As filed with the Securities and Exchange Commission on April 14, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Registration Statement
On
FORM S-3
UNDER
THE SECURITIES ACT OF 1933
OAK INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Delaware 36-1569000
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1000 Winter Street
Waltham, Massachusetts 02154
(781) 890-0400
(Address, including zip code, telephone number, including area code, of
registrant's principal executive offices)
Mela Lew, Esq.
Vice President, General Counsel and Secretary
Oak Industries Inc.
1000 Winter Street
Waltham, MA 02154
(781) 890-0400
(Name, address, including zip code, telephone number, including area
code, of agent for service)
Copies to:
David C. Chapin, Esq.
Ropes and Gray
One International Place
Boston, Massachusetts 02110
(617) 951-7000
Approximate date of commencement of proposed sale to the public: From
time to time after the Registration Statement becomes effective.
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. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each Amount Proposed Proposed Amount of
Class of Securities to be Maximum Maximum Registration
to be Registered Registered Offering Price Aggregate Fee
Per Unit Offering Price
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
4 7/8% Convertible
Subordinated
Notes Due 2008 $100,000,000 100%(1) $100,000,000(1) $29,500
Common Stock,
$.01 par value
per share........ 2,586,900(2) ---- --- None(3)
<FN>
(1) Estimated solely for purposes of calculating the registration fee.
(2) Plus such additional indeterminate number of shares as may become
issuable upon conversion of the Notes being registered hereunder as a
result of adjustments to the conversion price.
(3) Pursuant to Rule 457(i) there is no filing fee with respect to the
shares of Common Stock issuable upon conversion of the Notes because no
additional consideration will be received in connection with the exercise
of the conversion privilege.
</TABLE>
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.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such state.
SUBJECT TO COMPLETION, DATED APRIL 14, 1998
PROSPECTUS
$100,000,000
Oak Industries Inc.
4 7/8% Convertible Subordinated Notes due 2008
Interest Payable March 1 and September 1
2,586,900 Shares of Common Stock
This Prospectus relates to $100,000,000 aggregate principal amount of 4 7/8%
Convertible Subordinated Notes due 2008 (the "Notes") of Oak Industries
Inc., a Delaware corporation (together with its consolidated subsidiaries,
"Oak" or the "Company"), and 2,586,900 shares of common stock, par value
$.01 per share of the Company (the "Common Stock"), which are initially
issuable upon conversion of the Notes plus such additional indeterminate
number of shares of Common Stock as may become issuable upon conversion of
the Notes as a result of adjustments to the conversion price (the
"Shares"). The Notes and the Shares that are being registered hereby are
to be offered for the account of the holders thereof (the "Selling
Securityholders"). The Notes were originally issued and sold by the
Company in February 1998 to Donaldson, Lufkin and Jenrette Securities
Corporation, Lehman Brothers and Cowen and Company (the "Initial
Purchasers") in a private placement.
The Notes are convertible at the option of the holder into Common Stock at
or before maturity, unless previously redeemed or repurchased, at a
conversion rate of 25.869 shares per $1,000 principal amount of Notes
(equivalent to a conversion price of $38.66 per share (the "Conversion
Price")), subject to adjustment in certain events. See "Description of
Notes-Conversion Rights." Interest on the Notes is payable semi-annually
in cash in arrears on March 1 and September 1 of each year, commencing on
September 1, 1998. On April 13, 1998, the last reported sale price of the
Common Stock on the New York Stock Exchange, where it trades under the
symbol "OAK," was $32.00 per share.
The Notes are redeemable, in whole or in part, at the option of the
Company, at any time on or after March 1, 2001 at the redemption prices set
forth in this Prospectus, plus accrued and unpaid interest and liquidated
damages, if any, to the date of redemption. The Company will be required
to offer to purchase the Notes upon a Change of Control (as defined herein)
at 100% of the principal amount thereof, plus accrued and unpaid interest
and liquidated damages, if any, to the date of purchase. There can be no
assurance that the Company will have available financial resources
necessary to repurchase the Notes in such circumstances.
The Notes are general unsecured obligations of the Company, subordinated in
right of payment to all existing and future Senior Indebtedness (as defined
herein). In addition, the Notes are structurally subordinated to all
liabilities (including trade payables) of the Company's subsidiaries. The
Indenture (as defined herein) does not restrict the incurrence of Senior
Indebtedness or other indebtedness by the Company or its subsidiaries. At
December 31, 1997, on a pro forma as adjusted basis, after giving effect
to the sale of the Notes to the Initial Purchasers and the use of the
proceeds therefrom, the Company and its subsidiaries would have had
approximately $58.4 million of Senior Indebtedness. In addition, as of
such date and after giving effect to the sale of the Notes to the Initial
Purchasers, the Company had available borrowing capacity of approximately
$189.3 million (subject to customary borrowing conditions) under its
existing revolving credit facility (the "Credit Facility"). Indebtedness
under the Credit Facility constitutes Senior Indebtedness. See
"Description of Notes."
The Notes and the Shares are being registered to permit public secondary
trading of the Notes and, upon conversion, the underlying Common Stock, by
the holders thereof from time to time after the date of this Prospectus.
The Company has agreed, among other things, to bear all expenses (other
than underwriting discounts and selling commissions) in connection with the
registration and sale of the Notes and the underlying Common Stock covered
by this Prospectus.
The Notes are eligible for trading in the Private Offerings, Resales and
Trading through Automated Linkages ("PORTAL") Market of the National
Association of Securities Dealers, Inc. The Initial Purchasers have
advised the Company that they are currently making a market in the Notes.
The Initial Purchasers, however, are not obligated to do so and any such
market making may be discontinued at any time without notice, in the sole
discretion of the Initial Purchasers. No assurance can be given that any
market for the Notes will be maintained. See "Risk Factors- Absence of
Existing Market for Notes."
Although the Company received proceeds in connection with the initial
private placement of the Notes, the Company will not receive any of the
proceeds from the sale of any of the Notes or the Shares by the Selling
Securityholders hereunder. The Notes and the Shares may be offered in
negotiated transactions or otherwise, at market prices prevailing at the
time of sale or at negotiated prices. In addition, the Shares may be
offered from time to time through ordinary brokerage transactions on the
New York Stock Exchange. See "Plan of Distribution." The Selling
Securityholders may be deemed to be "Underwriters" as defined in the
Securities Act of 1933, as amended (the "Securities Act"). If any broker-
dealers are used by the Selling Securityholders, any commissions paid to
broker-dealers and, if broker-dealers purchase any Notes or Shares as
principals, any profits received by such broker-dealers on the resale of
the Notes or Shares, may be deemed to be underwriting discounts or
commissions under the Securities Act. In addition, any profits realized by
the Selling Securityholders may be deemed to be underwriting commissions.
See "Risk Factors" beginning on page 4 for a discussion of certain
factors that should be considered by prospective investors.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS ____________, 1998
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the
Commission. Reports, proxy statements and other information concerning the
Company can be inspected without charge at the Public Reference Room
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549. In addition, upon request, such
reports, proxy statements and other information will be made available for
inspection and copying at Seven World Trade Center, 13th Floor, New York,
New York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained at
prescribed rates upon request from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of
the above reports, proxy statements and other information may also be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005. Such material may also be obtained
electronically at the Commission's site on the World Wide Web located at
http://www.sec.gov.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS: ALL STATEMENTS OTHER THAN
STATEMENTS OF HISTORICAL FACT CONTAINED IN THIS PROSPECTUS, ARE FORWARD-
LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS IN THIS PROSPECTUS
GENERALLY ARE ACCOMPANIED BY WORDS SUCH AS "ANTICIPATE," "BELIEVE,"
"ESTIMATE" OR "EXPECT" OR SIMILAR STATEMENTS. ALTHOUGH THE COMPANY
BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS
ARE REASONABLE, NO ASSURANCE CAN BE GIVEN THAT SUCH EXPECTATIONS WILL PROVE
CORRECT. FACTORS THAT COULD CAUSE THE COMPANY'S RESULTS TO DIFFER
MATERIALLY FROM THE RESULTS DISCUSSED IN SUCH FORWARD-LOOKING STATEMENTS
ARE DISCLOSED IN THIS PROSPECTUS, INCLUDING WITHOUT LIMITATION IN
CONJUNCTION WITH THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROSPECTUS
AND UNDER "RISK FACTORS." ALL FORWARD-LOOKING STATEMENTS IN THIS
PROSPECTUS ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY
STATEMENTS IN THIS PARAGRAPH.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this Offering
Memorandum and shall be deemed to be a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, as amended by Form 10-K/A dated April 14, 1998.
2. The Company's Current Reports on Form 8-K dated February 12, 1998,
February 20, and February 25, 1998.
3. The description of the Company's Junior Preferred Stock Purchase
Rights contained in Item 1 of its Registration Statement on Form 8-A dated
December 27, 1995, as amended on June 4, 1996.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from
their respective dates of filing. Any statement contained herein or in any
document incorporated or deemed to be incorporated herein shall be deemed
to be modified or superseded for all purposes of this Prospectus to the
extent that a statement contained in this Prospectus or in any subsequently
filed document which also is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, upon written or oral request of such
person, a copy of any and all of the information that has been incorporated
by reference in this Prospectus (other than exhibits thereto, unless such
exhibits are specifically incorporated by reference into the information
that this Prospectus incorporates). Requests should be directed to Oak
Industries Inc., 1000 Winter Street, Waltham, MA 02154, Attention: Senior
Vice President and Chief Financial Officer (telephone number (781) 890-
0400).
THE COMPANY
The Company is a leading manufacturer of highly-engineered components that
it designs and sells to manufacturers and service providers in the
communications and selected other industries. The Company's communications
components consist primarily of connectors for the CATV industry, frequency
control devices used in base stations for wireless communications, and
fiber-optic components for the wired telephony infrastructure. The
Company's controls components include components for gas ranges, and
switches and encoders, which are used in a wide range of applications.
The Company's communications components group consists of Gilbert
Engineering Co., Inc. ("Gilbert"), Oak Frequency Control Group ("OFCG") and
Lasertron, Inc. ("Lasertron"). Gilbert is a leading worldwide manufacturer
of coaxial connectors for the CATV industry. OFCG is a leading supplier of
quartz-based crystals and oscillators for use in wireless, wired telephony,
military, satellite, and other communications applications. Lasertron
designs, manufactures and sells active fiber-optic components, including
lasers and detectors used in long distance fiber-optic telephone and other
networks.
The Company's controls components group includes Harper-Wyman Company
("Harper-Wyman") and OakGrigsby Inc. ("OakGrigsby"). Harper-Wyman is a
leading supplier of components to the original equipment manufacturers of
gas range appliances and also supplies components for outdoor gas grills.
OakGrigsby manufactures optical, rotary and appliance switches and encoders
for applications in the test and measurement, communications, medical,
military and other markets.
The Company was incorporated under the laws of the State of Delaware in
1960. The predecessor of the Company was incorporated in 1932 under the
laws of the State of Illinois. The present corporate name was adopted in
1972. The Company's executive offices are located at 1000 Winter Street,
Waltham, Massachusetts 02154, and its telephone number is (781) 890-0400.
RISK FACTORS
In addition to the other information contained and incorporated by
reference in this Prospectus, the following risk factors should be
considered carefully in evaluating the Company and its business before
making an investment in the Notes or the Shares offered hereby. This
Prospectus and the documents incorporated herein contain certain forward-
looking statements within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act, including, without limitation,
statements as to expectations, beliefs and strategies regarding the future,
which involve risks and uncertainties. Actual results could differ
materially from those projected or contemplated in the forward-looking
statements or historical results due to a number of factors, including,
among other things, the risk factors set forth below and elsewhere in this
Prospectus and the documents incorporated by reference herein.
Dependence on Capital Spending for Communications Infrastructure
A significant portion of the Company's revenues is attributable to sales of
components for building, maintaining and expanding the communications
infrastructure. These components are used primarily in cable, wireless and
wired telephony systems in the United States and internationally. The
amount of capital spending in these industries is affected by a variety of
factors, including general economic conditions, availability of financing,
government regulation, demand for the products and services offered by the
Company's customers and technological developments. A decrease in capital
spending for communications infrastructure could have a material adverse
effect on the Company's business, financial condition and results of
operations.
Customer Concentration
Certain of the Company's business units sell products to a concentrated
group of customers. The loss of, or reduced demand for products from, any
of the Company's major customers could have a material adverse effect on
the Company's business, financial condition and results of operations.
Fluctuations in Quarterly Operating Results
The Company's financial results have been, and are expected to continue to
be, subject to significant quarterly fluctuation. Such results vary
according to several factors, including the timing of significant customer
orders, changes in the mix of products sold by the Company and the
commencement or completion of projects to build or upgrade communications
infrastructure, particularly in international markets. In recent months,
certain Asian-Pacific currencies have suffered rapid devaluation and
certain Asian-Pacific financial markets have experienced valuation
adjustments. The Company sells to customers that do business worldwide and
cannot predict how the businesses of these customers may be affected by
economic conditions in Asia or elsewhere.
Competition/Rapid Technological Change
The communications industry is very competitive and is characterized by
rapid technological change, new product development, product obsolescence
and evolving product specification. Additionally, price competition in this
market is intense with significant erosion over the life cycle of a
product. The ability of the Company to compete successfully depends on the
continued introduction of new products and ongoing manufacturing cost
reductions. The Company believes that it will continue to see varying
degrees of price pressure across all product lines. These price pressures,
if not offset by cost reductions, could result in lower average gross
margins. The failure of the Company to develop new products or technologies
or expand into new markets could have a material adverse effect on the
Company's business, financial condition and results of operations.
Risks Associated with International Operations
The Company's international operations are subject to a variety of risks,
including changes in policy by foreign governments, social conditions such
as civil unrest, and economic conditions including high levels of
inflation, fluctuation in the value of foreign currencies and currency
exchange rates and trade restrictions or prohibitions. Such factors could
adversely affect the Company's international operations and have a material
adverse effect on the Company's business, financial condition and results
of operations.
Dependence on Sole Source Suppliers
The Company's subsidiaries currently buy a number of raw materials from
single sources. The failure of the Company to obtain sufficient raw
materials or components as required, or to develop alternative sources if
and as required in the future, could have a material adverse effect on the
Company's business, financial condition and results of operations.
Acquisition Strategy
An element of the Company's business strategy is to continue to pursue
acquisitions of complementary businesses, although there can be no
assurance that suitable acquisition candidates will be identified. Even if
additional acquisition candidates are identified, there can be no assurance
that the Company will be able to negotiate successfully the terms of any
such acquisition, finance such acquisition, or integrate such acquired
business, assets, products or technologies into the Company's existing
business. Further, acquisitions by the Company could result in potentially
dilutive issuances of equity securities, the incurrence of debt and
contingent liabilities and the amortization of goodwill and other acquired
assets. There can be no assurance that any acquisition would not have a
material adverse effect on the Company's business, financial condition and
results of operations.
Subordination
The Notes are subordinated in right of payment to all existing and future
Senior Indebtedness of the Company. The Indenture does not restrict the
incurrence of Senior Indebtedness or other indebtedness by the Company or
its subsidiaries. By reason of such subordination, in the event of the
insolvency, bankruptcy, liquidation, reorganization, dissolution or winding
up of the business of the Company, the assets of the Company will be
available to pay the amounts due on the Notes only after all Senior
Indebtedness has been paid in full and, therefore, there may not be
sufficient assets remaining to pay amounts due on any or all of the Notes
then outstanding. In addition, the Company is a holding company that
conducts its business primarily through its subsidiaries, and the holders
of the Notes have no direct claims against the Company's subsidiaries.
Therefore, the Notes are structurally subordinated to all liabilities,
including trade payables, of the Company's subsidiaries. The rights of the
holders of the Notes to participate in the assets of any subsidiary of the
Company upon such subsidiary's liquidation or recapitalization will be
subject to the prior claims of such subsidiary's creditors. The ability of
the Company's subsidiaries to make payments to the Company will also be
subject to, among other things, applicable state corporate laws and
contractual restrictions. The Indenture does not prohibit the Company's
subsidiaries from entering into agreements that restrict such subsidiaries
from making distributions or paying dividends to the Company. See
"Description of Notes-Subordination."
Government Regulations; Risks of Litigation
The Company's operations are subject to a variety of laws, regulations and
licensing requirements, including governmental regulations relating to the
environment. In addition, various pending or threatened legal proceedings
by or against the Company or one or more of its subsidiaries involve
alleged breaches of contract, torts and miscellaneous other causes of
action. The Company does not currently believe that its compliance with
applicable regulations or any litigation against the Company will have a
material adverse effect on the Company. However, there can be no assurance
that future compliance efforts or litigation will not have a material
adverse effect on the Company's business, financial condition and results
of operations.
