require that an
adjustment of the Conversion Price be made effective immediately following
a record date, the Company may elect to defer the effectiveness of such
adjustment (but in no event until a date later than the effective time of
the event giving rise to such adjustment), in which case the Company shall,
with respect to any Convertible Security converted after such record date
and before such adjustment shall have become effective, (i) defer paying
any cash payment pursuant to Section 4.03 or issuing to the Holder of such
Convertible Security the number of shares of Common Stock and other capital
stock of the Company issuable upon such conversion in excess of the number
of shares of Common Stock and other capital stock of the Company issuable
thereupon only on the basis of the Conversion Price prior to adjustment and
(ii) not later than five Business Days after such adjustment shall have
become effective, pay to such Holder the appropriate cash payment pursuant
to Section 4.03 and issue to such Holder the additional shares of Common
Stock and other capital stock of the Company issuable on such conversion.
(7) No adjustment of the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least
one percent of the Conversion Price; provided, however, that any
adjustments which by reason of this subsection (7) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment; and, provided, further, that each adjustment shall be required
and made in accordance with the provisions of this Article Four (other than
this subsection (7)) not later than such time as may be required in order
to preserve the tax-free nature of a distribution to the holders of
Convertible Securities or Common Stock. All calculations under this
Article Four shall be made to the nearest cent or to the nearest one-
hundredth of a share, as the case may be.
(8) If the Company makes a distribution to 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 the last sentence of subsection (3), would otherwise result in an
adjustment in the Conversion Rate, then, from and after the record date for
determining the holders of Common Stock entitled to receive the
distribution, a Holder of a Convertible Security that converts such
Convertible Security in accordance with the provisions of this Indenture
shall upon such conversion be entitled to receive, in addition to the
shares of Common Stock into which the Convertible Security is convertible,
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 Convertible Security immediately prior to the record date for
determining the holders of Common Stock entitled to receive the
distribution.
(9) Whenever the Conversion Price shall be adjusted as herein
provided, the Company shall promptly (i) file with the Trustee and each
Conversion Agent an Officers' Certificate setting forth the Conversion
Price after such adjustment and setting forth in reasonable detail the
facts requiring such adjustment and the manner of computing the same, and
(ii) mail or cause to be mailed a notice stating that the Conversion Price
has been adjusted and setting forth the adjusted Conversion Price to each
Holder of Convertible Securities at his address as the same appears on the
Security Register.
Anything in this Section 4.04 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Conversion
Price, in addition to those required by this Section 4.04, as it in its
discretion shall determine to be advisable in order that any stock
dividend, subdivision of shares, distribution of rights or warrants to
purchase stock or securities, or distribution of other assets (other than
cash dividends) hereafter made by the Company to its stockholders shall not
be taxable.
SECTION 4.05 Continuation of Conversion Privilege in Case of Merger,
Consolidation or Sale of Assets.
If the Company is a party to a transaction subject to Section
8.01 (other than a sale of all or substantially all of the assets of the
Company in a transaction in which the holders of Common Stock immediately
prior to such transaction do not receive securities, cash, or other assets
of the Company or any other Person) or a merger or binding share exchange
which reclassifies or changes its outstanding Common Stock, the Person
obligated to deliver securities, cash or other assets to holders of Common
Stock pursuant to such transaction subject to Section 8.01, merger or
binding share exchange shall enter into a supplemental indenture. If the
issuer of securities deliverable upon conversion of Convertible Securities
is an Affiliate of the successor Company, that issuer shall join in the
supplemental indenture. The supplemental indenture shall provide that the
Holder of a Convertible Security shall have the right thereafter (during
the period such Convertible Security shall be convertible as specified in
Section 4.01) to convert such Convertible Security into the kind and amount
of securities, cash, property or other assets which such Holder would have
received immediately after the consolidation, merger, binding share
exchange or transfer if such Holder had converted the Convertible Security
immediately before the effective date of such transaction, assuming (to the
extent applicable) that such Holder (i) was not a Person with which the
Company consolidated or into which the Company merged or which merged into
the Company or to which such Sale or transfer was made, as the case may be
(a "Constituent Person"), or an Affiliate of a Constituent Person to such
transaction, (ii) made no election, if any, as to the kind or amount of
securities, cash or other property receivable upon such transaction with
respect thereto, and (iii) was treated alike with the plurality of non-
electing Holders. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Article Four. The successor Company shall
mail to each Holder of a Convertible Security a notice briefly describing
the supplemental indenture.
Neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in
any such supplemental indenture relating either to the kind or amount of
shares of stock or securities or property or cash receivable by Holders
upon the conversion of their Securities after any such reclassification,
change, consolidation, merger, sale or conveyance or to any adjustment to
be made with respect thereto, but, subject to the provisions of Section
7.01, may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, an Officers'
Certificate or, at the option of the Company, a certificate of a firm of
independent public accountants which shall conform to the provisions of
Section 1.02 with respect thereto.
If the Company shall enter into a sale of all or substantially
all of the assets of the Company in a transaction in which the holders of
the Common Stock immediately prior to such transaction do not receive
securities, cash, or other assets of the Company or any other Person, the
Convertible Securities shall remain convertible into the Common Stock (or
other property) which, but for such sale of assets of the Company, the
Holders of such Convertible Securities would have been entitled to upon
conversion.
If this Section 4.05 applies, neither paragraph (1) nor (3) of
Section 4.04 applies.
SECTION 4.06 Notices of Certain Events.
If:
(1) the Company shall declare a dividend (or any other
distribution) payable to the holders of Common Stock other than cash
dividends which are not Extraordinary Cash Dividends; or
(2) the Company shall authorize the granting generally to
the holders of Common Stock of rights, options or warrants to subscribe for
or purchase any shares of stock of any class or of any other rights; or
(3) the Company shall authorize any reclassification or
change of the Common Stock (other than a subdivision or combination of its
outstanding shares of Common Stock), or any consolidation or merger to
which the Company is a party and for which approval of any stockholders of
the Company is required, or the sale or conveyance of all or substantially
all the property or business of the Company; or
(4) there shall be authorized or ordered any voluntary or
involuntary dissolution, liquidation or winding-up of the Company; or
(5) the Company or any Subsidiary or Affiliate shall
commence a tender offer for all or a portion of the Company's outstanding
shares of Common Stock (or shall amend any such tender offer);
then, the Company shall cause to be filed at the office or agency
maintained for the purpose of conversion of the Convertible Securities as
provided in Section 10.02, and shall cause to be mailed to each Holder of
Convertible Securities, at his address as it shall appear on the Security
Register therefor, at least 20 days before the date hereinafter specified
(or the earlier of the dates hereinafter specified, in the event that more
than one date is specified), a notice stating the date on which (i) a
record is expected to be taken for the purpose of such dividend,
distribution, rights, options, warrants or tender offer or if a record is
not to be taken, the date as of which the holders of Common Stock of record
to be entitled to such dividend, distribution or rights (or in the case of
a tender offer to be entitled to tender shares of Common Stock) are to be
determined, or (ii) such reclassification, change, consolidation, merger,
sale, conveyance, dissolution, liquidation or winding-up is expected to
become effective, and the date, if any is to be fixed, as of which it is
expected that holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, change, consolidation,
merger, sale, conveyance, dissolution, liquidation, winding-up or tender
offer.