Certain Anti-takeover Effects
The Restated Certificate of Incorporation of the Company, as amended (the
"Certificate"), the By-Laws of the Company, as amended (the "By-Laws"), the
Rights (as defined herein) and applicable provisions of the Delaware
General Corporation Law (the "DGCL"), contain various provisions that may
hinder, delay or prevent the acquisition of control of the Company without
the approval of the Board of Directors of the Company. Certain provisions
of the Certificate and the By-Laws, among other things, authorize the
issuance of "blank check" preferred stock and establish advance notice
requirements for director nominations. In addition, the Company has entered
into a Rights Agreement (as defined herein), pursuant to which each share
of Common Stock has attached one Right (as defined herein) which trade
together with such share. The Rights would cause substantial dilution to a
person or group that acquires more than 20% of the outstanding Common Stock
or attempts to acquire a majority of the outstanding Common Stock of the
Company in either case on terms not approved by the Board of Directors of
the Company. In addition, Section 203 of the DGCL imposes certain
restrictions on mergers and other business combinations between the Company
and any holder of 15% or more of the Company's Common Stock. See
"Description of Capital Stock-the Stockholder Rights Plan" and "Description
of Capital Stock-Delaware Law."
Possible Volatility of Stock Price
The market price of the Common Stock has been, and is expected to continue
to be, subject to significant fluctuations in response to the Company's
operating results, changes in earnings estimated by securities analysts or
the Company's ability to meet those estimates, publicity regarding the
communications industry and other factors, some of which may be beyond the
Company's control. There can be no assurance that the market price of the
Common Stock will not decline below the price at which the shares of the
Common Stock are currently being traded. In addition, the stock markets
have from time to time experienced extreme price and volume volatility.
These fluctuations may be unrelated to the operating performance of
particular companies whose shares are traded. Market fluctuations may
adversely affect the market price of the Company's Common Stock.
Limitations on Repurchase of Notes Upon Change of Control
Upon the occurrence of a Change of Control (as defined herein), the Company
will be required to offer to purchase the outstanding Notes. If a Change of
Control was to occur, there can be no assurance that the Company would have
sufficient financial resources, or would be able to arrange financing, to
pay for all Notes tendered by holders thereof. In addition, the Company's
repurchase of the Notes as a result of a Change of Control may be
prohibited or limited by, or create an event of default under, the terms of
agreements related to borrowings which the Company may enter into from time
to time. Failure of the Company to purchase tendered Notes would constitute
an Event of Default (as defined herein) under the Indenture. See
"Description of Notes-Repurchase of Notes at the Option of the Holder Upon
a Change of Control."
Absence of Existing Market for Notes
The Notes are eligible for trading through the PORTAL Market. Although the
Company has been advised by the Initial Purchasers that they are currently
making a market in the Notes, they are not obligated to do so and may
discontinue such market making at any time without notice. In addition,
such market making activity is subject to the limits imposed by the
Securities Act and the Exchange Act. Accordingly, there can be no
assurance that any market for the Notes will be maintained. If a trading
market is not maintained, holders of the Notes may experience difficulty in
reselling, or an inability to sell, the Notes. Future trading prices of
the Notes will depend on many factors, including, among other things,
prevailing interest rates, the Company's operating results and the market
for similar securities. Depending on prevailing interest rates, the market
for similar securities and other factors, including the financial condition
of the Company, the Notes may trade at a discount from their principal
amount.
Year 2000 Issues
The Company has completed an initial assessment of "Year 2000" issues at
each of its operating units and has identified a number of potential
problems and corrective actions required. Some of these actions have
already been, and others remain to be, completed. Based on this initial
assessment the Company concluded that Year 2000 issues at its facilities
should not have a material impact on its financial or operating
performance. Nonetheless, the Company is retaining qualified independent
consultants to review the Company's assessment and the corrective action
plans at the Company's operating units. Pending completion of this
additional review, and of all necessary corrective actions, it is not
possible for the Company to determine the extent of any difficulty it might
experience at its facilities as a result of Year 2000 issues. Such
problems, or similar problems at the Company's customers or suppliers,
could temporarily affect the Company's performance adversely.
Dividend Policy
The Company does not anticipate paying any cash dividends on the Common
Stock in the foreseeable future. In addition, the Credit Facility restricts
the payment of dividends by the Company except in certain limited
circumstances.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for each of the periods
indicated is as follows:
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges (a): 4.19x 7.00x --- (b) 9.49x 3.98x
</TABLE>
(a) For purposes of computating the ratio of earnings to fixed charges,
"earnings" consist of income from continuing operations before income
taxes, minority interest and extraordinary charges plus fixed charges.
"Fixed charges" consist of interest expense, amortization of deferred
financing costs and one-third of rental expense (the portion deemed
representative of the interest factor). The pro forma ratio of earnings to
fixed charges, after giving effect to the sale of the Notes and the use of
proceeds therefrom, would have been 4.39x for the year ended December 31,
1997.
(b) Earnings did not cover fixed charges by $30.9 million in 1995 due to
an $80.9 million non-cash charge for purchased in-process research and
development related to the Lasertron acquisition.
USE OF PROCEEDS
Although the Company received proceeds in connection with the initial
private placement of the Notes, the Company will not receive any of the
proceeds from the sale of the Notes or the Shares by the Selling
Securityholders.
DESCRIPTION OF NOTES
The Notes were issued pursuant to an indenture (the "Indenture") dated as
of February 25, 1998 between the Company and State Street Bank and Trust
Company, as trustee (the "Trustee"). The following summary of the Notes,
the Indenture and the Registration Rights Agreement (as defined herein)
(all of which have been filed with the Commission as Exhibits 4.3, 4.2 and
4.4, respectively, to the Registration Statement of which this Prospectus
is a part) does not purport to be complete and is subject to, and is
qualified in its entirety by, reference to all of the provisions of the
Indenture and the Registration Rights Agreement, including the definition
therein of certain terms. Copies of the Indenture and the Registration
Rights Agreement can be obtained from the Company upon request.
Capitalized terms used herein without definition have the meanings ascribed
to them in the Indenture or the Registration Rights Agreement, as
appropriate. Whenever particular provisions or defined terms of the
Indenture (or the form of Note which is part thereof) or the Registration
Rights Agreement are referred to in this summary, such provisions or
defined terms are incorporated by reference as a part of the statements
made and such statements are qualified in their entirety by such reference.
Certain definitions of terms used in the following summary are set forth
under "-Certain Definitions" below.
General
The Notes are general, unsecured obligations of the Company, limited in
aggregate principal amount to $100,000,000. The Notes are subordinated in
right of payment to all Senior Indebtedness, as described under "-
Subordination" below. The Notes have been issued only in fully registered
form, without coupons, in denominations of $1,000 and integral multiples
thereof.
The Notes will mature on March 1, 2008. The Notes bear interest at the rate
per annum stated on the cover page of this Prospectus from February 25,
1998, or from the most recent Interest Payment Date to which interest has
been paid or provided for, payable semi-annually in cash in arrears on
March 1 and September 1 of each year, commencing September 1, 1998, to the
persons in whose names such Notes will be registered at the close of
business on the February 15 and August 15 immediately preceding such
Interest Payment Date. Principal of, premium, if any, and interest on, and
liquidated damages with respect to, the Notes will be payable and the Notes
will be convertible and may be presented for registration of transfer or
exchange, at the office or agency of the Company maintained for such
purpose, which office or agency shall be maintained in the Borough of
Manhattan, the City of New York. Interest will be calculated on the basis
of a 360-day year consisting of twelve 30-day months.
At the option of the Company, payment of interest and liquidated damages
may be made by check mailed to the Holders of the Notes at the addresses
set forth upon the registry books of the Company. No service charge will be
made for any registration of transfer or exchange of Notes, but the Company
may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Until otherwise
designated by the Company, the Company's office or agency will be the
corporate trust office of the Trustee presently located in the Borough of
Manhattan, the City of New York.
The Indenture does not contain any financial covenants or any restrictions
on the payment of dividends, the repurchase of securities of the Company or
the incurrence of Indebtedness or Senior Indebtedness. The Indenture
contains no covenants or other provisions to afford protection to Holders
of Notes in the event of a highly leveraged transaction or a change of
control of the Company, except to the limited extent described under "-
Repurchase of Notes at the Option of the Holder Upon a Change of Control"
below.
Conversion Rights
Each Holder of Notes has the right at any time prior to the close of
business on the Stated Maturity of the Notes, unless previously redeemed or
repurchased, at the Holder's option, to convert any portion of the
principal amount thereof that is $1,000 or an integral multiple thereof
into shares of Common Stock at the Conversion Price set forth on the cover
page of this Prospectus (subject to adjustment as described below). The
right to convert a Note called for redemption or delivered for repurchase
and not withdrawn will terminate at the close of business on the Business
Day immediately prior to the Redemption Date or Repurchase Date for such
Note, unless the Company subsequently fails to pay the applicable
Redemption Price or Repurchase Price, as the case may be.
In the case of any Note that has been converted into Common Stock after any
Record Date, but on or before the next Interest Payment Date, interest, the
stated due date of which is on such Interest Payment Date, shall be payable
on such Interest Payment Date notwithstanding such conversion, and such
interest shall be paid to the Holder of such Note who is a Holder on such
Record Date. Any Note converted after any Record Date but before the next
Interest Payment Date (other than Notes called for redemption) must be
accompanied by payment of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of Notes being surrendered
for conversion; provided no such payment shall be required with respect to
interest payable on March 1, 2001. As a result of the foregoing provisions,
Holders that surrender Notes for conversion on a date that is not an
Interest Payment Date will not receive any interest for the period from the
Interest Payment Date next preceding the date of conversion to the date of
conversion or for any later period, except for Notes that are called for
redemption. No fractional shares of Common Stock will be issued upon
conversion but, in lieu thereof, an appropriate amount will be paid in cash
by the Company based on the market price of Common Stock (determined in
accordance with the Indenture) at the close of business on the day of
conversion.
The Conversion Price is subject to adjustment in certain events, including
(a) any payment of a dividend (or other distribution) payable in Common
Stock on any class of Capital Stock of the Company, (b) any issuance to all
or substantially all holders of Common Stock of rights, options or warrants
entitling them to subscribe for or purchase Common Stock at less than the
then current market price of Common Stock (determined in accordance with
the Indenture); provided, however, that if such rights, options or warrants
are only exercisable upon the occurrence of certain triggering events, then
the Conversion Price will not be adjusted until such triggering events
occur, (c) certain subdivisions, combinations or reclassifications of
Common Stock, (d) any distribution to all or substantially all holders of
Common Stock of evidences of indebtedness, cash or other assets (including
securities, but excluding those dividends, rights, options, warrants and
distributions referred to above and excluding dividends and distributions
paid exclusively in cash and in mergers and consolidation as described in
the Indenture), (e) any distribution consisting exclusively of cash to all
or substantially all holders of Common Stock in an aggregate amount that,
combined together with (i) all other such all-cash distributions made
within the then preceding 12 months in respect of which no adjustments have
been made and (ii) any cash and the fair market value of other
consideration paid or payable in respect of any tender or exchange offer by
the Company or any of its subsidiaries for Common Stock concluded within
the preceding 12 months in respect of which no adjustment has been made,
exceeds 15% of the Company's market capitalization (defined as being the
product of the then current market price of the Common Stock times the
number of shares of Common Stock then outstanding) on the record date of
such distribution, and (f) the completion of a tender or exchange offer
made by the Company or any of its subsidiaries for Common Stock that
involves an aggregate consideration that, together with (i) any cash and
other consideration payable in a tender or exchange offer by the Company or
any of its subsidiaries for Common Stock expiring within the 12 months
preceding the expiration of such tender or exchange offer in respect of
which no adjustment has been made and (ii) the aggregate amount of any such
all-cash distributions referred to in (e) above to all holders of Common
Stock within the 12 months preceding the expiration of such tender or
exchange offer in respect of which no adjustments have been made, exceeds
15% of the Company's market capitalization on the expiration of such tender
or exchange offer. No adjustment of the Conversion Price will be required
to be made unless such adjustment would require an increase or decrease of
at least 1% of the Conversion Price.
In the event of a taxable distribution to holders of Common Stock (or other
transaction) which results in any adjustment of the Conversion Price, the
Holders of Notes may, in certain circumstances, be deemed to have received
a distribution subject to United States federal income tax as a dividend;
in certain other circumstances, the absence of such an adjustment may
result in a taxable dividend to the holders of Common Stock.
The Company, from time to time and to the extent permitted by law, may
reduce the Conversion Price by any amount for any period of at least 20
Business Days, in which case the Company shall give at least 15 days notice
of such reduction, if the Board of Directors has made a determination that
such reduction would be in the best interests of the Company, which
determination shall be conclusive. The Company may, at its option, make
such reductions in the Conversion Price, in addition to those set forth
above, as the Board of Directors deems advisable to avoid or diminish any
income tax to holders of Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event
treated as such for United States federal income tax purposes. See "Certain
United States Federal Income Tax Consequences."
In case of any reclassification or change of outstanding shares of Common
Stock issuable upon conversion of the Notes (other than certain changes in
par value) or consolidation or merger of the Company with or into another
Person or any merger of another Person with or into the Company (with
certain exceptions), or in case of any sale, transfer or conveyance of all
or substantially all of the assets of the Company, each Note then
outstanding will, without the consent of any Holder of Notes, become
convertible only into the kind and amount of securities, cash and other
property receivable upon such reclassification, change, consolidation,
merger, sale, transfer or conveyance by a holder of the number of shares of
Common Stock into which such Note was convertible immediately prior
thereto, after giving effect to any adjustment event; provided, that if the
kind or amount of securities, cash and other property is not the same for
each share of Common Stock held immediately prior to such reclassification,
change, consolidation, merger, sale, transfer or conveyance, any Holder who
fails to exercise any right of election shall receive per share the kind
and amount of securities, cash or other property received per share by a
plurality of non-electing shares.
The Company will cause all registrations to be made with, and will use its
reasonable best efforts to obtain any approvals by, any governmental
authority under any Federal or state law of the United States that may be
required on the part of the Company in connection with the conversion of
the Notes into Common Stock. If at any time during the two-year period
following the date of the original issuance of the Notes a registration
statement under the Securities Act covering the shares of Common Stock
issuable upon conversion of the Notes is not effective or is otherwise
unavailable for effecting resales of such shares, shares of Common Stock
issued upon conversion of the Notes ("Restricted Shares") may not be sold
or otherwise transferred except in accordance with or pursuant to an
exemption from, or otherwise in a transaction not subject to, the
registration requirements of the Securities Act, and, if a registration
statement under the Securities Act is not effective or is otherwise
unavailable for effecting resales of such shares at the time of a
conversion, the Restricted Shares will bear a legend to that effect. The
Transfer Agent for the Common Stock will not be required to accept for
registration of transfer any Restricted Shares, except upon presentation of
satisfactory evidence that these restrictions on transfer have been
complied with, all in accordance with such reasonable regulations as the
Company may from time to time agree with the Transfer Agent. Under certain
circumstances, the holders of the Restricted Shares will be entitled to
liquidated damages during such period. See "-Registration Rights;
Liquidated Damages."
Subordination
The Notes are general, unsecured obligations of the Company, subordinated
in right of payment to all existing and future Senior Indebtedness. The
Notes are structurally subordinated in right of payment to all Indebtedness
and other liabilities (including trade payables) of the Company's
subsidiaries. At December 31, 1997, on a pro forma adjusted basis, after
giving effect to the sale of the Notes to the Initial Purchasers and the
use of the net proceeds therefrom, the Company and its subsidiaries would
have had $58.4 million of Senior Indebtedness. In addition, as of such
date and after giving effect to the sale of the Notes to the Initial
Purchasers, on a pro forma basis, the Company had available borrowing
capacity of approximately $189.3 million (subject to customary borrowing
conditions) under the Credit Facility. Indebtedness under the Credit
Facility will constitute Senior Indebtedness. The Indenture does not
restrict the incurrence of Senior Indebtedness or other Indebtedness by the
Company or its subsidiaries or the ability of the Company to transfer
assets or business operations to its subsidiaries, subject to the
provisions described under "-Repurchase of Notes at the Option of the
Holder Upon a Change of Control" and "-Limitation on Merger, Sale or
Consolidation" below.
The Indenture provides that no payment may be made by the Company on
account of the principal of, premium, if any, interest on or liquidated
damages with respect to, the Notes, or to acquire any of the Notes
(including repurchases of Notes at the option of the Holder) for cash or
property (other than Junior Securities), or on account of the redemption
provisions of the Notes, (i) upon the maturity of any Senior Indebtedness,
by lapse of time, acceleration (unless waived) or otherwise, unless and
until all principal of, premium, if any, and interest on such Senior
Indebtedness are first paid in full (or such payment is duly provided for),
or (ii) in the event of default in the payment of any principal of,
premium, if any, or interest on any Senior Indebtedness when it becomes due
and payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise (collectively, a "Payment Default"), unless and
until such Payment Default has been cured or waived or otherwise has ceased
to exist. The payment of cash, property or securities (other than Junior
Securities) upon conversion of a Note will constitute payment on a Note and
therefore will be subject to the subordination provisions in the Indenture.