SECTION 4.07 Taxes on Conversion.
The Company will pay any and all documentary, stamp or similar
taxes payable to the United States (or any other jurisdiction in which the
Company is domiciled or incorporated) or any political subdivision or
taxing authority thereof or therein (other than any such tax of any such
non-United States jurisdiction that would not have been payable in respect
of the applicable Holder if such jurisdiction had been the United States or
any political subdivision or taxing authority thereof) in respect of the
issue or delivery of shares of Common Stock on conversion of Convertible
Securities pursuant hereto; provided, however, that the Holder shall pay
any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder's name, and the Conversion Agent may
refuse to deliver the certificates representing such Common Stock until the
Person requesting such issue or delivery has paid to the Company the amount
of any such tax or has established, to the satisfaction of the Company,
that such tax has been paid. The Company extends no protection with
respect to any other taxes imposed in connection with conversion of
Convertible Securities.
SECTION 4.08 Company to Provide Stock.
The Company shall at all times reserve and keep available free
from preemptive rights, out of its authorized but unissued shares of
capital stock, the full number of shares of capital stock to provide for
the conversion of Convertible Securities from time to time as such
Convertible Securities are presented for conversion; provided, however,
that nothing contained herein shall be construed to preclude the Company
from satisfying its obligations in respect of the conversion of Convertible
Securities by delivery of repurchased shares of Common Stock which are held
in the treasury of the Company.
If any shares of capital stock to be reserved for the purpose of
conversion of Convertible Securities hereunder require registration with or
approval of any governmental authority under any federal or state law or
any action in respect of any stock exchange or similar listing before such
shares may be validly issued or delivered upon conversion, then the Company
covenants that it will in good faith and as expeditiously as possible
endeavor to secure such registration, approval or action, as the case may
be; provided, however, that, nothing in this Section 4.08 shall be deemed
to affect in any way the obligations of the Company to convert Convertible
Securities into Common Stock as provided in this Article Four.
Before taking any action which would cause an adjustment reducing
the Conversion Price below the then par value, if any, of the Common Stock,
the Company will take all corporation action which may, in the opinion of
counsel, be necessary in order that the Company may validly and legally
issue fully paid and non-assessable shares of Common Stock at such adjusted
Conversion Price.
The Company covenants that all shares of Common Stock which may
be issued upon conversion of Convertible Securities will upon issue be
fully paid and non-assessable by the Company and free of preemptive rights.
SECTION 4.09 Disclaimer of Responsibility for Certain Matters.
Neither the Trustee, the Conversion Agent nor any agent of either
shall at any time be under any duty or responsibility to any Holder of
Convertible Securities to determine whether any facts exist which may
require any adjustment of the Conversion Price, or with respect to the
Officers' Certificate referred to in Section 4.04(9), or with respect to
the nature or extent of any such adjustment when made, or with respect to
the method employed, herein or in any supplemental indenture provided to be
employed, in making the same. Neither the Trustee, the Conversion Agent
nor any agent of either shall be accountable with respect to the validity
or value (or the kind or amount) of any shares of Common Stock, or of any
securities or property (including cash), which may at any time be issued or
delivered upon the conversion of any Convertible Security; and neither the
Trustee, the Conversion Agent nor any agent of either makes any
representation with respect thereto. Neither the Trustee, the Conversion
Agent nor any agent of either shall be responsible for any failure of the
Company to issue, register the transfer of or deliver any shares of Common
Stock or stock certificates or other securities or property (including
cash) upon the surrender of any Convertible Security for the purpose of
conversion or, subject to Section 3.01, to comply with any of the covenants
of the Company contained in this Article Four.
SECTION 4.10 Return of Funds Deposited for Redemption of Converted
Convertible Securities.
Any funds which at any time shall have been deposited by the
Company or on its behalf with the Trustee or any Paying Agent for the
purpose of paying the principal of and interest, if any, on any of the
Convertible Securities and which shall not be required for such purposes
because of the conversion of such Convertible Securities, as provided in
this Article Four, shall after such conversion be repaid to the Company by
the Trustee or such Paying Agent.
ARTICLE V
SATISFACTION, DISCHARGE AND DEFEASANCE
SECTION 5.01 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect with respect to Securities of any series (except as to any surviving
rights of registration of transfer or exchange of Securities of such
series, replacement of lost, stolen or mutilated Securities of such series
and conversion of Securities of such series herein expressly provided for),
and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to such series, when
(1) either
(i) all Securities of such series theretofore authenticated
and delivered and all Coupons appertaining thereto (other than
(i) Coupons appertaining to Bearer Securities of such series
surrendered in exchange for Registered Securities and maturing
after such exchange, surrender of which is not required or has
been waived as provided in Section 3.05, (ii) Securities of such
series and Coupons which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 3.06,
(iii) Coupons appertaining to Bearer Securities of such series
called for redemption and maturing after the relevant Redemption
Date, surrender of which has been waived as provided in Section
11.06 and (iv) Securities of such series and Coupons for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid
to the Company or discharged from such trust, as provided in
Section 10.03) have been delivered to the Trustee for
cancellation; or
(ii) all such Securities and Coupons of such series not
theretofore delivered to the Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity
within one year, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (A), (B) or (C) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose an amount sufficient to pay and discharge the entire indebtedness
on such Securities and Coupons of such series not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities and Coupons
of such series which have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with. In addition,
the Opinion of Counsel shall be to the effect that Holders of the
Securities and Coupons, if any, of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of
the Company's exercise of its option under this Section 5.01 and will
be subject to Federal income tax in the same amount, in the same
manner and at the same times as would have been the case if such
option had not been exercised and must refer to and be based upon a
ruling of the Internal Revenue Service.
At any time when no Securities of any series are outstanding,
this Indenture shall upon Company Request cease to be of further effect and
the Trustee, at the expense of the Company, shall execute proper
instruments of satisfaction and discharge of this Indenture.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 7.05 and, if
money shall have been deposited with the Trustee pursuant to subclause (ii)
of clause (1) of this Section, the obligations of the Trustee under Section
5.02 and the last paragraph of Section 10.03, shall survive.
SECTION 5.02 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.03,
all money deposited with the Trustee pursuant to Sections 5.01 and 5.03
shall be held in trust and applied by it, in accordance with the provisions
of the Securities and Coupons, if any, and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting
as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and interest for
whose payment such money has been deposited with the Trustee; but such
money need not be segregated from other funds except to the extent required
by law.
SECTION 5.03 Satisfaction, Discharge and Defeasance of Securities of Any
Series.
If this Section is specified, as contemplated by Section 3.01, to
be applicable to Securities and Coupons, if any, of any series, at the
Company's option, either
(1) the Company will be deemed to have been Discharged (as
defined below) from its obligations with respect to Securities and Coupons,
if any, of such series or
(2) the Company will cease to be under any obligation to
comply with any term, provision or condition set forth in (i) Article VIII
and Sections 10.09, 10.10 and 10.11 or (ii) the terms, provisions or
conditions of such series specified pursuant to Section 3.01 (provided,
however, that the Company may not cease to comply with any obligations as
to which it may not be Discharged pursuant to the definition of
"Discharged"), if, in the case of (1) and (2), with respect to the
Securities and Coupons, if any, of such series on the 91st day after the
applicable conditions set forth below in (x) and either (y) or (z) have
been satisfied:
(x)(i) the Company has paid or caused to be paid all
other sums payable with respect to the Outstanding Securities and
Coupons, if any, of such series (in addition to any required
under (y) or (z)); and (ii) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of the entire
indebtedness on all Outstanding Securities and Coupons, if any,
of any such series have been complied with; and
(y)(i) the Company shall have deposited or caused to
be deposited irrevocably with the Trustee as a trust fund
specifically pledged as security for (on a first-priority
perfected basis), and dedicated solely to, the benefit of the
Holders of the Securities and Coupons, if any, of such series (A)
an amount (in such currency or currency unit in which the
Outstanding Securities and Coupons, if any, of such series are
payable) or (B) U.S. Government Obligations (as defined below)
or, in the case of Securities and Coupons, if any, denominated in
a Foreign Currency and if so specified pursuant to Section 3.01,
Foreign Government Securities (as defined below), which through
the payment of interest and principal in respect thereof in
accordance with their terms will provide, not later than the due
date of any payment of principal (including any premium) and
interest, if any, under the Securities and Coupons, if any, of
such series, money in an amount or (C) a combination of (A) and
(B) sufficient (in the opinion with respect to (B) and (C) of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee) to pay and discharge each installment of principal of
(including any premium), and interest, if any, on, the
Outstanding Securities and Coupons, if any, of such series on the
dates such installments of interest or principal are due;
(ii)(A) no Event of Default or event (including such
deposit) which with notice or lapse of time or both would become
an Event of Default shall have occurred and be continuing on the
date of such deposit, (B) no Event of Default as defined in
clause (5) or (6) of Section 6.01, or event which with notice or
lapse of time or both would become an Event of Default under
either such clause, shall have occurred within 90 days after the
date of such deposit and (C) such deposit and the related
intended consequence under (1) or (2) will not result in any
default or event of default under any material indenture,
agreement or other instrument binding upon the Company or any
Subsidiary or any of their properties;
(iii) the Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that Holders of the
Securities and Coupons, if any, of such series will not recognize
income, gain or loss for Federal income tax purposes as a result
of the Company's exercise of its option under this Section 5.03
and will be subject to Federal income tax in the same amount, in
the same manner and at the same times as would have been the case
if such option had not been exercised; and
(iv) the Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that if the deposit referred
to in paragraph (y)(i) above shall include U.S. Government
Obligations or Foreign Government Securities, such deposit shall
not result in the Company, the Trustee or such trust being
regulated as an "investment company" under the Investment Company
Act of 1940, as amended; or
(z) the Company has properly fulfilled such other
means of satisfaction and discharge as is specified, as
contemplated by Section 3.01, to be applicable to the Securities
and Coupons, if any, of such series.
Any deposits with the Trustee referred to in clause (y)(i) above
will be made under the terms of an escrow trust agreement in form and
substance satisfactory to the Trustee. If any Outstanding Securities and
Coupons, if any, of such series are to be redeemed prior to their Stated
Maturity, whether pursuant to any mandatary redemption provisions or in
accordance with any mandatory sinking fund requirement, the applicable
escrow trust agreement will provide therefor and the Company will make such
arrangements as are satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.
"Discharged" means that the Company will be deemed to have paid
and discharged the entire indebtedness represented by, and obligations
under, the Securities and Coupons, if any, of the series as to which this
Section is specified as applicable as aforesaid and to have satisfied all
the obligations under this Indenture relating to the Securities and
Coupons, if any, of such series (and the Trustee, at the expense of the
Company, will execute proper instruments acknowledging the same), except
(A) the rights of Holders thereof to receive, from the trust fund described
in clause (y)(i) above, payments of the principal of, premium and the
interest, if any, on such Securities and Coupons, if any, when such
payments are due, (B) the Company's obligations with respect to such
Securities and Coupons, if any, under Sections 3.05 and 3.06 (insofar as
applicable to Securities of such series), Article IV (insofar as applicable
to Securities of such series), Sections 5.02, 10.02 and 10.03 (last
paragraph only) and the Company's obligations to the Trustee under Sections
7.05, 7.06 and 7.07 and (C) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, will survive such discharge. The
Company will reimburse the trust fund for any loss suffered by it as a
result of any tax, fee or other charge imposed on or assessed against
deposited U.S. Government Obligations or Foreign Government Securities, as
the case may be, or any principal, premium or interest paid on such
obligations, and, subject to the provisions of Section 7.05, will indemnify
the Trustee against any claims made against the Trustee in connection with
any such loss.
"Foreign Government Securities" as used in Section 5.03 means,
with respect to Securities and Coupons, if any, of any series that are
denominated in a Foreign Currency, securities that are (i) direct
obligations of the government that issued such currency for the payment of
which obligations its full faith and credit is pledged or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of such government (the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation of such
government) which, in either case under clauses (i) or (ii), are not
callable or redeemable at the option of the issuer thereof.
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United
States the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation of the United States, which, in either case
under clauses (i) or (ii), are not callable or redeemable at the option of
the issuer thereof, and will also include a depository receipt issued by a
bank or trust company as custodian with respect to any such U.S. Government
Obligation or a specified payment of interest on or principal of any such
U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligations or the
specific payment of interest on or principal of the U.S. Government
Obligation evidenced by such depository receipt.
ARTICLE VI
REMEDIES
SECTION (a) Events of Default.
"Event of Default," wherever used herein with respect to
Securities of any series, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any
Security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or
premium, if any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund
payment, when and as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of
series of Securities other than the series in respect of which the
Event of Default is being determined), and continuance of such default
or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25 percent in
principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Company
or a Significant Subsidiary in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law or (B) a decree or order adjudging the Company or
a Significant Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or a
Significant Subsidiary under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or a Significant
Subsidiary or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any
such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 90 consecutive days; or
(6) the commencement by the Company or a Significant
Subsidiary of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree
or order for relief in respect of the Company or a Significant
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by it to the filing of
such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or a Significant Subsidiary or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Company or a Significant Subsidiary in
furtherance of any such action; or
(7) acceleration of Indebtedness of the Company or any
Significant Subsidiary aggregating more than $50 million so that such
Indebtedness becomes due prior to the date on which the same would
otherwise become due and payable, unless such acceleration is
rescinded, annulled or otherwise cured prior to the giving of the
notice referred to in the first paragraph of Section 6.02 with respect
to the Securities of such series; or
(8) final and nonappealable judgments or orders to
pay, in the aggregate at any one time, more than $50 million rendered
by a court of competent jurisdiction against the Company or a
Significant Subsidiary, continued for 90 days (during which execution
shall not be effectively stayed or bonded) without discharge or
reduction to $50 million or less; or
(9) any other Event of Default provided with respect
to Securities of that series.
SECTION 6.01 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series
at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 25 percent in principal amount
of the Outstanding Securities of that series may declare the principal
amount (or, if the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all of the Securities of that series to be due and
payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable;
provided, however, that in the case of any Event of Default with respect to
the Company specified in clause (5) or (6) of Section 6.01, such amount
shall become immediately due and payable without any notice, declaration or
other act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration with respect
to Securities of any series has been made and before a judgment or decree
for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in
principal amount of the Outstanding Securities of that series, by written
notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(A) all overdue interest on all Securities of that
series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of
that series, other than the nonpayment of the principal of Securities
of that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.12.