Upon (i) the happening of an event of default (other than a Payment
Default) that permits, or would permit with (a) the passage of time, (b)
the giving of notice, (c) the making of any payment of the Notes then
required to be made or (d) any combination thereof (collectively, a "Non-
Payment Default"), the holders of Senior Indebtedness having a principal
amount then outstanding in excess of $10 million (or with respect to which
Senior Indebtedness the holders are obligated to lend in excess of $10
million principal amount) or their representative immediately to accelerate
its maturity and (ii) written notice of such Non-Payment Default given to
the Company and the Trustee by the holders of an aggregate of at least $10
million outstanding principal amount (or commitments to lend up to at least
$10 million in principal amount) of such Senior Indebtedness or their
representative (a "Payment Notice"), then, unless and until such Non-
Payment Default has been cured or waived or otherwise has ceased to exist,
no payment (by setoff or otherwise) may be made by or on behalf of the
Company on account of the principal of, premium, if any, interest on or
liquidated damages with respect to, the Notes, or to acquire or repurchase
any of the Notes for cash or property or on account of the redemption
provisions of the Notes (other than payments made with Junior Securities).
Notwithstanding the foregoing, unless (i) the Senior Indebtedness in
respect of which such Non-Payment Default exists has been declared due and
payable in its entirety within 179 days after the Payment Notice is
delivered as set forth above (the "Payment Blockage Period"), and (ii) such
declaration has not been rescinded or waived, at the end of the Payment
Blockage Period, the Company shall be required to pay all sums not paid to
the Holders of the Notes during the Payment Blockage Period due to the
foregoing prohibitions and to resume all other payments as and when due on
the Notes. Not more than one Payment Notice may be given in any consecutive
365-day period, irrespective of the number of defaults with respect to
Senior Indebtedness during such period. In no event, however, may the total
number of days during which any Payment Blockage Period is or Payment
Blockage Periods are in effect exceed 179 days in the aggregate during any
consecutive 365-day period.
Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership
or a similar proceeding or upon assignment for the benefit of creditors or
any marshaling of assets or liabilities (i) the holders of all Senior
Indebtedness will first be entitled to receive payment in full (or have
such payment duly provided for) before the Holders of the Notes are
entitled to receive any payment on account of the principal of, premium, if
any, interest on and liquidated damages with respect to, the Notes (other
than Junior Securities) and (ii) any payment or distribution of assets of
the Company of any kind or character, whether in cash, property or
securities (other than Junior Securities) to which the Holders of the Notes
or the Trustee on behalf of the Holders would be entitled (by setoff or
otherwise), except for the subordination provisions contained in the
Indenture, will be paid by the liquidating trustee or agent or other person
making such a payment or distribution directly to the holders of Senior
Indebtedness or their representative to the extent necessary to make
payment in full of all such Senior Indebtedness remaining unpaid, after
giving effect to any concurrent payment or distribution, or provision
therefor, to the holders of such Senior Indebtedness.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company (other than Junior Securities) shall
be received by the Holders of the Notes or the Trustee on behalf of the
Holders or any Paying Agent at a time when such payment or distribution is
prohibited by the foregoing provisions, such payment or distribution shall
be held in trust for the benefit of the holders of Senior Indebtedness, and
shall be paid or delivered by such Holders or the Trustee or such Paying
Agent, as the case may be, to the holders of the Senior Indebtedness
remaining unpaid or unprovided for or their representative or
representatives or to the trustee or trustees, ratably according to the
respective amounts remaining unpaid on account of the Senior Indebtedness
held or represented by each, for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay or to provide
for the payment of all such Senior Indebtedness in full after giving effect
to any concurrent payment or distribution, or provision therefor, to the
holders of such Senior Indebtedness.
No provision contained in the Indenture or the Notes affects the obligation
of the Company, which is absolute and unconditional, to pay, when due,
principal of, premium if any, and interest on, and liquidated damages with
respect to, the Notes. The subordination provisions of the Indenture and
the Notes do not prevent the occurrence of any Default or Event of Default
under the Indenture or limit the rights of the Trustee or any Holder of any
Notes, subject to the preceding paragraphs, to pursue any other rights or
remedies with respect to the Notes.
The Company conducts its operations through its subsidiaries. Accordingly,
the Company's ability to meet its cash obligations in the future will be
dependent upon the ability of its subsidiaries to make cash distributions
to the Company. The ability of its subsidiaries to make distributions to
the Company is and will continue to be restricted by, among other
limitations, applicable provisions of the laws of national and state
governments and may be restricted by contractual provisions. The Indenture
does not limit the ability of the Company's subsidiaries to incur such
contractual restrictions in the future. The right of the Company to
participate in the assets of any subsidiary (and thus the ability of
Holders of the Notes to benefit indirectly from such assets) is generally
subject to the prior claims of creditors, including trade creditors, of
that subsidiary except to the extent that the Company is recognized as a
creditor of such subsidiary, in which case the Company's claims would still
be subject to any security interest of other creditors of such subsidiary.
The Notes, therefore, are structurally subordinated to creditors, including
trade creditors, of subsidiaries of the Company with respect to the assets
of the subsidiaries against which such creditors have a more direct claim.
As a result of these subordination provisions, in the event of the
liquidation, bankruptcy, reorganization, insolvency, receivership or
similar proceeding or an assignment for the benefit of the creditors of the
Company or any of its subsidiaries or a marshaling of assets or liabilities
of the Company and its subsidiaries, Holders of Notes may receive ratably
less than other creditors.
Redemption at the Company's Option
The Notes are not subject to redemption prior to March 1, 2001 and are
redeemable on and after such date at the option of the Company, in whole or
in part, upon not less than 30 nor more than 60 days' written notice to
each Holder, at the following Redemption Prices (expressed as percentages
of the principal amount) if redeemed during the 12-month period commencing
March 1 of the years indicated below, in each case (subject to the right of
Holders of record on a Record Date to receive interest due on an Interest
Payment Date that is on or prior to such Redemption Date) together with
accrued and unpaid interest and liquidated damages, if any, to, but
excluding, the Redemption Date:
<TABLE>
<CAPTION>
Year Percentage
<C> <C>
2001 102.79%
2002 102.09
2003 101.39
2004 100.70
2005 and thereafter. 100.00
</TABLE>
In the case of a partial redemption, the Trustee shall select the Notes or
portions thereof for redemption on a pro rata basis, by lot or in such
other manner it deems appropriate and fair. The Notes may be redeemed in
part in multiples of $1,000 only.
The Notes will not have the benefit of any sinking fund.
Notice of any redemption will be sent, by first-class mail, at least 30
days and not more than 60 days prior to the date fixed for redemption (the
"Redemption Date"), to the Holder of each Note to be redeemed to such
Holder's last address as then shown upon the registry books of the
Registrar. The notice of redemption must state the Redemption Date, the
Redemption Price and the amount of accrued interest and liquidated damages,
if any, to be paid. Any notice that relates to a Note to be redeemed in
part only must state the portion of the principal amount to be redeemed and
must state that on and after the Redemption Date, upon surrender of such
Note, a new Note or Notes in principal amount equal to the unredeemed
portion thereof will be issued. On and after the Redemption Date, interest
will cease to accrue on the Notes or portions thereof called for
redemption, unless the Company defaults in its obligations with respect
thereto.
Repurchase of Notes at the Option of the Holder Upon a Change of Control
The Indenture provides that in the event that a Change of Control has
occurred, the Company is required to make an irrevocable and unconditional
(except as described below) offer (the "Repurchase Offer") to purchase all
Notes on the date (the "Repurchase Date") that is no later than 45 Business
Days (except as described below) after the occurrence of such Change of
Control at a cash price (the "Repurchase Price") equal to 100% of the
principal amount thereof, together with accrued and unpaid interest and
liquidated damages, if any, to (but excluding) the Repurchase Date. A
Holder of Notes may accept the Repurchase Offer with respect to all or a
portion of its Notes (provided that the principal amount of such Notes must
be $1,000 or an integral multiple thereof). The Repurchase Offer shall be
made within 25 Business Days following a Change of Control and shall remain
open for 20 Business Days following its commencement except to the extent
that a longer period is required by applicable law (the "Repurchase Offer
Period"). Upon expiration of the Repurchase Offer Period, the Company shall
purchase all Notes tendered in response to the Repurchase Offer. If
required by applicable law, the Repurchase Date and the Repurchase Offer
Period may be extended as so required; however, if so extended, it shall
nevertheless constitute an Event of Default if the Repurchase Date does not
occur within 60 Business Days of the Change of Control.
On or before the Repurchase Date, the Company will (i) accept for payment
Notes or portions thereof properly tendered pursuant to the Repurchase
Offer, (ii) deposit with the Paying Agent cash sufficient to pay the
Repurchase Price (together with accrued and unpaid interest and liquidated
damages, if any) of all Notes so tendered and (iii) deliver to the Trustee
the Notes so accepted, together with an officers' certificate listing the
Notes or portions thereof being purchased by the Company. The Paying Agent
will promptly mail to the Holders of Notes so accepted payment in an amount
equal to the Repurchase Price (together with accrued and unpaid interest
and liquidated damages, if any), and the Trustee will promptly authenticate
and mail or deliver to such Holders a new Note or Notes equal in principal
amount to any unpurchased portion of the Notes surrendered. Any Notes not
so accepted will be promptly mailed or delivered by the Company to the
Holder thereof. The Company will publicly announce the results of the
Repurchase Offer on or as soon as practicable after the Repurchase Date.
The phrase "all or substantially all" of the assets of the Company, as
included in the definition of Change of Control, is likely to be
interpreted by reference to applicable state law at the relevant time, and
will be dependent on the facts and circumstances existing at such time. As
a result, there may be a degree of uncertainty in ascertaining whether a
sale or transfer of "all or substantially all" of the assets of the Company
has occurred.
The Change of Control purchase feature of the Notes may make more difficult
or discourage a takeover of the Company, and, thus, the removal of
incumbent management. The Change of Control purchase feature resulted from
negotiations between the Company and the Initial Purchasers.
The provisions of the Indenture relating to a Change of Control may not
afford the Holders of the Notes protection in the event of a highly
leveraged transaction, reorganization, restructuring, merger, spin-off or
similar transaction that may adversely affect Holders, if such transaction
does not constitute a Change of Control. Moreover, certain events with
respect to the Company which may involve an actual change of control of the
Company may not constitute a Change of Control for purposes of the
Indenture.
The Company may not have sufficient financial resources available to
fulfill its obligation to repurchase the Notes upon a Change of Control or
to repurchase other debt securities of the Company or its subsidiaries
providing similar rights to the holders thereof. Further, the right to
require the Company to repurchase Notes as a result of the occurrence of a
Change of Control could create an event of default under Senior
Indebtedness as a result of which any repurchase could, absent a waiver, be
blocked by the subordination provisions of the Notes. Failure of the
Company to repurchase the Notes when required would result in an Event of
Default with respect to the Notes whether or not such repurchase is
permitted by the subordination provisions. Any such default would, in turn,
cause a default under the Credit Facility and may cause a default under
other Senior Indebtedness. Moreover, the Change of Control may cause an
event of default under Senior Indebtedness. As a result, in each case, any
repurchase of the Notes could, absent a waiver, be blocked by the
subordination provisions of the Notes. See "-Subordination" above.
Except as described herein, no modification of the Indenture regarding the
provisions on repurchase at the option of any Holder of a Note upon a
Change of Control that adversely affects a Holder is permissible without
the consent of the Holder of the Note so affected. In the event of a Change
of Control, if Holders of in excess of two-thirds of the outstanding
aggregate principal amount of the Notes so determine at any time following
the occurrence of such Change of Control and before the close of business
on the Business Day immediately preceding the Repurchase Date, such event
shall not be treated as a Change of Control for purposes of the Indenture.
In such event, (i) the Company shall not be required to make the Repurchase
Offer, (ii) to the extent the Repurchase Offer has already been made, such
Repurchase Offer shall be deemed revoked and (iii) to the extent any Notes
have been tendered in response to any such revoked Repurchase Offer, such
tender shall be rescinded and the Notes so tendered shall be promptly
returned to the Holders thereof. For purposes of any such determination by
the Holders of the outstanding Notes, Notes held by the Company or an
Affiliate of the Company (including any Person that would become an
Affiliate of the Company (or its successor) as a consequence of the event
or series of events that otherwise would be treated as a Change of Control
for purposes of the Indenture) shall be disregarded.
To the extent applicable, the Company will comply with the provisions of
Rule 13e-4 or any other tender offer rules under the Securities Act, and
will file a Schedule 13E-4 or any other schedule required under such rules,
in connection with any offer by the Company to repurchase Notes at the
option of the Holders upon a Change of Control.
Limitation on Merger, Sale or Consolidation
The Indenture provides that the Company shall not, directly or indirectly,
consolidate with or merge with or into, or sell, lease, convey or transfer
all or substantially all of its assets (on a consolidated basis), whether
in a single transaction or a series of related transactions, to another
Person or group of affiliated Persons (other than to its wholly owned
subsidiaries), or agree to do any of the foregoing, unless (i) either (a)
in the case of a merger or consolidation the Company is the surviving
entity or (b) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state
thereof or the District of Columbia and expressly assumes by supplemental
indenture all of the obligations of the Company in connection with the
Notes and the Indenture; and (ii) no Default or Event of Default shall
exist or shall occur immediately before or after giving effect to such
transaction.
Upon any consolidation or merger or any transfer of all or substantially
all of the assets of the Company in accordance with the foregoing, the
successor corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made, shall succeed to, and
be substituted for, and may exercise every right and power of, the Company
under the Indenture with the same effect as if such successor corporation
had been named therein as the Company, and the Company will be released
from its obligations under the Indenture and the Notes, except as to any
obligations that arise from or as a result of such transaction.
Reports
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and to each Holder, within 15 days after it is or would have been
required to file such with the Commission, annual and quarterly
consolidated financial statements substantially equivalent to financial
statements that would have been included in reports filed with the
Commission if the Company were subject to the requirements of Section 13 or
15(d) of the Exchange Act, including, with respect to annual information
only, a report thereon by the Company's certified independent public
accountants as such would be required in such reports to the Commission
and, in each case, together with a management's discussion and analysis of
financial condition and results of operations as such would be so required.
Events of Default and Remedies
The Indenture defines an Event of Default as (i) the failure by the Company
to pay any installment of interest on, or liquidated damages with respect
to, the Notes as and when the same become due and payable or to perform any
conversion of the Notes as required under the Indenture and the continuance
of any such failure for 30 days, (ii) the failure by the Company to pay all
or any part of the principal of, or premium, if any on the Notes when and
as the same become due and payable at maturity, redemption, by acceleration
or otherwise, including, without limitation, pursuant to any Repurchase
Offer, (iii) the failure of the Company to perform any conversion of Notes
required under the Indenture and the continuance of any such failure for 30
days, (iv) the failure by the Company to observe or perform any other
covenant or agreement contained in the Notes or the Indenture and, subject
to certain exceptions, the continuance of such failure for a period of 60
days after written notice is given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes outstanding, (v) certain events of
bankruptcy, insolvency or reorganization in respect of the Company or any
of its Significant Subsidiaries, (vi) failure of the Company or any
Significant Subsidiary to make any payment at maturity, including any
applicable grace period, in respect of Indebtedness (other than non-
recourse obligations) in an amount in excess of $15 million and continuance
of such failure for 30 days after written notice is given to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of Notes outstanding, (vii) default by
the Company or any Significant Subsidiary with respect to any Indebtedness
(other than non-recourse obligations), which default results in the
acceleration of Indebtedness in an amount in excess of $15 million without
such Indebtedness having been discharged or such acceleration having been
rescinded or annulled for 30 days after written notice is given to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in aggregate principal amount of Notes outstanding and (viii)
final unsatisfied judgments not covered by insurance aggregating in excess
of $15 million, at any one time rendered against the Company or any of its
Significant Subsidiaries and not stayed, bonded or discharged within 60
days. The Indenture provides that if a Default or Event of Default occurs
and is continuing, the Trustee must, within 90 days after the later of the
occurrence of such Default or Event of Default or the date the Trustee
becomes aware of the Default or Event of Default, give to the Holders
notice of such Default or Event of Default, but the Trustee shall be
protected in withholding such notice if it in good faith determines that
the withholding of such notice is in the best interest of the Holders,
except in the case of a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on or liquidated damages with
respect to, any of the Notes when due or in the payment of any redemption
or repurchase obligation.