No such recission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 6.02 Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security or Coupon, if any, when such interest becomes due and payable
and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities or Coupons, if any, the whole amount then
due and payable on such Securities for principal (and premium, if any) and
interest and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (and premium, if any) and on
any overdue interest, at the rate or rates prescribed therefor in such
Securities or Coupons, if any, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amount forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due
and unpaid, and may prosecute such proceeding to judgment or final decree,
and may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other
obligor upon the Securities, wherever situated.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities
of such series by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether
for the specific enforcement of any covenant or agreement in this Indenture
or in aid of the exercise of any power granted herein, or to enforce any
other proper remedy.
SECTION 6.03 Trustee May Enforce Claims without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Securities in respect of which such judgment has been recovered.
SECTION 6.04 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee, any predecessor Trustee and the Holders allowed in any
judicial proceedings relative to the Company, its creditors or its
property.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.05 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article in
respect of the Securities of any series shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or premium, if any) or
interest on the Securities of such series, upon presentation of the
Securities and Coupons, if any, appertaining thereto in respect of which
moneys have been collected and the notation thereon of the distribution if
such principal, premium and interest is only partially paid and upon
surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under
Section 7.05; and
Second: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively.
SECTION 6.06 Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25 percent in principal
amount of the Outstanding Securities of that series shall have made
written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder,
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
a majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of
any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under
this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all of such Holders.
SECTION 6.07 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case,
subject to any determination in such proceeding, the Company, the Trustee
and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had
been instituted.
SECTION 6.08 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 3.06, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder,
or otherwise, shall not prevent the concurrent assertion or employment of
any other appropriate right or remedy.
SECTION 6.09 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders, as the case may be.
SECTION 6.10 Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that
(1) such direction shall not (i) be in conflict with any
rule of law or with this Indenture, (ii) expose the Trustee to
personal liability, or (iii) be unduly prejudicial to Holders not
joining therein, and
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
SECTION 6.11 Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Securities of any series may on behalf of the Holders of
all the Securities of such series waive any past default hereunder with
respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any)
or interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the consent
of the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 6.12 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee,
but will suffer and permit the execution of every such power as though no
such law had been enacted.
SECTION 6.13 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee
for any action taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Holder,
or group of Holders, holding in the aggregate more than ten percent in
principal amount of the Outstanding Securities, or to any suit instituted
by any Holder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security on or after the respective
Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
SECTION 6.14 Judgment Currency.
The following provisions of this Section 6.15 shall apply to the
extent permissible under applicable law: Judgments in respect of any
obligations of the Company under any Securities or Coupons, if any, of any
series shall be rendered in the currency or currency unit in which such
Securities or Coupons are payable. If for the purpose of obtaining a
judgment in any court with respect to any obligation of the Company
hereunder or under any Security or Coupon, it shall become necessary to
convert into any other currency or currency unit any amount in the currency
or currency unit due hereunder or under such Security or Coupon, then such
conversion shall be made at the Conversion Rate (as defined below) as in
effect on the date the Company shall make payment to any person in
satisfaction of such judgment. If pursuant to any such judgment,
conversion shall be made on a date other than the date payment is made and
there shall occur a change between such Conversion Rate and the Conversion
Rate as in effect on the date of payment, the Company agrees to pay such
additional amounts (if any) as may be necessary to ensure that the amount
paid is the amount in such other currency or currency unit which, when
converted at the Conversion Rate as in effect on the date of payment or
distribution, is the amount then due hereunder or under such Security or
Coupon. Any amount due from the Company under this Section 6.15 shall be
due as a separate debt and is not to be affected by or merged into any
judgment being obtained for any other sums due hereunder or in respect of
any Security or Coupon so that in any event the Company's obligations
hereunder or under such Security or Coupon will be effectively maintained
as obligations in such currency or currency unit. In no event, however,
shall the Company be required to pay more in the currency or currency unit
due hereunder or under such Security or Coupon at the Conversion Rate as in
effect when payment is made than the amount of currency or currency unit
stated to be due hereunder or under such Security or Coupon.
For purposes of this Section 6.15, "Conversion Rate" shall mean
the spot rate at which in accordance with normal banking procedures the
currency or currency unit into which an amount due hereunder or under any
Security or Coupon is to be converted could be purchased with the currency
or currency unit due hereunder or under any Security or Coupon, at the
option of the Company from major banks located in the Cities of New York or
London or any other principal market for such purchased currency or
currency unit.
ARTICLE VII
THE TRUSTEE
SECTION 7.01 Certain Rights of Trustee.
(1) Except during the continuance of an Event of Default,
(A) the Trustee may rely, in the absence of bad faith on its part, as to
the truth of the statements and the correctness of the opinions expressed
therein, and shall be protected in acting or refraining from acting, upon
any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document furnished to the
Trustee and believed by the Trustee to be genuine and to have been signed
or presented by the proper party or parties, but, in the case of any such
papers or documents which by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture and (B) the Trustee undertakes to perform
such duties and only such duties as are specifically set forth in the
Indenture and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
(2) Any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution.
(3) Whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate.
(4) The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(5) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction.
(6) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney.
(7) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(8) The Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(9) If an Event of Default has occurred and is continuing,
the Trustee shall exercise its rights and powers and use the same degree of
care and skill in their exercise as a prudent person would exercise in the
conduct of his or her own affairs.
(10) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that the
Trustee shall not be liable for any error of judgment made in good faith by
a Responsible Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts.
(11) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of a majority in principal amount
of the Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, under this
Indenture.
(12) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 7.01.
SECTION 7.02 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall not
be accountable for the use or application by the Company of Securities or
the proceeds thereof.
SECTION 7.03 May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar or any
other agent of the Company, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with the
Company with the same rights it would have if it were not Trustee, Paying
Agent, Security Registrar or such other agent.
SECTION 7.04 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The
Trustee shall be under no liability for interest on any money received by
it hereunder except as otherwise agreed with the Company.
SECTION 7.05 Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder as agreed to by
the Company and the Trustee (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of
an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise of performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee (but only upon
such property and funds collected in its capacity as Trustee under this
Indenture), except funds held in trust for the payment of principal of (and
premium, if any) or interest on particular Securities.
SECTION 7.06 Resignation and Removal; Appointment of Successor.
(1) The Trustee may resign at any time with respect to the
Securities of one or more series by giving 30 days written notice thereof
to the Company. If the instrument of acceptance by a successor Trustee
required by Section 7.07 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(2) The Trustee may be removed at any time with respect to
the Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series, delivered to
the Trustee and to the Company.
(3) If at any time:
(A) the Trustee shall fail to comply with Section
3.10(b) of the Trust Indenture Act after written request therefor
by the Company or by any Holder who has been a bona fide Holder
of a Security for at least six months, or
(B) the Trustee shall cease to be eligible under
Section 3.10(a) of the Trust Indenture Act and shall fail to
resign after written request therefor by the Company or by any
such Holder, or
(C) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or
of its property shall be appointed or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may
remove the Trustee with respect to all Securities, or (ii) any Holder
who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee
with respect to all Securities and the appointment of a successor
Trustee or Trustees.
(4) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any
cause, with respect to the Securities of one or more series: the Company,
by a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to
the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of
Section 7.07. Within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series may be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of
such series delivered to the Company and the retiring Trustee. The
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 7.07,
become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and
accepted appointment in the manner required by Section 7.07, any Holder who
has been a bona fide Holder of a Security of such series for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
(5) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of
any series in the manner provided in Section 1.06. Each notice shall
include the name of the successor Trustee with respect to the Securities of
such series and the address of its Corporate Trust Office.
SECTION 7.07 Acceptance of Appointment by Successor.
(1) In case of the appointment hereunder of a successor
Trustee with respect to any series of Securities, every such successor
Trustee so appointed shall execute, acknowledge and deliver to the Company
and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(2) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series,
the Company, the retiring Trustee and each successor Trustee with respect
to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept
such appointment and which (i) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (ii) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series as to which the retiring Trustee
is not retiring shall continue to be vested in the retiring Trustee, and
(iii) shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such Trustees co-
trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or removal of
the retiring Trustee shall become effective to the extent provided therein
and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates;
but, on request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates.
(3) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting
in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (1) or (2) of this Section, as the case may
be.
(4) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee shall be
qualified and eligible under the Trust Indenture Act.
SECTION 7.08 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper
or any further act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities.
SECTION 7.09 Reports by Trustee.
Within 60 days after May 15 of each year commencing with the
first May 15 after the first issuance of Securities pursuant to this
Indenture, the Trustee shall transmit by mail to all Holders of Securities
as provided in Trust Indenture Act Section 313(c) a brief report dated as
of such May 15 in accordance with and to the extent required under Trust
Indenture Act Section 313(a).
SECTION 7.10 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such
and has a combined capital and surplus of at least $50,000,000. If such
Person publishes reports of condition at least annually, pursuant to law or
to the requirements of a supervising or examining authority, then for the
purposes of this Section 7.10, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth
in its more recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinbefore specified in this Article Seven.
SECTION 7.11 Notice of Events of Default.
The Trustee shall give the Holders of any series of Securities
notice in writing of any Event of Default with respect to Securities of
such series as and to the extent provided by the Trust Indenture Act.
SECTION 7.12 Disqualification; Conflicting Interests.
The Trustee shall comply with the terms of Section 310(b) of the
Trust Indenture Act.
ARTICLE VIII
CONSOLIDATION, MERGER OR SALE
SECTION 8.01 Consolidation, Merger or Sale.
Subject to the provisions of Section 8.03, nothing contained in
this Indenture or in any of the Securities shall prevent any consolidation
or merger of the Company with or into any other corporation or corporations
(whether or not affiliated with the Company), or successive consolidations
or mergers in which the Company or its successor or successors shall be a
party or parties, or shall prevent any sale, conveyance or lease of all or
substantially all the property of the Company to any other corporation
(whether or not affiliated with the Company) authorized to acquire and
operate the same; provided, however, and the Company hereby covenants and
agrees, that any such consolidation, merger, sale, conveyance or lease
shall be upon the conditions that (a) the corporation (if other than the
Company) formed by or surviving any such consolidation or merger, or to
which such sale, conveyance or lease shall have been made, shall be a
corporation organized under the laws of the United States, any State
thereof or the District of Columbia; (b) the due and punctual payment of
the principal of, premium, if any and interest, if any, on all the
Securities and Coupons, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Company, shall be expressly assumed and
the conversion rights, if any, shall be provided for in accordance with
Article IV, by supplemental indenture satisfactory in form to the Trustee
executed and delivered to the Trustee, by the corporation (if other than
the Company) formed by such consolidation, or into which the Company shall
have been merged, or by the corporation which shall have acquired or leased
such property; and (c) immediately after giving effect to such transaction,
no Event of Default, and no event which after notice or lapse of time or
both would become an Event of Default, shall have happened and be
continuing.
SECTION 8.02 Successor Corporation to Be Substituted.
In case of any such consolidation, merger, sale, conveyance or
lease and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form
to the Trustee, of the due and punctual payment of the principal of and
interest, if any, on all of the Securities and the due and punctual
performance of all the covenants and conditions of this Indenture to be
performed by the Company, such successor corporation shall succeed to and
be substituted for the Company, with the same effect as if it had been
named herein as the party of the first part, and the Company (including any
intervening successor to the Company which shall have become the obligor
hereunder) shall, except in the case of a lease, be relieved of any further
obligation under this Indenture and the Securities; provided, however, that
in the case of a sale or conveyance of the property of the Company
(including any such intervening successor) in connection with which there
is not a plan providing for the complete liquidation of the Company
(including any such intervening successor), the Company (including any such
intervening successor) shall continue to be liable on (a) its obligations
under this Indenture and the Securities to the extent of liability to pay
the principal of and interest, if any, on the Securities at the time,
places and rate prescribed in this Indenture and the Securities and (b)
obligations the Company may have under a supplemental indenture pursuant to
Section 4.05. Such successor corporation thereupon may cause to be signed,
and may issue either in its own name or in the name of the Company, any or
all of the Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the
order of such successor corporation instead of the Company and subject to
all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Securities which
previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to
the Trustee for that purpose. All the Securities so issued shall in all
respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Securities had been issued at the date
of the initial issuance of the Securities of such series.
In case of any such consolidation, merger, sale, conveyance or
lease such changes in phraseology and form (but not in substance) may be
made in the Securities thereafter to be issued, as may be appropriate and
consented to by the Trustee.
SECTION 8.03 Securities to Be Secured in Certain Events.
If, upon any consolidation or merger or sale, conveyance or lease
to which Section 8.02 applies, or upon any acquisition by the Company by
purchase or otherwise of all or any part of the properties of any other
Person, any Principal Property or shares of stock or evidences of
indebtedness of a Subsidiary owned by the Company or a Subsidiary
immediately prior thereto would thereupon become subject to any mortgage,
security interest, pledge, lien or encumbrance to secure indebtedness for
money borrowed by any Person (which indebtedness shall be deemed to be
Secured Debt of the Company for purposes of the last paragraph of Section
10.09), the Company, immediately prior to such consolidation, merger, sale,
conveyance, lease or acquisition will, unless the incurrence of such
Secured Debt is permitted by Section 10.09, by indenture supplemental
hereto secure the due and punctual payment of the principal of, premium, if
any, and interest, if any, on the Securities then Outstanding (equally and
ratably with any other indebtedness entitled thereto immediately following
such transaction).
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized
by a Board Resolution, and the Trustee, at any time and from time to time,
may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the covenants
of the Company contained herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit
of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for the benefit of such series) or to surrender any right or
power herein conferred upon the Company; or
(3) to add any additional Events of Default with respect to
all or any series of Securities; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons or
to provide for uncertificated (commonly known as "book entry")
Securities on terms satisfactory in substance to the Trustee; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any
series as permitted by Sections 2.01 and 3.01; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 7.07(2); or
(9) if allowed without penalty under applicable laws and
regulations, to permit payment in the United States (including any of
the states and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction of principal,
premium, if any, or interest, if any, on Bearer Securities or Coupons,
if any; or
(10) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided such other
provision shall not adversely affect the interests of the Holders of
Securities of any series in any material respect; or
(11) to add to, delete from or revise the conditions,
limitations on the authorized amount, terms or purposes of issue,
authentication and delivery of the Securities, as herein set forth; or
(12) to make provision with respect to the conversion
rights of Holders pursuant to the requirements of Section 4.05.