The Indenture provides that if an Event of Default occurs and is continuing
(other than an Event of Default specified in clause (v) above with respect
to the Company), then in every such case, unless the principal of all of
the Notes shall have already become due and payable, either the Trustee or
the Holders of at least 25% in aggregate principal amount of the Notes then
outstanding, by notice in writing to the Company (and to the Trustee if
given by Holders), may declare all principal, premium, if any, accrued
interest and liquidated damages, if any, on or with respect to the Notes to
be due and payable immediately. If an Event of Default specified in clause
(v) above with respect to the Company occurs, all principal, premium, if
any, accrued interest and liquidated damages, if any, will be immediately
due and payable on all outstanding Notes without any declaration or other
act on the part of the Trustee or the Holders. The Holders of no less than
a majority in aggregate principal amount of Notes generally are authorized
to rescind such acceleration if all existing Events of Default, other than
the non-payment of the principal of, premium, if any, and interest on, and
liquidated damages with respect to, the Notes that have become due solely
by such acceleration, have been cured or waived.
Prior to the declaration of acceleration of the maturity of the Notes, the
Holders of a majority in aggregate principal amount of the Notes at the
time outstanding may waive on behalf of all the Holders any default, except
a default in the payment of principal of, premium, if any, interest on, or
liquidated damages with respect to, any Note not yet cured, or a default
with respect to any covenant or provision that cannot be modified or
amended without the consent of the Holder of each outstanding Note
affected. Subject to the provisions of the Indenture relating to the duties
of the Trustee, the Trustee will be under no obligation to exercise any of
its rights or powers under the Indenture at the request, order or direction
of any of the Holders, unless such Holders have offered to the Trustee
reasonable security or indemnity. Subject to all provisions of the
Indenture and applicable law, the Holders of a majority in aggregate
principal amount of the Notes at the time outstanding will 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.
The Indenture provides that no Holder may pursue any remedy under the
Indenture, except for a default in the payment of principal, premium, if
any, or interest or liquidated damages, if any, on the Notes or the failure
to convert the Notes, unless the Holder gives to the Trustee written notice
of a continuing Event of Default, the Holders of at least 25% in principal
amount of the outstanding Notes make a written request to the Trustee to
pursue the remedy, such Holders offer to the Trustee security or indemnity
satisfactory to the Trustee against any cost, liability or expense, the
Trustee does not comply with the request within 60 days after receipt of
the request and the offer of indemnity, and the Trustee shall not have
received during such 60 days a contrary direction from the Holders of a
majority in principal amount of the outstanding Notes.
Amendments and Supplements
The Indenture contains provisions permitting the Company and the Trustee to
enter into a supplemental indenture for certain limited purposes without
the consent of the Holders. With the consent of the Holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, the Company and the Trustee are permitted to amend or
supplement the Indenture or any supplemental indenture or modify the rights
of the Holders; provided, that no such modification may, without the
consent of each Holder affected thereby: (i) change the Stated Maturity of
any Note or reduce the principal amount thereof or the rate (or extend the
time for payment) of interest thereon or any premium payable upon the
redemption thereof, or change the place of payment where, or the coin or
currency in which, any Note or any premium or the interest thereon is
payable, or impair the right to institute suit for the conversion of any
Note or the enforcement of any such payment on or after the due date
thereof (including, in the case of redemption, on or after the Redemption
Date), or reduce the Repurchase Price, or alter the Repurchase Offer (other
than as set forth herein) or redemption provisions in a manner adverse to
the Holders, or (ii) reduce the percentage in principal amount of the
outstanding Notes, the consent of whose Holders is required for any such
amendment, supplemental indenture or waiver provided for in the Indenture,
or (iii) adversely affect the right of such Holder to convert Notes, or
(iv) modify any of the waiver provisions, except to increase any required
percentage or to provide that certain other provisions of the Indenture
cannot be modified or waived without the consent of the Holder of each
outstanding Note affected thereby. A supplemental indenture entered into in
compliance with the "Limitation on Merger, Sale or Consolidation" covenant
would not require the consent of the Holders of the Notes.
No Personal Liability of Stockholders, Officers, Directors and Employees
The Indenture provides that no stockholder, employee, officer, director or
partner, as such, past, present or future, of the Company or any successor
corporation shall have any personal liability in respect of the obligations
of the Company under the Indenture or the Notes by reason of his, her or
its status as such stockholder, employee, officer, director or partner.
Transfer and Exchange
A Holder may transfer or exchange the Notes in accordance with the
Indenture. The Company or Trustee may require a Holder, among other things,
to furnish appropriate endorsements, legal opinions and transfer documents,
and to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any Notes
selected for redemption. Also, the Company is not required to transfer or
exchange any Notes for a period of 15 days before the mailing of a
Repurchase Offer or notice of redemption.
The registered holder of a Note may be treated as the owner of it for all
purposes.
Book Entry, Delivery and Form
Notes currently held by "qualified institutional buyers," as defined in
Rule 144A under the Securities Act ("QIBs"), are currently evidenced by one
U.S. Global Note, which was deposited on the date of the closing of the
sale of the Notes (the "Closing Date") with, or on behalf of, the
Depository and registered in the name of Cede and Co. ("Cede") as the
Depository's nominee. Notes held by Non-U.S. Persons who acquired such
Notes in compliance with Regulation S under the Securities Act are
currently evidenced by one Regulation S Global Note, which was deposited on
the Closing Date with, or on behalf of, the Depository and registered in
the name of Cede as the Depository's nominee, for the accounts of the
Euroclear and Cedel.
Any purchaser (a "Public Holder") of Notes pursuant to this Prospectus will
receive a beneficial interest in an unrestricted global note (the
"Registered Global Note") which will be deposited with, or on behalf of,
the Depository and registered in the name of Cede as the Depository's
nominee. Except as set forth below, the Registered Global Note may be
transferred, in whole or in part, only to another nominee of the Depository
or to a successor of the Depository or its nominee.
A Public Holder may hold its interest in the Registered Global Note
directly through the Depository if such Public Holder is a participant in
the Depository, or indirectly through organizations which are participants
in the Depository (the "Participants"). Transfers between Participants will
be effected in the ordinary way in accordance with the Depository's rules
and will be settled in federal funds.
The Depository has advised the Company that it is a limited-purpose trust
company that was created to hold securities for its Participants and to
facilitate the clearance and settlement of transactions in such securities
between Participants through electronic book-entry changes in accounts of
its Participants (including Euroclear and Cedel). The Depository's
Participants include securities brokers and dealers (including the Initial
Purchasers), banks and trust companies, clearing corporations and certain
other organizations. Access to the Depository's system is also available to
other entities such as banks, brokers, dealers and trust companies
(collectively, "Indirect Participants") that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly.
Public Holders who are not Participants may beneficially own securities
held by or on behalf of the Depository only through Participants or
Indirect Participants.
The Company expects that pursuant to procedures established by the
Depository, (i) upon deposit of the Registered Global Note, the Depository
will credit the accounts of Participants with an interest in the Registered
Global Note and (ii) ownership of the Notes evidenced by the Registered
Global Note will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by the Depository (with respect
to the interests of Participants), the Participants and the Indirect
Participants. The laws of some states require that certain persons take
physical delivery in definitive form of securities that they own and that
security interests in negotiable instruments can only be perfected by
delivery of certificates representing the instruments. Consequently, the
ability to transfer Notes evidenced by the Registered Global Note will be
limited to such extent.
So long as the Depository or its nominee is the registered owner of a Note,
the Depository or such nominee, as the case may be, will be considered the
sole owner or holder of the Notes represented by the Registered Global Note
for all purposes under the Indenture. Except as provided below, owners of
beneficial interests in the Registered Global Note will not be entitled to
have Notes represented by such Registered Global Note registered in their
names, will not receive or be entitled to receive physical delivery of
Certificated Notes, and will not be considered the owners or holders
thereof under the Indenture for any purpose, including with respect to the
giving of any directions, instructions or approvals to the Trustee
thereunder. As a result, the ability of a Person having a beneficial
interest in Notes represented by the Registered Global Note to pledge such
interest to Persons that do not participate in the Depository's system, or
to otherwise take actions with respect to such interest, may be affected by
the lack of a physical certificate evidencing such interest.
Neither the Company nor the Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in the Registered Global Note by
the Depository, or for maintaining, supervising or reviewing any records of
the Depository relating to such beneficial ownership interests.
Payments with respect to the principal of, premium, if any, interest on,
and liquidated damages with respect to, the Registered Global Note
registered in the name of the Depository or its nominee on the applicable
record date will be payable by the Trustee to or at the direction of the
Depository or its nominee in its capacity as the registered Holder of the
Registered Global Note under the Indenture. Under the terms of the
Indenture, the Company and the Trustee may treat the Person in whose name
the Registered Global Note is registered as the owner thereof for the
purpose of receiving such payments and for any and all other purposes
whatsoever. Consequently, neither the Company, nor the Trustee has or will
have any responsibility or liability for the payment of such amounts to
beneficial owners of the Registered Global Note (including, principal,
premium, if any, interest, or liquidated damages with respect thereto), or
to immediately credit the accounts of the relevant Participants with such
payment, in amounts proportionate to their respective holdings in principal
amount of beneficial interests in the Registered Global Note as shown on
the records of the Depository. Payments by the Participants and the
Indirect Participants to the beneficial owners of the Registered Global
Note will be governed by standing instructions and customary practice and
will be the responsibility of the Participants or the Indirect
Participants.
Holders who desire to convert their Notes into Common Stock pursuant to the
terms of the Notes should contact their brokers or other Participants or
Indirect Participants to obtain information on procedures, including proper
forms and cut-off times, for submitting such requests.
If (i) the Company notifies the Trustee in writing that the Depository is
no longer willing or able to act as a Depository and a successor is not
appointed by the Company within 90 days or (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of
Notes in definitive form under the Indenture, then, upon surrender by the
Depository of the Registered Global Note, Certificated Notes will be issued
to each person that the Depository identifies as the beneficial owner of
the Notes represented by the Registered Global Note. In addition, subject
to certain conditions, any Person having a beneficial interest in the
Registered Global Note may, upon request to the Trustee, exchange such
beneficial interest for Notes in the form of Certificated Notes. Upon any
such issuance, the Trustee is required to register such Certificated Notes
in the name of such Person or Persons (or the nominee of any thereof), and
cause the same to be delivered thereto.
Neither the Company nor the Trustee shall be liable for any delay by the
Depository or any Participant or Indirect Participant in identifying the
beneficial owners of the Registered Global Note, and the Company and the
Trustee may conclusively rely on, and shall be protected in relying on,
instructions from the Depository for all purposes (including with respect
to the registration and delivery, and the respective principal amounts, of
the Notes to be issued).
Registration Rights; Liquidated Damages
The Company and the Initial Purchasers have entered into a Registration
Rights Agreement dated February 19, 1998 (the "Registration Rights
Agreement").
Pursuant to the Registration Rights Agreement, the Company has filed with
the Commission on April 14, 1998 a registration statement under the
Securities Act (the "Shelf Registration Statement") on Form S-3, of which
this Prospectus is a part, to cover resales of Transfer Restricted
Securities (as defined below) by the holders thereof. The Company will use
its reasonable best efforts to cause the Shelf Registration Statement to be
declared effective by the Commission within 180 days of the original
issuance of the Notes and to keep the Shelf Registration Statement
effective for a period of at least two years following such effective date
or such shorter period as will terminate upon the earlier of either (a)
when all Transfer Restricted Securities covered by such Shelf Registration
Statement have been sold pursuant thereto and (b) when, in the written
opinion of independent counsel to the Company, all outstanding Transfer
Restricted Securities held by persons that are not affiliates of the
Company may be resold without registration under the Securities Act
pursuant to Rule 144(k) under the Securities Act or any successor provision
thereto. For purposes of the foregoing, "Transfer Restricted Securities"
means each Note and share of Common Stock issued upon conversion thereof
until the date on which such Note or share of Common Stock has been
effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement, the date on which such
Note or share of Common Stock is distributed to the public pursuant to Rule
144 under the Securities Act or is saleable pursuant to Rule 144(k) under
the Securities Act (or any similar provisions then in force), the date on
which all such Notes or all such shares of Common Stock cease to be
outstanding, or the date on which the Note or share of Common Stock has
otherwise been transferred and a new Note or share of Common Stock not
subject to transfer restrictions under the Securities Act has been
delivered by or on behalf of the Company in accordance with the Indenture.
If (i) the Shelf Registration Statement has not been declared effective by
the Commission within 180 days after the Closing Date or (ii) the Shelf
Registration Statement is filed and declared effective but shall thereafter
cease to be effective or the prospectus contained therein ceases to be
usable (without being succeeded immediately by an additional Shelf
Registration Statement filed and declared effective which is then available
for effecting resales of Transfer Restricted Securities) for a period of
time which shall exceed 60 days in the aggregate during any 12-month period
(each such event referred to in clauses (i) and (ii) above, a "Registration
Default"), the Company will accrue liquidated damages to each Holder of
Transfer Restricted Securities, during the first 90-day period immediately
following the occurrence of such Registration Default in an amount equal to
$0.05 per week per $1,000 principal amount of Notes or, if applicable, in
an amount equal to $0.05 per week per the number of shares of Common Stock
constituting Transfer Restricted Securities held by such Holder into which
each $1,000 of principal amount of Notes was converted (subject to
adjustment in the event of stock splits, stock recombinations, stock
dividends and the like). The rate of accrual of the liquidated damages will
increase by an additional $0.05 per week per $1,000 principal amount of
Notes or, if applicable, in an amount equal to $0.05 per week per the
number of shares of Common Stock constituting Transfer Restricted
Securities into which each $1,000 of principal amount of Notes was
converted (subject to adjustment as set forth above) for each subsequent
90-day period until all Registration Defaults have been cured, up to a
maximum amount of liquidated damages with respect to any Registration
Default of $0.50 per week per $1,000 principal amount of Notes or, if
applicable, an amount equal to $0.50 per week per the number of shares of
Common Stock constituting Transfer Restricted Securities into which each
$1,000 of principal amount of Notes was converted (subject to adjustment as
set forth above). All accrued liquidated damages shall be paid to the
Holders of Notes or shares of Common Stock (as applicable) in the same
manner as interest payments on the Notes on semi-annual payment dates which
correspond to interest payment dates for the Notes. Following the cure of a
Registration Default, liquidated damages will cease to accrue with respect
to such Registration Default. The use of the Shelf Registration Statement
for effecting resales of Transfer Restricted Securities may be suspended in
certain circumstances described in the Registration Rights Agreement upon
notice by the Company to the holders of the Transfer Restricted Securities,
subject to the rights of the holders of Transfer Restricted Securities to
receive liquidated damages if the aggregate number of days of such
suspensions in any 12-month period exceeds the period described above.
The Company will notify each selling Holder of Transfer Restricted
Securities when the Shelf Registration Statement has become effective and
take certain other actions as are required to permit unrestricted resales
of the Transfer Restricted Securities. A Holder who sells Transfer
Restricted Securities pursuant to the Shelf Registration Statement
generally will be required to be named as a selling stockholder in the
related prospectus and to deliver a prospectus to purchasers and will be
bound by the provisions of the Registration Rights Agreement which are
applicable to such Holder (including certain indemnification provisions).
Holders of the Transfer Restricted Securities will be required to make
certain representations to the Company (as described in the Registration
Rights Agreement) and will be required to deliver information to be used in
connection with the Shelf Registration Statement in order to have their
Transfer Restricted Securities included in the Shelf Registration
Statement.
Governing Law
The Indenture and the Notes provide that they are governed in accordance
with the laws of the State of New York.
The Trustee
State Street Bank and Trust Company is the Trustee under the Indenture. A
successor Trustee may be appointed in accordance with the term of the
Indenture.
The Indenture contains certain limitations on the rights of the Trustee, in
the event it becomes a creditor of the Company, to obtain payment of claims
in certain cases, or to realize on certain property received in respect of
any such claim as security or otherwise. The Trustee is permitted to engage
in other transactions; provided, however, that if it acquires any
conflicting interest (as defined), it must eliminate such conflict or
resign.
In case an Event of Default shall occur (and shall not be cured), the
Trustee will be required to use the degree of care of a prudent person in
the conduct of his own affairs in the exercise of its powers. Subject to
such provisions, the Trustee will be under no obligation to exercise any of
its rights or powers under the Indenture at the request of any of the
Holders of Notes, unless they shall have offered to the Trustee reasonable
security or indemnity.
Certain Definitions
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York or
Boston, Massachusetts are authorized or obligated by law or executive order
to close.
"Capitalized Lease Obligation" means, as to any Person, the obligation of
such Person to pay rent or other amounts under a lease to which such Person
is a party that is required to be classified and accounted for as a capital
lease obligation under GAAP.