SECTION 9.02 Supplemental Indentures with Consent of Holders.
With the consent of (i) the Holders of not less than a majority
in principal amount of the Outstanding Securities, or (ii) in case less
than all of the several series of Securities are affected by such addition,
change, elimination or modification, the Holders of not less than a
majority in principal amount of each series so affected by such
supplemental indenture voting as a single class, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board of Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce
the principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or reduce the amount of
the principal of an Original Issue Discount Security that would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 6.02, or change the coin or currency in which, or
delete any country from the Places of Payment (other than any such
country in which, in the good faith determination of the Board of
Directors, the functions to be performed in the Places of Payment in
such country are no longer practicably performable) in which, any
Securities or Coupons or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the
case of redemption or repurchase (in the case of Securities of a
series that are required to be repurchased by the Company as specified
pursuant to Section 3.01), on or after the Redemption Date or the
repurchase date, as applicable), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) change any obligation of the Company to maintain an
office or agency in the places and for the purposes specified in
Section 10.02, or
(4) modify any of the provisions of this Section 9.02,
Section 6.11, or Section 10.07, except to increase any such percentage
or to provide with respect to any particular series the right to
condition the effectiveness of any supplemental indenture as to that
series on the consent of the Holders of a specified percentage of the
aggregate principal amount of Outstanding Securities of such series
(which provision may be made pursuant to Section 3.01 without the
consent of any Holder) or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent
of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the deletion of
this proviso, in accordance with the requirements of Sections 7.07(2)
and 9.01(8), or
(5) if applicable, make any change that adversely affects
the right to convert any Convertible Security or, except as provided
in this Indenture, decrease the conversion rate or increase the
conversion price of any Convertible Security.
For the purposes of this Section 9.02, if the Securities of any
series are issuable upon the exercise of warrants, any holder of an
unexercised and unexpired warrant with respect to such series shall not be
deemed to be a Holder of Outstanding Securities of such series in the
amount issuable upon the exercise of such warrants.
A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or
which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect
the rights under this Indenture of the Holders of Securities of any other
series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
SECTION 9.03 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may,
but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
SECTION 9.04 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
SECTION 9.05 Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in
effect.
SECTION 9.06 Reference in Securities to Supplemental Indentures.
Securities, including any Coupons, of any series authenticated
and delivered after the execution of any supplemental indenture pursuant to
this Article may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities
including any Coupons of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered
by the Trustee in exchange for Outstanding Securities including any Coupons
of such series.
ARTICLE X
COVENANTS
SECTION 10.01 Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series
of Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities of that series by
delivering said principal of (and premium, if any) and interest thereon in
immediately available funds to the Paying Agent no later than 10 a.m. New
York time on the Payment Date and otherwise in accordance with the terms of
the Securities and this Indenture.
The interest on Securities with Coupons appertaining thereto
shall be payable only upon presentation and surrender of the several
Coupons for such interest installments as are evidenced thereby as they
severally mature. The interest, if any, on any temporary Bearer Security
shall be paid, as to any installment of interest evidenced by a Coupon
attached thereto, only upon presentation and surrender of such Coupon and,
as to other installments of interest, only upon presentation of such
Security for notation thereon of the payment of such interest.
SECTION 10.02 Maintenance of Office or Agency.
If Securities of a series are issued as Registered Securities,
the Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities and Coupons, if any, of
that series may be presented or surrendered for payment, where securities
of that series may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. If Securities
of a series are issuable as Bearer Securities, the Company will maintain,
(A) subject to any laws or regulations applicable thereto, an office or
agency in a Place of Payment for that series which is located outside the
United States, where Securities of that series and related coupons may be
presented and surrendered for payment; provided, however, that if the
Securities of that series are listed on The International Stock Exchange of
the United Kingdom and the Republic of Ireland Limited, the Luxembourg
Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company will maintain
a Paying Agent for the Securities of that series in London, Luxembourg or
any other required city located outside the United States, as the case may
be, so long as the Securities of that series are listed on such exchange,
and (B) subject to any laws or regulations applicable thereto, an office or
agency in a Place of Payment for that series located outside the United
States, where Securities of that series may be surrendered for exchange and
where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and any
change in the location, of any such office or agency. If Securities of a
series are issuable as Convertible Securities, the Company will maintain an
office or agency where such Securities may be presented for conversion
("Conversion Agent"). If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
No payment of principal or interest on Bearer Securities shall be
made at any office or agency of the Company in the United States, by check
mailed to any address in the United States, by transfer to an account
located in the United States or upon presentation or surrender in the
United States of a Bearer Security or coupon for payment, even if the
payment would be credited to an account located outside the United States;
provided, however, that, if the Securities of a series are denominated and
payable in Dollars, payment of principal of and any interest on any such
Bearer Security may be made at the office of the Company's Paying Agent in
the Borough of Manhattan, the City of New York, New York if (but only if)
payment in Dollars of the full amount of such principal, interest or
additional amounts, as the case may be, at all offices or agencies outside
the United States maintained for the purpose by the Company in accordance
with this Indenture is illegal or effectively precluded by exchange
controls or other similar restrictions.
The Company may also from time to time designate one or more
other offices or agencies where the Securities (including any Coupons, if
any) of one or more series may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations;
provided, however, that no such designation or recession shall in any
manner relieve the Company of its obligation to maintain an office or
agency in each Place of Payment for Securities (including any Coupons, if
any) of any series for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
SECTION 10.03 Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Securities
of that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest on Securities of that
series in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as
herein provided;
(2) give the Trustee notice of any default by the Company
(or any other obligor upon the Securities of that series) in the
making of any payment of principal (and premium, if any) or interest
on the Securities; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Security of any series and remaining
unclaimed for three years after such principal (and premium, if any) or
interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security and Coupon, if any, shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in the City of New York or mail to each such Holder or
both, or, if a Registered Security, cause to be mailed to such Holder,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 10.04 Maintenance of Properties and Corporate Existence.
The Company shall, and shall cause each of its Subsidiaries to,
(a) maintain its properties and assets used or useful in its business in
good working order and condition and make all necessary repairs, renewals,
replacements, additions, betterments and improvements thereto; (b) maintain
with financially sound and reputable insurers such insurance as may be
required by law and such other insurance, to such extent and against such
hazards and liabilities, as is customarily maintained by companies
similarly situated; and (c) keep books of records and accounts reflecting
all of its business affairs and transactions in accordance with sound
business practices, and reflect in its financial statements adequate
accruals and reserves, all in accordance with generally accepted accounting
principles.
Subject to Article VIII, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence, rights (charter and statutory) and franchises and
those of its Subsidiaries; provided, however, that the Company shall not be
required to preserve or cause to be preserved any such right or franchise
if the Board of Directors shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the Company and that
the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 10.05 Statements as to Compliance
The Company will deliver to the Trustee, within 105 days after
the end of each fiscal year (which on the date hereof ends on the last
Sunday in each calendar year) of the Company, a certificate from the
principal executive officer, principal financial officer or principal
accounting officer stating whether or not the signer knows of any default
by the Company in the performance or observance of any of the terms,
provisions or conditions hereof. If such signer knows of such a default,
the certificate shall describe the default. For purposes of this Section
10.05, such compliance shall be determined without regard to any period of
grace or requirement of notice under this Indenture.
SECTION 10.06 Commission Reports.
The Company shall file with the Trustee, within 15 days after it
files them with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any
of the foregoing as the Commission may by rules and regulations prescribe)
which the Company may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended. So
long as the Securities remain outstanding, the Company shall cause any
annual or quarterly or other financial reports furnished by it to
shareholders to be mailed to the Holders at their addresses appearing in
the Security Register.
SECTION 10.07 Waiver of Covenant.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in Sections 10.09 and 10.10, if
before the time for such compliance the Holders of (i) a majority in
principal amount of the Outstanding Securities or (ii) in case less than
all of the several series of Securities then Outstanding are affected by
the omission, at least a majority in principal amount of the Outstanding
Securities of each series so affected voting as a single class shall, by
Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no
such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the
Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
SECTION 10.08 Additional Instruments and Acts.
Upon request by the Trustee, the Company will execute and deliver
such additional instruments and take such action as may be reasonably
necessary or proper to carry out more fully the purposes of this Indenture.
SECTION 10.09 Restriction on Creation of Liens
The Company shall not at any time create, incur, assume or
guarantee, and shall not cause, suffer or permit a Subsidiary to create,
incur, assume or guarantee, any Secured Debt without making effective
provision (and the Company covenants that in such case it will make or
cause to be made such effective provision) whereby the Securities then
Outstanding and any other indebtedness of or guaranteed by the Company or
such Subsidiary then entitled thereto, subject to applicable priorities of
payment among such other indebtedness, shall be secured by the mortgage,
security interest, pledge, lien or encumbrance relating to such Secured
Debt equally and ratably with or, at the option of the Company, prior to,
any and all other obligations and indebtedness thereby secured, so long as
any such other obligations and indebtedness shall be so secured; provided,
however, that the foregoing covenants shall not be applicable to the
following:
(1)(i) Any mortgage, security interest, pledge, lien or
encumbrance on any property hereafter acquired (including acquisition
through merger or consolidation), improved or constructed by the Company or
a Subsidiary and created contemporaneously with, or within 180 days after,
such acquisition (or, in the case of property constructed or improved,
within 180 days after the completion and commencement of commercial
operation of such property) to secure or provide for the payment of all or
any part of the purchase price of such property or the cost of the
construction thereof, as the case may be; or (ii) the acquisition of
property subject to any mortgage, security interest, pledge, lien or
encumbrance upon such property existing at the time of the acquisition
thereof, whether or not assumed by the Company or such Subsidiary; or (iii)
any mortgage, security interest, pledge, lien or encumbrance existing on
the property or on the outstanding shares or indebtedness of a corporation
at the time such corporation shall become a Subsidiary (but not created in
anticipation of the transaction in which such corporation shall become a
Subsidiary); or (iv) any mortgage, security interest, pledge, lien or
encumbrance on the property, shares or indebtedness of a corporation
existing at the time such corporation is merged into or consolidated with
the Company or a Subsidiary or at the time of a sale, lease or other
disposition of the properties of a corporation or firm as an entirety or
substantially as an entirety to the Company or a Subsidiary (but not
created in anticipation of such transaction); or
(2) Any mortgage, security interest, pledge, lien or encumbrance
on property of the Company or a Subsidiary in favor of the United States or
any State thereof or any foreign government, or any department, agency or
instrumentality or political subdivision of any thereof, to secure partial,
progress, advance or other payments pursuant to any contract or statute or
to secure any indebtedness incurred for the purpose of financing all or any
part of the purchase price or the cost of construction of the property
subject to such mortgages; or
(3) Any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any mortgage,
security interest, pledge, lien, encumbrance or Secured Debt referred to in
the foregoing subparagraphs (1) and (2); provided, however, that the
principal amount of Secured Debt secured thereby shall not exceed the
principal amount outstanding at the time of such extension, renewal or
replacement, and that such extension, renewal or replacement shall be
limited to the property which secured the mortgage, security interest,
pledge, lien or encumbrance so extended, renewal or replaced.
Notwithstanding the foregoing provisions of this Section 10.09,
the Company and any one or more Subsidiaries may create, incur, assume or
guarantee Secured Debt (including pursuant to a transaction to which
Section 8.03 applies) not otherwise permitted or excepted without equally
and ratably securing the Securities to the extent that the sum of (i) the
amount of all Secured Debt then outstanding (other than Secured Debt
referred to in subparagraphs (1), (2) and (3) above and Secured Debt deemed
outstanding under Section 8.03 in connection with which the Company secures
obligations on the Securities then outstanding in accordance with the
provisions of Section 8.03) after giving effect thereto plus (ii) the
amount of Attributable Debt in respect of Sale and Leaseback Transactions
(other than Sale and Leaseback Transactions in respect of which amounts
equal to the Attributable Debt relating to the transactions shall have been
applied, within 180 days after the effective date of such Sale and
Leaseback Transaction, to the prepayment or retirement of Securities or
other indebtedness for borrowed money which was recorded as Funded Debt, as
of the date of its creation, of the Company or a Subsidiary and which, in
the case of such indebtedness of the Company, is not subordinate and junior
in right of payment to the Securities and Sale and Leaseback Transactions
in which the property involved would have been permitted to be subjected to
a mortgage, security interest, pledge, lien or encumbrance pursuant to
subparagraphs (1) through (3)) above does not at the time exceed the
greater of ten percent of Consolidated Net Tangible Assets or $100,000,000.
SECTION 10.10 Restrictions on Sale and Leaseback Transactions.
The Company shall not, and will not cause, suffer or permit any
Subsidiary to, enter into any Sale and Leaseback Transaction of any
Principal Property unless at the effective time of such Sale and Leaseback
Transaction (a) the Company or such Subsidiary would be entitled, without
equally and ratably securing the Securities, to incur Secured Debt secured
by a mortgage or security interest on the Principal Property to be leased
pursuant to Section 10.09 above, or (b) the Company or such Subsidiary
would be entitled, without equally and ratably securing the Securities, to
incur Secured Debt in an amount at least equal to the Attributable Debt in
respect of such Sale and Leaseback Transaction, or (c) the Company shall
apply an amount equal to such Attributable Debt, within 180 days after the
effective date of such Sale and Leaseback Transaction, to the prepayment or
retirement of Securities or other indebtedness for borrowed money which was
recorded as Funded Debt as of the date of its creation and which, in the
case of such indebtedness of the Company, is not subordinate and junior in
right of payment to the prior payment of the Securities or the prepayment
or retirement of any mortgage, lien or other security interest in such
Principal Property existing prior to such Sale and Leaseback Transaction;
provided, however, that the amount to be so applied to the retirement of
such indebtedness shall be reduced by (i) the aggregate principal amount of
any Securities delivered within 180 days of the effective date of any such
Sale and Leaseback Transaction to the Trustee for retirement and
cancellation, and (ii) the aggregate principal amount of such indebtedness
(other than the Securities) retired by the Company or a Subsidiary within
180 days of the effective date of any such Sale and Leaseback Transaction.