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Change of Control" means (i) an event or series of events as a result of
which any "person" or "group" (as such terms are used in Sections 13(d)(3)
and 14(d) of the Exchange Act) (excluding the Company or any wholly owned
subsidiary thereof) is or becomes, directly or indirectly, the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, whether
or not applicable) of more than 50% of the combined voting power of the
then outstanding securities entitled to vote generally in elections of
directors, managers or trustees, as applicable, of the Company or any
successor entity ("Voting Stock"), (ii) the completion of any consolidation
with or merger of the Company into any other Person, or sale, conveyance,
transfer or lease by the Company of all or substantially all of its assets
to any Person, or any merger of any other Person into the Company in a
single transaction or series of related transactions, and, in the case of
any such transaction or series of related transactions, the outstanding
Common Stock is changed or exchanged as a result, unless the stockholders
of the Company immediately before such transaction own, directly or
indirectly, immediately following such transaction, at least a majority of
the combined voting power of the outstanding voting securities of the
Person resulting from such transaction in substantially the same proportion
as their ownership of the Voting Stock immediately before such transaction,
or (iii) such time as the Continuing Directors do not constitute a majority
of the Board of Directors (or, if applicable, a successor corporation to
the Company); provided that a Change of Control shall not be deemed to have
occurred if either (x) the last sale price of the Common Stock for any five
trading days during the 10 trading days immediately preceding the Change of
Control is at least equal to 105% of the Conversion Price in effect on such
day, or (y) with respect to a merger or consolidation otherwise
constituting a Change of Control described in clause (ii) above, at least
90% of the consideration in such transaction or transactions consists of
common stock or securities convertible into common stock that are, or upon
issuance will be, traded on a United States national securities exchange or
approved for quotation on the Nasdaq National Market.
"Continuing Director" means at any date a member of the Board of Directors
(i) who was a member of such board on the date of initial issuance of the
Notes or (ii) who was nominated or elected by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election or whose election to the Board of Directors was recommended or
endorsed by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election.
"Disqualified Capital Stock" means, with respect to the Company, Capital
Stock of the Company that, by its terms or by the terms of any security
into which it is convertible, exercisable or exchangeable, is, or upon the
happening of an event or the passage of time would be, required to be
redeemed or repurchased (including at the option of the holder thereof) by
the Company, in whole or in part, on or prior to the Stated Maturity of the
Notes, provided that only the portion of such Capital Stock which is so
convertible, exercisable, exchangeable or redeemable or subject to
repurchase prior to such Stated Maturity shall be deemed to be Disqualified
Capital Stock.
"Indebtedness" of any Person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such Person,
(i) in respect of borrowed money (whether or not the lender has recourse to
all or any portion of the assets of such Person), (ii) evidenced by credit
or loan agreements, bonds, notes, debentures or similar instruments
(including, without limitation, notes or similar instruments given in
connection with the acquisition of any business, properties or assets of
any kind), (iii) evidenced by bankers' acceptances or similar instruments
issued or accepted by banks, (iv) for the payment of money relating to a
Capitalized Lease Obligation or (v) evidenced by a letter of credit or a
reimbursement obligation of such Person with respect to any letter of
credit; (b) all obligations of such Person issued or assumed as the
deferred purchase price of property or services (but excluding trade
accounts payable or accrued liabilities arising in the ordinary course of
business); (c) all net obligations of such Person under Interest Swap and
Hedging Obligations; (d) all liabilities of others of the kind described in
the preceding clauses (a), (b) or (c) that such Person has guaranteed or
that is otherwise its legal liability, or which is secured by a lien on
property of such Person, and all obligations to purchase, redeem or acquire
any Capital Stock; and (e) any and all deferrals, renewals, extensions,
modifications, replacements, restatements, refinancings and refundings
(whether direct or indirect) of, or any indebtedness or obligation issued
in exchange for, any liability of the kind described in any of the
preceding clauses (a), (b), (c) or (d), or this clause (e), whether or not
between or among the same parties.
"Interest Swap and Hedging Obligations" means the obligations of any Person
under any interest rate protection agreement, interest rate future
agreement, interest rate option agreement, interest rate swap agreement,
interest rate cap agreement or other interest rate hedge agreement,
interest rate collar agreement or other similar agreement or arrangement to
which such Person is a party or beneficiary.
"Junior Securities" means any Qualified Capital Stock and any Indebtedness
of the Company that is fully subordinated in right of payment to the Notes,
has no scheduled installment of principal due, by redemption, sinking fund
payment or otherwise, on or prior to the Stated Maturity of the Notes and
is fully subordinated in right of payment to the extent and in the manner
provided in Article XII of the Indenture to the prior payment in full of
all Senior Indebtedness of the Company, whether outstanding at the date of
the Indenture or thereafter created, incurred, assured or guaranteed.
"Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"Senior Indebtedness" means all obligations of the Company to pay the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding,
whether or not a claim for post-petition interest is allowable as a claim
in any such proceeding) and rent payable on or in connection with, and all
fees, costs, expenses and other amounts accrued or due on or in connection
with, any Indebtedness of the Company, whether outstanding on the date of
the Indenture or thereafter created, incurred, assumed, guaranteed or in
effect guaranteed by the Company, unless the instrument creating or
evidencing such Indebtedness provides that such Indebtedness is not senior
or superior in right of payment to the Notes or is pari passu with, or
subordinated to, the Notes; provided, however, that in no event shall
Senior Indebtedness include (a) Indebtedness of the Company owed or owing
to any subsidiary of the Company, (b) Indebtedness representing or with
respect to any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with
the obtaining of materials or services or (c) any liability for taxes owed
or owing by the Company or any subsidiary of the Company, but shall include
obligations of the Company under its Supplemental Retirement Income Plan.
"Significant Subsidiary" means any subsidiary which is a "significant
subsidiary" of the Company within the meaning of Rule l.02(w) of Regulation
S-X promulgated by the Commission as in effect as of the date of the
Indenture.
"Stated Maturity" when used with respect to any Note, means March 1, 2008.
"Subsidiary" with respect to any Person, means (i) a corporation a majority
of whose Capital Stock with voting power normally entitled to vote in the
election of directors is at the time, directly or indirectly, owned by such
Person, by such Person and one or more subsidiaries of such Person or by
one or more subsidiaries of such Person, (ii) a partnership in which such
Person or a subsidiary of such Person is, at the time, a general partner
and owns alone or together with one or more subsidiaries of such Person a
majority of the partnership interests, or (iii) any other Person (other
than a corporation) in which such Person, one or more subsidiaries of such
Person, or such Person and one or more subsidiaries of such Person,
directly or indirectly, at the date of determination thereof, has at least
a majority ownership interest.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of (i) 50,000,000
shares of Common Stock, par value $0.01 per share of which 18,953,980
shares of Common Stock were outstanding as of December 31, 1997 (including
1,084,101 shares of treasury stock) and (ii) 5,000,000 shares of preferred
stock, without par value (the "Preferred Stock"), of which no shares are
outstanding.
Common Stock
Holders of the Company's Common Stock are entitled to one vote for each
share on all matters submitted to a vote of stockholders and do not have
cumulative voting rights. The holders of Common Stock are entitled to
receive such dividends, if any, as may be declared by the Board of
Directors in its discretion out of funds legally available therefor. The
Credit Facility restricts the payment of dividends by the Company except in
certain limited circumstances. Subject to the rights of any Preferred Stock
outstanding, upon liquidation or dissolution of the Company, the holders of
Common Stock are entitled to receive on a pro rata basis all assets
remaining for distribution to stockholders. The Common Stock does not have
preemptive, subscription, redemption or conversion rights or sinking fund
provisions. All of the outstanding shares of Common Stock have been validly
issued and are fully paid and non-assessable. The rights, preferences and
privileges of holders of Common Stock are subject to, and may be adversely
affected by, the rights of the holders of shares of any series of Preferred
Stock which the Company may designate and issue in the future.
Preferred Stock
The Certificate authorizes the Board of Directors to establish one or more
series of Preferred Stock and to determine, with respect to any series of
Preferred Stock, the terms and rights of such series, including (i) the
designation of the series, (ii) the number of shares of the series, which
number the Board of Directors may thereafter (except where otherwise
provided in the applicable Certificate of Designations) increase or
decrease (but not below the number of shares thereof then outstanding),
(iii) whether dividends, if any, will be cumulative or noncumulative, and,
in the case of shares of any series having cumulative dividend rights, the
date or dates or method of determining the date or dates from which
dividends on the shares of such series shall be cumulative, (iv) the rate
of any dividends (or method of determining such dividends) payable to the
holders of the shares of such series, any conditions upon which such
dividends will be paid and the date or dates or the method for determining
the dates or dates upon which such dividends will be payable, (v) the
redemption rights and price or prices, if any, for shares of the series,
(vi) the terms and amount of any sinking fund provided for the purchase or
redemption of shares of the series, (vii) the amounts payable on and the
preferences, if any, of shares of the series in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the
Company, (viii) whether the shares of the series will be convertible or
exchangeable into shares of any other class or series, or any other
security, of the Company or any other corporation, and, if so, the
specification of such other class or series or such other security, the
conversion or exchange price or prices or rate or rates, any adjustments
thereof, the date or dates as of which such shares will be convertible or
exchangeable and all other terms and conditions upon which such conversion
or exchange may be made, (ix) restrictions on the issuance of shares of the
same series or of any other class or series, (x) the voting rights, if any,
of the holders of the shares of the series and (xi) any other relative
rights, preferences and limitations of such series.
The Company believes that the ability of the Board of Directors to issue
one or more series of Preferred Stock will provide the Company with
flexibility in structuring possible future finances and acquisitions, and
in meeting other corporate needs which might arise from time to time. The
authorized shares of Preferred Stock, as well as shares of Common Stock,
will be available for issuance without further action by the Company's
stockholders, unless such action is required by applicable law or the rules
of any stock exchange or automated quotation system on which the Company's
securities may be listed or traded. If the approval of the Company's
stockholders is not required for the issuance of shares of Preferred Stock
or Common Stock, the Board of Directors may determine not to seek
stockholder approval.
Although the Board of Directors has no intention at the present time of
doing so, it could issue a series of Preferred Stock that may, depending on
the terms of such series, hinder, delay or prevent the completion of a
merger, tender offer or other takeover attempt. Among other things, the
Board of Directors could issue a series of Preferred Stock having terms
that could discourage an acquisition attempt through which an acquiror may
be able to change the composition of the Board of Directors, including a
tender offer or other transaction that some, or a majority, of the
Company's stockholders might believe to be in their best interests or in
which stockholders might receive a premium for their stock over the then
current market price of such stock.
For purposes of the Rights Agreement described below, the Board of
Directors has created a series of Preferred Stock designated as the "Junior
Participating Preferred Stock" (the "Junior Preferred Stock"). An aggregate
of 500,000 shares of Preferred Stock have been reserved for issuance as
Junior Preferred Stock. Junior Preferred Stock will rank junior to all
other series of Preferred Stock that may be established by the Board of
Directors with respect to the payment of dividends and the distribution of
assets upon liquidation. In general, the voting, dividend and liquidation
rights of Junior Preferred Stock are designed in such a way that one-
hundredth of a share of Junior Preferred Stock will be substantially
equivalent from an economic point of view to one share of Common Stock.
Anti-takeover Provisions of the Certificate and By-Laws
The Certificate requires the affirmative vote of the holders of 80% of all
classes of stock of the Company entitled to vote in elections of directors,
considered for the purposes hereof as one class, for (i) the merger or
consolidation of the Company with or into any other corporation which,
together with its affiliates or associates, owns more than 10% of the
Company's outstanding shares of stock entitled to vote in elections of
directors or (ii) certain other business transactions with any person or
entity, who, together with its affiliates or associates, owns more than 10%
of the Company's outstanding shares of stock entitled to vote in elections
of directors. The approval of the holders of 80% of all classes of stock of
the Company is not required if the business transaction is approved in a
prescribed manner or one involving only the Company and its subsidiaries.
The foregoing provisions of the Certificate, as amended, may not be amended
without the affirmative vote of the holders of four-fifths of all classes
of stock of the Company entitled to vote in elections of directors,
considered for such purpose as one class.
The Certificate also provides that the By-Laws may be further amended,
altered or repealed by stockholders only by the affirmative vote of the
holders of 80% of all classes of stock of the Company entitled to vote in
elections of directors, considered for this purpose as one class. The Board
of Directors is authorized to make, alter or repeal the By-Laws without
stockholder approval.
The effect of the foregoing provisions could be to delay or prevent
attempts by other corporations or groups to acquire control of the Company
without negotiation with management.
Director Nominations
Pursuant to the By-Laws (i) any director nominations other than by the
Nominating Committee of the Board of Directors must be proposed at least 90
days before the date of the Company's Annual Meeting of Stockholders in
order for the nominee to be eligible for election to the Company's Board of
Directors and (ii) director nominations other than by the Nominating
Committee of the Board of Directors must be made over the signature of at
least five stockholders holding an aggregate of at least 5% of the total
number of outstanding shares of stock of the Company.
Delaware Law
The Company is subject to Section 203 of the DGCL. In general, Section 203
of the DGCL prohibits certain publicly held Delaware corporations from
engaging in a "business combination" with an "interested stockholder" for a
period of three years following the date of the transaction in which the
person or entity became an interested stockholder, unless the business
combination is approved in a prescribed manner or certain other exemptions
apply. For purposes of Section 203, "business combination" is defined
broadly to include mergers, asset sales and other transactions resulting in
a financial benefit to the interested stockholder. Generally, an
"interested stockholder" is any person or entity who, together with
affiliates and associates, owns (or within the three immediately preceding
years did own) 15% or more of the corporation's voting stock.
Stockholder Rights Plan
Each outstanding share of the Common Stock entitles the holder the right
(the "Rights") to purchase from the Company one one-hundredth of a share of
Junior Preferred Stock at a price of $125 per one one-hundredth of a share,
subject to adjustment. The Rights will expire on December 7, 2005 (the
"Expiration Date"), or the earlier redemption of the Rights, and are not
exercisable until the Distribution Date (as defined herein). The terms of
the Rights are set forth in a Rights Agreement dated as of December 7, 1995
(the "Rights Agreement") between the Company and Boston EquiServe (the
"Rights Agent"). This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
No separate certificates evidencing the Rights ("Rights Certificates") have
been issued. Until the Distribution Date (or earlier redemption or
expiration of the Rights), (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates issued after
December 18, 1995 (the "Dividend Record Date") upon transfer or new
issuance of the Company's Common Stock will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any of the Company's Common Stock certificates will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights will separate from the Common Stock and Rights Certificates will
be issued on the Distribution Date. Unless otherwise determined by a
majority of the Company's Board of Directors then in office, the
"Distribution Date" will occur on the earlier of (i) the fifteenth business
day following the later of the date of a public announcement that a person,
including affiliates or associates of such person (an "Acquiring Person"),
except as described below, has acquired or obtained the right to acquire,
beneficial ownership of 20% or more of the outstanding shares of Common
Stock or the date on which an executive officer of the Company has actual
knowledge that an Acquiring Person became such (the "Stock Acquisition
Date") or (ii) the fifteenth business day following commencement of a
tender offer or exchange offer that would result in any person or its
affiliates and associates owning 20% or more of the Company's outstanding
Common Stock. In any event, the Board of Directors may delay the
distribution of the certificates. After the Distribution Date, Rights
Certificates will be mailed to holders of record of the Company's Common
Stock as of the close of business on the Distribution Date and such
separate Rights Certificates alone will evidence the Rights.
If, at any time after December 7, 1995, any person or group of affiliated
or associated persons (other than the Company and its affiliates) shall
become an Acquiring Person, each holder of a Right will have the right to
receive shares of the Company's Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a market value of
two times the exercise price of the Right. If the exercise price is $125,
the holder of each Right would be entitled to receive $250 in market value
of the Company's Common Stock for $125. Also, in the event that the Company
were acquired in a merger or other business combination, or more than 25%
of its assets or earning power were sold, each holder of a Right would have
the right to exercise such Right and thereby receive common stock of the
acquiring company with a market value of two times the exercise price of
the Right. For example, if the exercise price is $125, the holder of each
Right would be entitled to receive $250 in market value of shares of the
acquiring company's common shares (e.g., two shares if the per share market
value is $125, for $125). Following the occurrence of any of the events
described in this paragraph, any Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned
by any Acquiring Person shall immediately become null and void.
The Board of Directors may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding
and exercisable Rights for shares of Common Stock at an exchange ratio of
one share of Common Stock per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
of declaration of the Rights (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). The Board of Directors, however, may
not effect an exchange at any time after any Person (other than the
Company, any subsidiary of the Company, any employee benefit plan of the
Company or any such subsidiary or any entity holding Common Stock for or
pursuant to the terms of any such plan), together with all Affiliates of
such Person, becomes the Beneficial Owner of 50% or more of the Common
Stock then outstanding. Immediately upon the action of the Board of
Directors ordering the exchange of any Rights and without any further
action and without any notice, the right to exercise such Rights will
terminate and the only right thereafter of a holder of such Rights will be
to receive that number of shares of Common Stock equal to the number of
such Rights held by the holder multiplied by the Exchange Ratio.
The exercise price of the Rights, and the number of one one-hundredth of a
share of Junior Preferred Stock or other securities or property issuable
upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Stock, (ii) upon the
grant to holders of the Preferred Stock of certain rights or warrants to
subscribe for shares of the Preferred Stock or convertible securities at
less than the current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness
or assets (excluding cash dividends paid out of the earnings or retained
earnings of the Company and certain other distributions) or of subscription
rights or warrants (other than those referred to above).
With certain exceptions, no adjustments in the exercise price of the Rights
will be required until cumulative adjustments equal at least 1% in such
price.
At any time prior to the Expiration Date, the Company, by a majority vote
of the Board of Directors, may redeem the Rights at a redemption price of
$.01 per Right (the "Redemption Price"), as described in the Rights
Agreement. Immediately upon the action of the Board of Directors electing
to redeem 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.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Neither the distribution of the Rights nor the subsequent separation of the
Rights on the Distribution Date will be a taxable event for the Company or
its stockholders. Holders of Rights may, depending upon the circumstances,
recognize taxable income upon the occurrence of a Common Stock Event. In
addition, holders of Rights may have taxable income as a result of (i) an
exchange by the Company of shares of Common Stock for Rights as described
above or (ii) certain anti-dilution adjustments made to the terms of the
Rights after the Distribution Date. A redemption of the Rights would be a
taxable event to holders.
The Rights Agreement may be amended by the Board at any time prior to the
Distribution Date without the approval of the holders of the Rights. From
and after the Distribution Date, the Rights Agreement may be amended by the
Board of Directors without the approval of the holders of the Rights in
order to cure any ambiguity, to correct any defective or inconsistent
provisions, to change any time period for redemption or any other time
period under the Rights Agreement or to make any other changes that do not
adversely affect the interests of the holders of the Rights (other than any
Acquiring Person or its affiliates, associates or transferees).
The Rights will have certain anti-takeover effects. The Rights may result
in substantial dilution to any person or group that attempts to acquire the
Company without the approval of the Board of Directors. As a result, the
overall effect of the Rights may be to render more difficult or to
discourage any attempt to acquire the Company even if such acquisition may
be on terms favorable to the Company's stockholders.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Common Stock is Boston EquiServe.
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
The following is a summary of certain material United States federal income
and estate tax considerations relating to the purchase, ownership and
disposition of the Notes and of Common Stock into which Notes may be
converted, but does not purport to be a complete analysis of all the
potential tax considerations relating thereto. This summary is based on the
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
the applicable Treasury Regulations promulgated or proposed thereunder
("Treasury Regulations"), judicial authority and current administrative
rulings and practice, all of which are subject to change, possibly on a
retroactive basis. This summary deals only with holders that will hold
Notes and Common Stock into which Notes may be converted as "capital
assets" (within the meaning of Section 1221 of the Code). This summary does
not purport to deal with all aspects of U.S. federal income taxation that
might be relevant to particular holders in light of their personal
investment circumstances or status, nor does it address tax considerations
applicable to investors that may be subject to special tax rules, such as
certain financial institutions, tax-exempt organizations, insurance
companies, dealers in securities or currencies, persons that will hold
Notes as a position in a hedging transaction, "straddle" or "conversion
transaction" for tax purposes, or persons that have a "functional currency"
other than the U.S. dollar. Moreover, the effect of any applicable state,
local or foreign tax laws is not discussed. The Company has not sought any
ruling from the Internal Revenue Service ("IRS") with respect to the
statements made and the conclusions reached in the following summary, and
there can be no assurance that the IRS will not take adverse positions on
examination. THE FOLLOWING DISCUSSION IS FOR GENERAL INFORMATION ONLY.
INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL
INCOME AND ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY
TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN
TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
United States Holders
As used herein, the term "United States Holder" means the beneficial owner
of a Note or Common Stock that for United States federal income tax
purposes is (i) a citizen or resident of the United States, (ii) treated as
a domestic corporation or domestic partnership, or (iii) an estate or trust
that is subject to United States federal income taxation on a net income
basis in respect of the Notes or Common Stock. A trust will be a "United
States Holder" of a Note only if the trust is subject to the supervision of
a court within the United States and the control of a United States
fiduciary as described in Section 7701 (a) (30) of the Code.
Payment of Interest
Interest on a Note generally will be included in the income of a United
States Holder as ordinary income at the time such interest is received or
accrued, in accordance with such Holder's method of accounting for United
States federal income tax purposes. The Notes will not have original issue
discount.
Liquidated Damages
As more fully described above under "Description of Notes-Registration
Rights; Liquidated Damages," in the event the Shelf Registration Statement
does not become effective as provided in the Registration Rights Agreement,
the Company will be required to pay liquidated damages to certain United
States Holders of the Notes and Common Stock. Under the Treasury
Regulations regarding contingent payment debt instruments, any payment
subject to a remote or incidental contingency (i.e., there is a remote
likelihood that the payment will be required or the potential amount of the
payment is insignificant relative to the remaining payments on the debt
instrument) is not considered a contingent payment and is ignored for
purposes of computing original issue discount accruals. The Company
believes that the liquidated damage payments with respect to the Notes are
subject to either a remote or incidental contingency. Accordingly, a United
States Holder of a Note should be required to report any liquidated damage
payment as interest for United States federal income tax purposes only at
the time such payment is made or properly accrued under the United States
Holder's method of accounting. The Company's position that the liquidated
damage payments are subject to a remote or incidental contingency is
binding on all holders unless the holder discloses its differing position
in a statement attached to its federal income tax return for the taxable
year during which the Note was acquired.
Amortizable Bond Premium
If a United States Holder of a Note acquires the Note at a cost that is in
excess of the amount payable at maturity (after reducing such costs by an
amount equal to the value of the conversion option), the United States
Holder may elect under Section 171 of the Code to amortize the excess cost
(as an offset to interest income) on a constant interest rate basis over
the term of such Note. However, because the Notes may be redeemed at the
option of the Company at a price in excess of their principal amount, a
United States holder may be required to amortize any bond premium based on
the earlier call date and the call price payable at that time. If the
United States Holder makes an election to amortize bond premium, the tax
basis of all such United States Holder's Notes will be reduced by the
allowable bond premium amortization. The amortization election would apply
to all debt instruments held or subsequently acquired by the electing
purchaser and cannot be revoked without permission from the IRS. On
conversion of a Note into shares of Common Stock, no additional
amortization of any bond premium would be allowed, and any remaining
premium would be added to the United States Holder's basis in the Common
Stock received.
Sale, Exchange or Redemption of the Notes
Upon the sale, exchange or redemption of a Note, subject to the market
discount rules discussed above, a United States Holder generally will
recognize capital gain or loss equal to the difference between (i) the
amount of cash proceeds and the fair market value of any property received
on the sale, exchange or redemption (except to the extent such amount is
attributable to accrued and unpaid interest not previously recognized by
such Holder which is taxable as ordinary income) and (ii) such Holder's
adjusted tax basis in the Note. A United States Holder's adjusted tax basis
in a Note generally will equal the cost of the Note to such Holder, less
any principal payments received by such Holder and increased by any market
discount previously included in income by such Holder. Such capital gain or
loss will be long-term capital gain or loss if the United States Holder's
holding period in the Note is more than 18 months, will be mid-term if the
holding period is more than 12 months and equal to or less than 18 months,
and will be short-term if the holding period is equal to or less than 12
months. Long-term capital gains are currently taxed at a maximum rate of
20%, mid-term capital gains at 28% and short-term capital gains at 39.6%.
In taxable years beginning after December 31, 2000, the long-term rate may
be reduced in certain circumstances below 20% for property held more than 5
years.
Constructive Dividends on Notes
If at any time (i) the Company makes a distribution of cash or property to
its stockholders or purchases Common Stock and such distribution or
purchase would be taxable to such stockholders as a dividend for United
States federal income tax purposes (e.g., distributions of evidences of
indebtedness or assets of the Company, but generally not stock dividends or
rights to subscribe for Common Stock) and, pursuant to the antidilution
provisions of the Indenture, the conversion price of the Notes is
decreased, or (ii) the conversion price of the Notes is decreased at the
discretion of the Company, such decrease in conversion price may be deemed
to be the payment of a taxable dividend to United States Holders of Notes
(pursuant to Section 305 of the Code) to the extent of the Company's
current or accumulated earnings and profits. Such Holders of Notes could
therefore have taxable income as a result of an event pursuant to which
they received no cash or property.
Conversion of the Notes
A United States Holder generally will not recognize any income, gain or
loss upon conversion of a Note into Common Stock, except with respect to
cash received in lieu of a fractional share of Common Stock. Such Holder's
tax basis in the Common Stock received on conversion of a Note will be the
same as such Holder's adjusted tax basis in the Note at the time of
conversion (reduced by any basis allocable to a fractional share interest),
and the holding period for the Common Stock received on conversion will
generally include the holding period of the Note converted.
Cash received in lieu of a fractional share of Common Stock upon conversion
should be treated as a payment in exchange for the fractional share of
Common Stock. Accordingly, the receipt of cash in lieu of a fractional
share of Common Stock generally should result in capital gain or loss
(measured by the difference between the cash received for the fractional
share and the United States Holder's adjusted tax basis in the fractional
share).
Dividends on the Common Stock
The amount of any distribution by the Company in respect of the Common
Stock (including any liquidated damages in respect of Common Stock as
described above under "Description of Notes-Registration Rights; Liquidated
Damages") will be equal to the amount of cash and the fair market value, on
the date of distribution, of any property distributed. Generally,
distributions will be treated as a dividend, subject to a tax as ordinary
income, to the extent of the Company's current or accumulated earnings and
profits, then as a tax-free return of capital to the extent of the Holder's
tax basis in the Common Stock and thereafter as gain from the sale or
exchange of such stock.
In general, a dividend distribution to a corporate United States Holder
will qualify for the 70% dividends received deduction if the Holder owns
less than 20% of the voting power and value of the Company's stock (other
than any non-voting, non-convertible, non-participating preferred stock). A
corporate United States Holder that owns 20% or more of the voting power
and value of the Company's stock (other than any nonvoting, non-
convertible, non-participating preferred stock) generally will qualify for
an 80% dividends received deduction. The dividends received deduction is
subject, however, to certain holding period, taxable income and other
limitations.
Sale of Common Stock
Upon the sale or exchange of Common Stock, a United States Holder generally
will recognize capital gain or loss equal to the difference between (i) the
amount of cash and the fair market value of any property received upon the
sale or exchange and (ii) such Holder's adjusted tax basis in the Common
Stock. Such capital gain or loss will be long-term if the United States
Holder's holding period in the Common Stock is more than 18 months at the
time of the sale or exchange. A United States Holder's basis and holding
period in Common Stock received upon conversion of a Note are determined as
discussed above under "-Conversion of the Notes."
Information Reporting and Backup Withholding Tax
In general, certain information is required to be reported by the payor to
the IRS with respect to payments of principal, premium, if any, and
interest on a Note (including the payment of liquidated damages under the
Registration Rights Agreement), payments of dividends on Common Stock,
payments of the proceeds of the sale of a Note and payments of the proceeds
of the sale of Common Stock to certain noncorporate United States Holders.
The payor will be required to withhold backup withholding tax at the rate
of 31% if (a) the payee fails to furnish a taxpayer identification number
("TIN") to the payor or establish an exemption from backup withholding, (b)
the IRS notifies the payor that the TIN furnished by the payee is
incorrect, (c) there has been a notified payee under reporting with respect
to interest, dividends or original issue discount described in Section
3406(c) of the Code or (d) there has been a failure of the payee to certify
under the penalty of perjury that the payee is not subject to backup
withholding under the Code. Any amounts withheld under the backup
withholding rules from a payment to a United States Holder will be allowed
as a credit against such Holder's United States federal income tax and may
entitle the Holder to a refund, provided that the required information is
furnished to the IRS.
Non-United States Holders
As used herein, the term "Non-United States Holder" means any beneficial
owner of a Note or Common Stock that is not a United States Holder.
Payment of Interest
Interest paid on a Note by the Company or any Paying Agent to a Non-United
States Holder will qualify for the "portfolio interest exemption" and
therefore, subject to the discussion of backup withholding below, will not
be subject to United States federal income tax or withholding tax, provided
that such interest income is not effectively connected with a United States
trade or business of the Non-United States Holder and provided that the
Non-United States Holder (i) does not actually or constructively own
(pursuant to the conversion feature of the Notes or otherwise) 10% or more
of the combined voting power of all classes of stock of the Company
entitled to vote, (ii) is not a controlled foreign corporation related to
the Company actually or constructively through stock ownership, (iii) is
not a bank which acquired the Notes in consideration for an extension of
credit made pursuant to a loan agreement entered into in the ordinary
course of business and (iv) either (a) provides a Form W-8 (or a suitable
substitute form) signed under penalties of perjury that includes its name
and address and certifies as to its non-United States status in compliance
with applicable law and regulations, or (b) holds the Note through a
securities clearing organization, bank or other financial institution that
holds customers' securities in the ordinary course of its trade or business
holds the Note and such institution provides a statement to the Company or
its agent under penalties of perjury in which it certifies that such a Form
W-8 (or a suitable substitute) has been received by it from the Non-United
States Holder or qualifying intermediary and furnishes the Company or its
agent with a copy thereof.
Treasury Regulations released in 1997 provide alternative methods for
satisfying the certification requirements described in clause (iv) above,
including additional information and certification procedures with respect
to Notes held by a foreign partnership. The Treasury Regulations are
effective for payments made after December 31, 1998. Generally, any
certification provided on a Form W-8 that is validly in effect prior to
January 1, 1999 will be treated as valid certification until it expires
under the Treasury Regulations or, if earlier, until December 31, 1999.
Accordingly, the alternative methods of satisfying the certification
requirements will generally not be effective until January 1, 1999 and
subsequent years.
Interest income of a Non-United States Holder that is not effectively
connected with a United States trade or business and is not exempt from tax
under the portfolio interest exemption described above will be subject to a
withholding tax at a 30% rate (or, if applicable, a lower treaty rate).
Except to the extent that an applicable treaty otherwise provides, a Non-
United States Holder generally will be taxed in the same manner as a United
States Holder with respect to interest if the interest income is
effectively connected with a United States trade or business of the Non-
United States Holder. Effectively connected interest received by a
corporate Non-United States Holder may also, under certain circumstances,
be subject to an additional "branch profits tax" at a 30% rate (or, if
applicable, a lower treaty rate). Even though such effectively connected
interest is subject to income tax, and may be subject to the branch profits
tax, it is not subject to withholding tax if the Holder delivers a properly
executed IRS Form 4224 to the payor.
Sale, Exchange or Redemption of the Notes
A Non-United States Holder of a Note will generally not be subject to
United States federal income tax or withholding tax on any gain realized on
the sale, exchange or redemption of the Note (including the receipt of cash
in lieu of fractional shares upon conversion of a Note into Common Stock
but not including any amount representing interest or accrued market
discount) unless (1) the gain is effectively connected with a United States
trade or business of the Non-United States Holder, (2) in the case of a
Non-United States Holder who is an individual, such Holder is present in
the United States for a period or periods aggregating 183 days or more
during the taxable year of the disposition and certain other requirements
are met, or (3) the Holder is subject to tax pursuant to the provisions of
the Code applicable to certain United States expatriates.
Conversion of the Notes
In general, no United States federal income tax or withholding tax will be
imposed upon the conversion of a Note into Common Stock by a Non-United
States Holder except with respect to the receipt of cash in lieu of
fractional shares by Non-United States Holders upon conversion of a Note
where any of the conditions described above under "Non-United States
Holders-Sale, Exchange or Redemption of the Notes" is satisfied.
Sale or Exchange of Common Stock
A Non-United States Holder generally will not be subject to United States
federal income tax or withholding tax on the sale or exchange of Common
Stock unless any of the conditions described above under "Non-United States
Holders-Sale, Exchange or Redemption of the Notes" is satisfied.
Dividends
Distributions by the Company with respect to the Common Stock that are
treated as dividends paid (or deemed paid), as described above under
"United States Holders-Dividends on the Common Stock" to a Non-United
States Holder (excluding dividends that are effectively connected with the
conduct of a trade or business in the United States by such Holder and are
taxable as described below) will be subject to United States federal
withholding tax at a 30% rate (or lower rate provided under any applicable
income tax treaty). Except to the extent that an applicable tax treaty
otherwise provides, a Non-United States Holder generally will be taxed in
the same manner as a United States Holder on dividends paid (or deemed
paid) that are effectively connected with the conduct of a trade or
business in the United States by the Non-United States Holder. If such Non-
United States Holder is a foreign corporation, it may also be subject to a
United States branch profits tax on such effectively connected income at a
30% rate or such lower rate as may be specified by an applicable income tax
treaty. Even though such effectively connected dividends are subject to
income tax, and may be subject to the branch profits tax, they will not be
subject to U.S. withholding tax if the Holder delivers IRS Form 4224 to the
payor.