SECTION 10.11 Names and Addresses of Holders.
The Company shall furnish of cause to be furnished to the Trustee
(a) not more than 15 days after each Regular Record Date as defined in
Section 1.01 but in any event not less frequently than semi-annually, a
list in such form as the Trustee may reasonably require, containing all the
information in the possession or control of the Company or any of its
Paying Agents other than the Trustee, as to the names and addresses of the
Holders of Securities to which such Regular Record Date applies as of such
Regular Record Date, and (b) at such other times as the Trustee may request
in writing, within 30 days after receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished, provided no such list need
be furnished if the Trustee shall be the Security Registrar.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.01 Applicability of Article.
Securities (including Coupons, if any) of any series which are
redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by
Section 3.01 for Securities of any series) in accordance with this Article.
SECTION 11.02 Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities (including
Coupons, if any) shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company of all or less than all of the
Securities (including Coupons, if any) of any series, the Company shall, at
least 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date and of the principal amount of Securities of such
series to be redeemed. In the case of any redemption of Securities
(including Coupons, if any) prior to the expiration of any restriction on
such redemption provided in the terms of such Securities and Coupons, if
any, or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officers' Certificate evidencing compliance with such restriction.
SECTION 11.03 Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities (including Coupons, if any) of
any series with the same terms are to be redeemed, the particular
Securities (including Coupons, if any) to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities (including Coupons, if any) of such series not
previously called for redemption, by lot or any other such method as the
Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities (including Coupons, if any) of that series or
any integral multiple thereof) of the principal amount of Securities
(including Coupons, if any) of such series of a denomination larger than
the minimum authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company in writing of the
Securities (including Coupons, if any) selected for redemption and, in the
case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 11.04 Notice of Redemption.
Notice of redemption shall be given not less than 15 nor more
than 60 days prior to the Redemption Date, to each Holder of Securities to
be redeemed, as provided in Section 1.06.
Each such notice of redemption shall specify the Redemption Date,
the Redemption Price, the Place or Places of Payment, that the Securities
of such series are being redeemed at the option of the Company pursuant to
provisions contained in the terms of the Securities of such series or in a
supplemental indenture establishing such series, if such be the case,
together with a brief statement of the facts permitting such redemption,
that payment will be made upon presentation and surrender of the applicable
Securities, that all Coupons, if any, maturing subsequent to the date fixed
for redemption shall be void, that any interest accrued to the Redemption
Date will be paid as specified in said notice, that on and after said
Redemption Date any interest thereon or, in case of partial redemptions, on
the portions thereof to be redeemed, will cease to accrue, and, if
applicable, that on or after said Redemption Date such Securities will
cease to be convertible into Common Stock. If less than all the Securities
of any series are to be redeemed the notice of redemption shall specify the
numbers of the Securities of such series to be redeemed, and, if only
Bearer Securities of any series are to be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities, the last date on
which exchanges of Bearer Securities for Registered Securities not subject
to redemption may be made. In case any Security of any series is to be
redeemed in part only, the notice of redemption shall state the portion of
the principal amount thereof to be redeemed and shall state that on and
after the Redemption Date, upon surrender of such Security and any Coupons
appertaining thereto, a new Security or Securities of such series in
principal amount equal to the unredeemed portion thereof and with
appropriate Coupons will be issued, or, in the case of Registered
Securities providing appropriate space for such notation, at the option of
the Holders, the Trustee, in lieu of delivering a new Security or
Securities as aforesaid, may make a notation on such Security of the
payment of the redeemed portion thereof.
Notice of redemption of Securities and Coupons, if any, to be
redeemed at the election of the Company shall be given by the Company or,
at the Company's request, by the Trustee in the name and at the expense of
the Company.
SECTION 11.05 Deposit of Redemption Price.
On or before 10 a.m. New York time on (but in the case of
payments to be made at a Place of Payment outside of the United States, its
territories, possessions and areas subject to its jurisdiction, at least
one New York Business Day before) any Redemption Date, the Company shall
deposit in immediately available funds with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and
hold in trust as provided in Section 10.03) an amount of money in the
relevant currency (or a sufficient number of currency units, as the case
may be) sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities which are to be redeemed on that date.
SECTION 11.06 Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such
date (unless the Company shall default in the payment of the Redemption
Price and accrued interest) such Securities shall cease to bear interest
and, if applicable, shall cease to be convertible into Common Stock.
Except as provided in the next succeeding paragraph, upon surrender of any
such Security (including Coupons, if any) for redemption in accordance with
said notice, such Security shall be paid by the Company at the Redemption
Price, together with accrued interest to the Redemption Date; provided,
however, that installments of interest on Registered Securities whose
Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 3.07.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant Coupons maturing after the Redemption Date,
such Bearer Security may be paid after deducting from the Redemption Price
an amount equal to the face amount of all such missing Coupons, or the
surrender of such missing Coupon or Coupons may be waived by the Company
and the Trustee if there be furnished to them such security or indemnity as
they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Bearer Security shall surrender to the
Trustee or any Paying Agent any such missing Coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall
be entitled to receive the amount so deducted; provided, however, that
interest represented by Coupons shall be payable only upon presentation and
surrender of those Coupons at an office or agency located outside of the
United States except as otherwise provided pursuant to Section 9.01(9).
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall
, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security and, if applicable, such Security shall remain
convertible into common Stock until the principal of such Security shall
have been paid or duly provided for.
SECTION 11.07 Securities Redeemed in Part.
Any Security (including Coupons, if any) which is to be redeemed
only in part shall be surrendered at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee
duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities (with appropriate Coupons, if any, attached) of the
same series, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security (including Coupons, if any) so
surrendered.
ARTICLE XII
SINKING FUNDS
SECTION 12.01 Applicability of Article.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 3.01 for Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount
provided for by the terms of Securities of any series is herein referred to
as an "optional sinking fund payment." If provided for by the terms of
Securities of any series, the cash amount of any sinking fund payment may
be subject to reduction as provided in Section 12.02. Each sinking fund
payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.
SECTION 12.02 Satisfaction of Sinking Fund Payments with Securities.
The Company (a) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (b) may apply as a
credit Securities of a series which have been acquired or redeemed either
at the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments
pursuant to the terms of such Securities, in each case in satisfaction of
all or any part of any sinking fund payment with respect to the Securities
of such series required to be made pursuant to the terms of such Securities
as provided for by the terms of such series; provided that such Securities
have not been previously so credited. Such Securities shall be received
and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 12.03 Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for
any series of Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking
fund payment for that series pursuant to the terms of that series, the
portion thereof, if any, which is to be satisfied by payment of cash and
the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of that series pursuant to Section 12.02 and will also
deliver to the Trustee any Securities to be so delivered. Not less than 15
nor more than 60 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 11.03 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.04. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms
and in the manner stated in Sections 11.06 and 11.07.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the day and year first above written.
HASBRO, INC.
By:_____________________________
Name:
Title:
[ ],
as Trustee
By:______________________________
Name:
Title:
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Hasbro, Inc.:
We consent to use of our reports included or incorporated by reference in
the Hasbro, Inc. Annual Report on Form 10-K for the fiscal year ended
December 27, 1998, which is incorporated by reference herein, and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
Providence, Rhode Island
June 29, 1999