Under currently applicable Treasury regulations, dividends paid to an
address in a foreign country are presumed to be paid to a resident of that
country (unless the payor has knowledge to the contrary) for purposes of
the withholding discussed above and, under the current interpretation of
the Treasury Regulations, for purposes of determining the applicability of
a tax treaty rate. Under Treasury Regulations released in 1997, however,
Non-United States Holders of Common Stock who wish to claim the benefit of
an applicable treaty rate would be required to satisfy certain
certification requirements, including additional information and
certification procedures with respect to Common Stock held by a foreign
partnership. The new Treasury Regulations are generally effective for
payments made after December 31, 1998.
Death of a Non-United States Holder
A Note held by an individual who is a Non-United States Holder at the time
of his or her death will not be includable in the decedent's gross estate
for United States estate tax purposes, provided that such Holder or
beneficial owner did not at the time of death actually or constructively
own 10% or more of the combined voting power of all classes of stock of the
Company entitled to vote, and provided that, at the time of death, payments
with respect to such Notes would not have been effectively connected with
the conduct by such Non-United States Holder of a trade or business within
the United States.
Common Stock actually or beneficially held by an individual who is a Non-
United States Holder at the time of his or her death (or previously
transferred subject to certain retained rights or powers) will be subject
to United States federal estate tax unless otherwise provided by an
applicable estate tax treaty.
Information Reporting and Backup Withholding Tax
United States information reporting requirements and backup withholding tax
will not apply to payments on a Note to a Non-United States Holder if the
statement described in "Non-United States Holders-Payment of Interest" is
duly provided by such Holder, provided that the payor does not have actual
knowledge that the Holder is a United States person.
Information reporting requirements and backup withholding tax will not
apply to any payment of the proceeds of the sale of a Note or any payment
of the proceeds of the sale of Common Stock effected outside the United
States by a foreign office of a "broker" (as defined in applicable Treasury
Regulations), unless such broker is (i) a United States person, (ii) a
foreign person that derives 50% of more of its gross income for certain
periods from activities that are effectively connected with the conduct of
a trade or business in the United States or (iii) a controlled foreign
corporation for United States federal income tax purposes. Payment of the
proceeds of any such sale effected outside the United States by a foreign
office of any broker that is described in (i), (ii) or (iii) of the
preceding sentence will not be subject to backup withholding tax, but will
be subject to information reporting requirements unless such broker has
documentary evidence in its records that the beneficial owner is a Non-
United States Holder and certain other conditions are met, or the
beneficial owner otherwise establishes an exemption. Payment of the
proceeds of any such sale to or through the United States office of a
broker is subject to information reporting and backup withholding
requirements, unless the beneficial owner of the Note provides the
statement described in "Non-United States Holders-Payment of Interest" or
otherwise establishes an exemption.
If paid to an address outside the United States, dividends on Common Stock
held by a Non-United States Holder will generally not be subject to the
information reporting and backup withholding requirements described in this
section, provided that the payor does not have actual knowledge that the
Holder is a United States person. However, under Treasury Regulations
issued in 1997, dividend payments will be subject to information reporting
and backup withholding unless applicable certification requirements are
satisfied, including additional information and certification procedures
with respect to Common Stock held by a foreign partnership. The new
Treasury Regulations generally apply to dividend payments made after
December 31, 1998.
United States Real Property Holding Corporation
The discussion of the United States taxation of Non-United States Holders
of Notes and Common Stock assumes that the Company is at no time a United
States real property holding corporation (a "USRPHC") within the meaning of
Section 897(c) of the Code. Under present law, a corporation is a USRPHC is
(a) the fair market value of its United States real property interests is
equal to or exceeds (b) 50% of the sum of the fair market value of its
United States real property interest, its interests in real property
located outside the United States, and its other assets which are used or
held for use in a trade or business. If the Company were a USRPHC, then
gain or loss realized by a non-United States Holder from the sale or other
disposition of Common Stock, or interests in the Company convertible into
Common Stock, such as the Notes, would in certain circumstances be taken
into account for federal income tax purposes as if such gain or loss were
effectively connected with a trade or business conducted by the Holder
within the United States.
The Company does not currently believe that it is a USRPHC. Even if the
Company becomes a USRPHC, a non-United States Holder would generally not be
subject to tax, or withholding in respect of such tax, on gain from a sale
or other disposition of the Notes or Common Stock solely by reason of the
Company's USRPHC status if (i) the Common Stock is "regularly traded on an
established securities market" within the meaning of the Code ("regularly
traded") and (ii) either (A) the Non-United States Holder disposing of
Common Stock did not own, actually or constructively, at any time during
the five-year period preceding the disposition, more than 5% of the Common
Stock, or (B) in the case of a disposition of the Notes, the Non-United
States Holder did not own, actually or constructively, Notes which, as of
any date on which such Holder acquired Notes, had a fair market value
greater than that of 5% of the Common Stock. The Company believes that the
Common Stock will be treated as regularly traded.
The Company
Under Section 279 of the Code, interest paid or incurred by a corporation
with respect to certain convertible, subordinated indebtedness that is
utilized to provide consideration for the acquisition of stock in another
corporation (or a substantial portion of the assets of another corporation)
is not deductible for federal income tax purposes to the extent interest on
such "corporate acquisition indebtedness" as defined in Section 279 exceeds
$5 million per year, reduced by the interest paid on certain other
indebtedness that does not constitute "corporate acquisition indebtedness"
for purposes of Section 279, but is used to fund corporate acquisitions.
The Notes may constitute "corporate acquisition indebtedness" for purposes
of Section 279 of the Code, which could result in all or a portion of the
interest payments under the Notes not being deductible for federal income
tax purposes. Although there can be no assurance, the Company does not
anticipate that any significant portion of the interest deductions with
respect to the Notes will be disallowed pursuant to Section 279.
SELLING SECURITYHOLDERS
The Notes were originally acquired from the Company by the Initial
Purchasers on February 25, 1998. The Initial Purchasers have advised the
Company that the Initial Purchasers resold the notes in transactions exempt
from the registration requirements of the Securities Act to "qualified
institutional buyers" (as defined in Rule 144A of the Securities Act) and
outside the United States to certain persons in offshore transactions in
reliance on Regulation S under the Securities Act. These subsequent
purchasers, or their transferees, pledgees, donees or successors, may from
time to time offer and sell any or all of the Notes and/or Shares pursuant
to this Prospectus.
The Notes and the Shares are being registered pursuant to the Registration
Rights Agreement, which provides that the Company file the Shelf
Registration Statement with regard to the Notes and the Shares within 90
days of the date of original issuance of the Notes and use its reasonable
best efforts to cause such Shelf Registration Statement to become effective
within 180 days of the original issuance of the Notes and to keep such
Shelf Registration Statement continuously effective for a period of at
least two years following such effective date or such shorter period as
will terminate upon the earlier of either (a) when all Transfer Restricted
Securities covered by such Shelf Registration Statement have been sold
pursuant thereto and (b) when, in the written opinion of independent
counsel to the Company, all outstanding Transfer Restricted Securities held
by persons that are not affiliates of the Company may be resold without
registration under the Securities Act pursuant to Rule 144(k) under the
Securities Act or any successor provision thereto. Although none of the
Selling Securityholders has advised the Company that it currently intends
to sell all or any of the Notes or Shares pursuant to this Prospectus, the
Selling Securityholders may choose to sell the Notes and/or Shares from
time to time upon notice to the Company. See "Plan of Distribution."
Prior to any use of this Prospectus in connection with an offering of the
Notes and/or Shares, this Prospectus will be supplemented to set forth the
name and number of shares beneficially owned by the Selling Securityholder
intending to sell such Notes and/or Shares and the number of Notes and/or
Shares to be offered. The Prospectus Supplement will also disclose whether
any Selling Securityholder selling in connection with such Prospectus
Supplement has held any position or office with, been employed by or
otherwise has had a material relationship with, the Company or any of its
affiliates during the three years prior to the date of the Prospectus
Supplement.
PLAN OF DISTRIBUTION
The Notes and the Shares are being registered to permit public secondary
trading of such securities by the holders thereof from time to time after
the date of this Prospectus. The Company has agreed, among other things,
to bear all expenses (other than underwriting discounts and selling
commissions) in connection with the registration and sale of the Notes and
the Shares covered by this Prospectus.
The Company will not receive any of the proceeds from the offering of Notes
or the Shares by the Selling Securityholders. The Company has been advised
by the Selling Securityholders that the Selling Securityholders may sell
all or a portion of the Notes and Shares beneficially owned by them and
offered hereby from time to time on any exchange on which the securities
are listed on terms to be determined at the times of such sales. The
Selling Securityholders may also make private sales directly or through a
broker or brokers. Alternatively, any of the Selling Securityholders may
from time to time offer the Notes or the Shares beneficially owned by them
through underwriters, dealers or agents, who may receive compensation in
the form of underwriting discounts, commissions or concessions from the
Selling Securityholders and the purchasers of the Notes or Shares for whom
they may act as agent. The aggregate proceeds to the Selling
Securityholders from the sale of the Notes or Shares offered by them hereby
will be the purchase price of such Notes or Shares less discounts and
commissions, if any.
The Notes and the Shares may be sold from time to time in one or more
transactions at fixed offering prices, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices
will be determined by the holders of such securities or by agreement
between such holders and underwriters or dealers who may receive fees or
commissions in connection therewith.
The outstanding Common Stock is listed for trading on the New York Stock
Exchange and the Pacific Exchange, Inc., and the Shares have been approved
for listing on the New York Stock Exchange and the Pacific Exchange, Inc.
Although the Company has been advised by the Initial Purchasers that they
are currently making a market in the Notes, they are not obligated to do so
and may discontinue such market making at any time without notice.
Accordingly, there can be no assurance that any market for the Notes will
be maintained. See "Risk Factors- Absence of Existing Market for Notes."
The Selling Securityholders and any broker and any broker-dealers, agents
or underwriters that participate with the Selling Securityholders in the
distribution of the Notes or the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act, in which event any commissions
received by such broker-dealers, agents or underwriters and any profit on
the resale of the Notes or the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold
under Rule 144 or Rule 144A rather than pursuant to this Prospectus. There
is no assurance that any Selling Securityholder will sell any or all of the
Notes or Shares described herein, and any Selling Securityholder may
transfer, devise or gift such securities by other means not described
herein.
The Notes were issued and sold in February 1998 in transactions exempt from
the registration requirements of the Securities Act to persons reasonably
believed by the Initial Purchasers to be "qualified institutional buyers"
(as defined in Rule 144A under the Securities Act) or institutional
"accredited investors" (as defined in Rule 510(a)(1), (2), (3) or (7) under
the Securities Act) or outside the United States to certain persons in
offshore transactions in reliance on Regulation S under the Securities Act.
Pursuant to the Registration Rights Agreement, the Company has agreed to
indemnify each Initial Purchaser and each Selling Securityholder, and each
Selling Securityholder has agreed to indemnify the Company, each Initial
Purchaser and each other Selling Stockholder against certain liabilities
arising under the Securities Act.
The Company has agreed to use its reasonable best efforts to cause the
Shelf Registration Statement to which this Prospectus relates to become
effective within 180 days of the original issuance of the Notes and to use
its reasonable best efforts to keep the Shelf Registration Statement
effective for a period of two years from the effective date thereof, or
until the Shelf Registration is no longer required for transfer of the
Notes or the Shares. The Company may prohibit offers and sales of Notes
and Shares pursuant to the Shelf Registration Statement to which this
Prospectus relates at any time if (A)(i) it is in possession of material
non-public information, (ii) the Board of Directors of the Company or the
Executive Committee thereof determines (based on advice of counsel) that
such prohibition is necessary in order to avoid a requirement to disclose
such material non-public information and (iii) the Board of Directors of
the Company or the Executive Committee thereof determines in good faith
that disclosure of such material non-public information would not be in the
best interests of the Company and its shareholders or (B) the Company has
made a public announcement relating to an acquisition or business
combination transaction including the Company and/or one or more of its
subsidiaries (i) that is material to the Company and its subsidiaries taken
as a whole and (ii) the Board of Directors of the Company or the Executive
Committee thereof determines in good faith that offers and sales of Notes
and Shares pursuant to the Shelf Registration Statement to which this
Prospectus relates prior to the consummation of such transaction (or such
earlier date as the Board of Directors or the Executive Committee thereof
shall determine) is not in the best interests of the Company and its
shareholders. Expenses of preparing and filing the Shelf Registration
Statement to which this Prospectus relates and all post-effective
amendments thereto will be borne by the Company.
LEGAL MATTERS
Certain legal matters with respect to the legality of the issuance of the
Notes and Shares offered hereby will be passed upon for the Company by
Ropes and Gray, Boston, Massachusetts.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
1997, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations not contained in this Prospectus
and, if given or made, such information or representations must not be
relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or the solicitation of any offer to buy any
of the securities offered hereby in any jurisdiction to any person to whom
it is unlawful to make such offer in such jurisdiction. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that information contained herein is
correct as of any time subsequent to the date hereof or that there has been
no change in the affairs of the Company since that date.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
Available Information 2
Incorporation of Certain Information
by Reference 2
The Company 3
Risk Factors 4
Ratio of Earnings to Fixed Charges 7
Use of Proceeds 8
Description of Notes 8
Description of Capital Stock 23
Certain United States Federal Tax
Consequences 27
Selling Securityholders 34
Plan of Distribution 34
Legal Matters 36
Experts 36
</TABLE>
$100,000,000
OAK INDUSTRIES INC.
47/8% Convertible Subordinated Notes Due 2008
PROSPECTUS
_______, 1998
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses in connection with the
issuance of the securities being registered. All of the amounts shown are
estimates except the SEC registration fee. Such expenses will be borne by
the Company.
<TABLE>
<CAPTION>
Amount
------
<S> <C>
SEC registration fee $29,500
Printing and engraving expenses 3,000
Legal fees and expenses 15,000
Trustee's fees and expenses 5,000
Accounting fees and expenses 5,000
Miscellaneous 3,000
-------
Total $60,500
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of such corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of
such corporation, or is or was serving at the request of such corporation
as a director, officer, employee or agent of another corporation or
enterprise. A corporation may indemnify such person against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding if such person acted in good faith and
in a manner such person reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful. A Delaware corporation may indemnify officers and directors in
an action by or in the right of the corporation to procure a judgment in
its favor under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged
to be liable to the corporation. Where a present or former officer or
director is successful on the merits or otherwise in the defense of any
action referred to above, the corporation must indemnify such person
against the expenses (including attorneys' fees) which such person actually
and reasonably incurred in connection therewith. The indemnification
provided is not deemed to be exclusive of any other rights to which an
officer or director may be entitled under any corporation's by-laws,
agreement, vote or otherwise.
In accordance with Section 145 of the Delaware General Corporation Law, the
Restated Certificate of Incorporation, as amended, of the Registrant
contains the following provisions with respect to indemnification of
directors, officers, employees, or agents of the Registrant and with
respect to limitations on the personal liability of directors of the
Registrant:
"TWELFTH: . . . The Corporation shall, to the fullest extent to which it is
empowered to do so by the General Corporation Law of Delaware, or any other
applicable laws, as from time to time in effect, indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director or officer of the Corporation or a division thereof, or is or was
serving at the request of the Corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise,
against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding.
The provisions of this Article shall be deemed to be a contract between the
Corporation and each director or officer who serves in any such capacity at
any time while this Article and the relevant provisions of the General
Corporation Law of Delaware or other applicable law, if any, are in effect,
and any repeal or modification of any such law shall not affect any rights
or obligations then existing with respect to any state of facts then or
therefore existing or any action, suit or proceeding theretofore or
thereafter brought or threatened based in whole or in part upon any such
state of facts.
Persons who are not covered by the foregoing provisions of this Article and
who are or were employees or agents of the Corporation or a division
thereof, or are or were serving at the request of the Corporation as
employees or agents of another corporation, partnership, joint venture,
trust or other enterprise, may be indemnified to the extent authorized at
any time or from time to time by the Board of Directors of the Corporation.
The indemnification provided or permitted by this Article shall not be
deemed exclusive of any other rights to which those indemnified may be
entitled by law or otherwise, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
The corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under the provisions of this
Article.
THIRTEENTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which
the director derived any improper personal benefit. If the Delaware
General Corporation Law is amended after approval by the stockholders of
this article to authorize corporate action further eliminating or limiting
the personal liability of directors, then the liability of a director of
the Corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or
modification."
In addition to restating the language of ARTICLE TWELFTH of the Company's
Restated Certificate of Incorporation, as amended, the Company's by-laws
provide that the Company may, although it is not so required, indemnify any
person by reason of the fact that such person is or was a director,
officer, employee or agent of a constituent corporation absorbed in a
consolidation or merger in which the corporation was the resulting or
surviving corporation.
Item 16. Exhibits
4.1 Form of Note (included in Exhibit 4.2)
4.2 Indenture between the Registrant and the Trustee dated as of
February 25, 1998
4.3 Registration Rights Agreement dated as of February 20, 1998 between
the Registrant and Donaldson, Lufkin and Jenrette Securities Corporation,
Lehman Brothers and Cowen and Company
5.1 Opinion of Ropes and Gray
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Powers of Attorney
25.1 Statement of Eligibility of Trustee (Form T-1)
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purposes of determining any liability under the
Securities Act of 1933, 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; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described under Item 15 above, 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 of 1933, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 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 Waltham, Commonwealth of
Massachusetts on the 10th day of April, 1998.
OAK INDUSTRIES INC.
By: /s/ William S. Antle III
------------------------
William S. Antle III
President, Chief Executive
Officer and Chairman of the Board
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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ William S. Antle III
- -----------------------------
William S. Antle III President, Chief Executive
Officer, Director and Chairman
of the Board April 10, 1998
/s/ Coleman S. Hicks
- -----------------------------
Coleman S. Hicks Senior Vice President and Chief
Financial Officer April 10, 1998
*
- -----------------------------
Roderick M. Hills Vice Chairman of the Board April 14, 1998
*
- -----------------------------
Beth L. Bronner Director April 14, 1998
*
- -----------------------------
Daniel W. Derbes Director April 14, 1998
*
- ----------------------------
George W. Leisz Director April 14, 1998
*
- -----------------------------
Gilbert E. Matthews Director April 14, 1998
*
- -----------------------------
Christopher H.B. Mills Director April 14, 1998
*
- -----------------------------
Elliot L. Richardson Director April 14, 1998
</TABLE>
* The undersigned attorney-in-fact, by signing her name below, does
hereby sign this Registration Statement on behalf of the above indicated
directors of Oak Industries Inc. pursuant to a power of attorney executed
by such persons and filed with the Securities and Exchange Commission
contemporaneously herewith.
By: /s/ Mela Lew
------------------------
Attorney-in-Fact
OAK INDUSTRIES INC.,
Issuer,
and
STATE STREET BANK AND TRUST COMPANY
Trustee
-------------------
INDENTURE
Dated as of February 25, 1998
-------------------
$100,000,000
4 7/8% Convertible Subordinated Notes due 2008
TABLE OF CONTENTS
Page
----
ARTICLE I.DEFINITIONS AND INCORPORATION BY REFERENCE..................1
SECTION 1.1. Definitions..........................................1
SECTION 1.2. Incorporation by Reference of TIA...................10
SECTION 1.3. Rules of Construction...............................10
ARTICLE II.THE SECURITIES............................................11
SECTION 2.1. Form and Dating.....................................11
SECTION 2.2. Execution and Authentication........................11
SECTION 2.3. Registrar and Paying Agent..........................12
SECTION 2.4. Paying Agent to Hold Assets in Trust................13
SECTION 2.5. Securityholder Lists................................13
SECTION 2.6. Transfer and Exchange...............................13
SECTION 2.7. Replacement Securities..............................20
SECTION 2.8. Outstanding Securities..............................21
SECTION 2.9. Treasury Securities.................................21
SECTION 2.10. Temporary Securities...............................21
SECTION 2.11. Cancellation.......................................22
SECTION 2.12. Defaulted Interest.................................22
ARTICLE III.REDEMPTION................................................23
SECTION 3.1. Right of Redemption.................................23
SECTION 3.2. Notices to Trustee..................................23
SECTION 3.3. Selection of Securities to Be Redeemed..............24
SECTION 3.4. Notice of Redemption................................24
SECTION 3.5. Effect of Notice of Redemption......................25
SECTION 3.6. Deposit of Redemption Price.........................26
SECTION 3.7. Securities Redeemed in Part.........................26
ARTICLE IV.COVENANTS..................................................27
SECTION 4.1. Payment of Securities...............................27
SECTION 4.2. Maintenance of Office or Agency.....................27
SECTION 4.3. Corporate Existence.................................28
SECTION 4.4. Payment of Taxes and Other Claims...................28
SECTION 4.5. Maintenance of Properties and Insurance.............28
SECTION 4.6. Compliance Certificate; Notice of Default...........29
SECTION 4.7. Reports.............................................29
SECTION 4.8. Limitation on Status as Investment Company..........30
SECTION 4.9. Waiver of Stay, Extension or Usury Laws.............30
SECTION 4.10. Rule 144A Information Requirement..................30
SECTION 4.11. Registration Rights Agreement......................31
ARTICLE V.SUCCESSOR CORPORATION.......................................31
SECTION 5.1. Limitation on Merger, Sale or Consolidation.........31
SECTION 5.2. Successor Corporation Substituted...................31
ARTICLE VI.EVENTS OF DEFAULT AND REMEDIES.............................32
SECTION 6.1. Events of Default...................................32
SECTION 6.2. Acceleration of Maturity Date; Rescission and
Annulment.........................................34
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement
by Trustee........................................35
SECTION 6.4. Trustee May File Proofs of Claim....................36
SECTION 6.5. Trustee May Enforce Claims Without Possession of
Securities........................................37
SECTION 6.6. Priorities..........................................37
SECTION 6.7. Limitation on Suits.................................38
SECTION 6.8. Unconditional Right of Holders to Receive Principal,
Premium, Interest and Liquidated Damages..........39
SECTION 6.9. Rights and Remedies Cumulative......................39
SECTION 6.10. Delay or Omission Not Waiver.......................39
SECTION 6.11. Control by Holders.................................39
SECTION 6.12. Waiver of Past Default.............................40
SECTION 6.13. Undertaking for Costs..............................40
SECTION 6.14. Restoration of Rights and Remedies.................41
ARTICLE VII.TRUSTEE...................................................41
SECTION 7.1. Duties of Trustee...................................41
SECTION 7.2. Rights of Trustee...................................42
SECTION 7.3. Individual Rights of Trustee........................44
SECTION 7.4. Trustee's Disclaimer................................44
SECTION 7.5. Notice of Default...................................44
SECTION 7.6. Reports by Trustee to Holders.......................44
SECTION 7.7. Compensation and Indemnity..........................45
SECTION 7.8. Replacement of Trustee..............................46
SECTION 7.9. Successor Trustee by Merger, Etc....................47
SECTION 7.10. Eligibility; Disqualification......................47
SECTION 7.11. Preferential Collection of Claims Against Company..47
SECTION 7.12. Other Capacities...................................47
ARTICLE VIII.SATISFACTION AND DISCHARGE...............................48
SECTION 8.1. Satisfaction and Discharge of Indenture.............48
SECTION 8.2. Repayment to the Company............................48
ARTICLE IX.AMENDMENTS, SUPPLEMENTS AND WAIVERS........................48
SECTION 9.1. Supplemental Indentures Without Consent of Holders..48
SECTION 9.2. Amendments, Supplemental Indentures and Waivers
with Consent of Holders...........................49
SECTION 9.3. Compliance with TIA.................................50
SECTION 9.4. Revocation and Effect of Consents...................51
SECTION 9.5. Notation on or Exchange of Securities...............51
SECTION 9.6. Trustee to Sign Amendments, Etc.....................52
ARTICLE X.MEETINGS OF SECURITYHOLDERS.................................52
SECTION 10.1. Purposes for Which Meetings May Be Called..........52
SECTION 10.2. Manner of Calling Meetings.........................52
SECTION 10.3. Calling of Meetings by the Company or Holders......53
SECTION 10.4. Who May Attend and Vote at Meetings................53
SECTION 10.5. Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment..............54
SECTION 10.6. Voting at the Meeting and Record to Be Kept........54
SECTION 10.7. Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting...........55
ARTICLE XI.RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL.......55
SECTION 11.1. Repurchase of Securities at Option of the Holder
Upon a Change of Control.........................55
SECTION 11.2. Rescission of Change of Control Determination......58
ARTICLE XII.SUBORDINATION.............................................58
SECTION 12.1. Securities Subordinated to Senior Indebtedness.....58
SECTION 12.2. No Payment on Securities in Certain Circumstances..59
SECTION 12.3. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or
Reorganization...................................60
SECTION 12.4. Securityholders to Be Subrogated to Rights of Holders
of Senior Indebtedness...........................61
SECTION 12.5. Obligations of the Company Unconditional...........62
SECTION 12.6. Trustee and Other Agents Entitled to Assume Payments
Not Prohibited in Absence of Notice..............63
SECTION 12.7. Application by Trustee of Assets Deposited with It.63
SECTION 12.8. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness.63
SECTION 12.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities......................64
SECTION 12.10. Right of Trustee to Hold Senior Indebtedness......64
SECTION 12.11. Article XII Not to Prevent Events of Default......64
SECTION 12.12. No Duty of Trustee and Other Agents to Holders of
Senior Indebtedness.............................64
ARTICLE XIII.CONVERSION OF SECURITIES.................................65
SECTION 13.1. Conversion Privilege...............................65
SECTION 13.2. Exercise of Conversion Privilege...................65
SECTION 13.3. Fractional Interests...............................66
SECTION 13.4. Conversion Price...................................67
SECTION 13.5. Adjustment of Conversion Price.....................67
SECTION 13.6. Continuation of Conversion Privilege in Case of
Reclassification, Change, Merger, Consolidation or
Sale of Assets...................................72
SECTION 13.7. Notice of Certain Events...........................73
SECTION 13.8. Taxes on Conversion................................74
SECTION 13.9. Company to Provide Stock...........................75
SECTION 13.10. Disclaimer of Responsibility for Certain Matters..75
SECTION 13.11. Return of Funds Deposited for Redemption of
Converted Securities............................76
ARTICLE XIV.MISCELLANEOUS.............................................76
SECTION 14.1. TIA Controls.......................................76
SECTION 14.2. Notices............................................76
SECTION 14.3. Communications by Holders with Other Holders.......77
SECTION 14.4. Certificate and Opinion as to Conditions Precedent.77
SECTION 14.5. Statements Required in Certificate or Opinion......78
SECTION 14.6. Rules by Trustee, Paying Agent, Registrar..........78
SECTION 14.7. Legal Holidays.....................................78
SECTION 14.8. Governing Law......................................78
SECTION 14.9. No Adverse Interpretation of Other Agreements......79
SECTION 14.10. No Recourse Against Others........................79
SECTION 14.11. Successors........................................79
SECTION 14.12. Duplicate Originals...............................79
SECTION 14.13. Severability......................................80
SECTION 14.14. Table of Contents, Headings, Etc..................80
SECTION 14.15. Qualification of Indenture........................80
SECTION 14.16. Registration Rights...............................80
EXHIBIT A - Form of Security.........................................A-1
EXHIBIT B - Accredited Investor Letter...............................B-1
EXHIBIT C - Form of Conversion Notice................................C-1
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ------- ---------
<C> <C>
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.8;
7.10;
14.2
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.5
(b) 14.3
(c) 14.3
313(a) 7.6
(b)(1) N.A.
(b)(2) 7.6
(c) 7.6;
14.2
(d) 7.6
314(a) 4.6;
13.2
(b) N.A.
(c)(1) 2.2;
7.2;
14.4
(c)(2) 7.2;
14.4
(c)(3) N.A.
(d) N.A.
(e) 14.5
(f) N.A.
315(a) 7.1(b)
(b) 7.5;
7.6;
14.2
(c) 7.1(a)
(d) 2.8;
6.11;
7.1(b)(c)
(e) 6.13
316(a)(last sentence) 2.9
(a)(1)(A) 6.11
(a)(1)(B) 6.12
(a)(2) N.A.
(b) 6.12;
6.7
317(a)(1) 6.3
(a)(2) 6.4
(b) 2.4
318(a) 14.1
</TABLE>
- ----------------------------
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed a
part of the Indenture.
INDENTURE, dated as of February 25, 1998, between OAK INDUSTRIES INC., a
Delaware corporation (the "Company"), and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, as Trustee.
Each party hereto agrees as follows for the benefit of each other party and
for the equal and ratable benefit of the Holders of the Company's 4 7/8%
Convertible Subordinated Notes due 2008:
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Acceleration Notice" shall have the meaning specified in Section 6.2.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
For purposes of this definition, the terms "control," "controlling" and
"controlled" mean the power to direct the management and policies of a
person, directly or through one or more intermediaries, whether through the
ownership of voting securities, by contract, or otherwise.
"Agent" means the Trustee and any Registrar, Paying Agent, co-Registrar,
authenticating agent or Securities Custodian.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal, state
or foreign law for the relief of debtors.
"Beneficial Owner" for purposes of the definition of Change of Control has
the meaning attributed to it in Rules 13d-3 and 13d-5 under the Exchange
Act (as in effect on the Issue Date), whether or not applicable, except
that a "person" shall be deemed to have "beneficial ownership" of all
shares that any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time or upon the
occurrence of certain events.
"Board of Directors" means, with respect to any person, the Board of
Directors of such person or any committee of the Board of Directors of such
person authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such person.
"Board Resolution" means, with respect to any person, a duly adopted
resolution of the Board of Directors of such person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York or
Boston, Massachusetts are authorized or obligated by law or executive order
to close.
"Capitalized Lease Obligation" means, as to any Person, the obligation of
such Person to pay rent or other amounts under a lease to which such Person
is a party that is required to be classified and accounted for as a capital
lease obligation under GAAP.
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Cash" means such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and
private debts.
"Change of Control" means (i) an event or series of events as a result of
which any "person" or "group" (as such terms are used in Sections 13(d)(3)
and 14(d) of the Exchange Act) (excluding the Company or any wholly owned
subsidiary thereof) is or becomes, directly or indirectly, the Beneficial
Owner of more than 50% of the Voting Stock, (ii) the completion of any
consolidation with or merger of the Company into any other Person, or sale,
conveyance, transfer or lease by the Company of all or substantially all of
its assets to any Person, or any merger of any other Person into the
Company in a single transaction or series of related transactions, and, in
the case of any such transaction or series of related transactions, the
outstanding Common Stock of the Company is changed or exchanged as a
result, unless the stockholders of the Company immediately before such
transaction own, directly or indirectly, immediately following such
transaction, at least a majority of the combined voting power of the
outstanding voting securities of the Person resulting from such transaction
in substantially the same proportion as their ownership of the Voting Stock
immediately before such transaction, or (iii) such time as the Continuing
Directors do not constitute a majority of the Board of Directors of the
Company (or, if applicable, a successor corporation to the Company);
provided that a Change of Control shall not be deemed to have occurred if
either (x) the last sale price of the Common Stock for any five Trading
Days during the 10 Trading Days immediately preceding the day of the Change
of Control is at least equal to 105% of the Conversion Price in effect on
such day, or (y) with respect to a merger or consolidation otherwise
constituting a Change of Control described in clause (ii) above, at least
90% of the consideration in such transaction or transactions consists of
shares of common stock or securities convertible into shares of common
stock that are, or upon issuance will be, traded on a United States
national securities exchange or approved for quotation on the Nasdaq
National Market.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Company's common stock, par value $.01 per share,
or as such stock may be reconstituted from time to time.
"Company" means the party named as such in this Indenture until a successor
replaces it pursuant to the Indenture, and thereafter means such successor.
"Continuing Director" means at any date a member of the Company's Board of
Directors (i) who was a member of such board on the Issue Date or (ii) who
was nominated or elected by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Company's Board of Directors was recommended or endorsed by
at least a majority of the directors who were Continuing Directors at the
time of such nomination or election.
"Conversion Price" shall have the meaning specified in Section 13.4.
"Conversion Shares" shall have the meaning specified in Section 13.5(l).
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"Date of Conversion" shall have the meaning specified in Section 13.2.
"Default" means any event or condition that is, or after notice or passage
of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning specified in Section 2.12.
"Definitive Securities" means Securities that are in the form of Security
attached hereto as Exhibit A that do not include the information called for
by footnotes 1 and 3 thereof.
"Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the person specified in Section 2.3 as the
Depositary with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such
successor.
"Disqualified Capital Stock" means, with respect to the Company, Capital
Stock of the Company that, by its terms or by the terms of any security
into which it is convertible, exercisable or exchangeable, is, or upon the
happening of an event or the passage of time would be, required to be
redeemed or repurchased (including at the option of the holder thereof) by
the Company, in whole or in part, on or prior to the Stated Maturity of the
Notes, provided that only the portion of such Capital Stock which is so
convertible, exercisable, exchangeable or redeemable or subject to
repurchase prior to such Stated Maturity shall be deemed to be Disqualified
Capital Stock.
"Distribution Date" shall have the meaning specified in Section 13.5(l).
"DTC" shall have the meaning specified in Section 2.3.
"Event of Default" shall have the meaning specified in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Expiration Time" shall have the meaning specified in Section 13.5(f).
"GAAP" means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as approved by a significant segment
of the accounting profession which are in effect in the United States;
provided, however, that for purposes of determining compliance with
covenants in the Indenture, "GAAP" means such generally accepted accounting
principles which are in effect as of the Issue Date.
"Global Security" means a Security that contains the paragraph referred to
in footnote 1 and the additional schedule referred to in footnote 3 to the
form of Security attached hereto as Exhibit A. There shall be separate
Global Securities, with separate CUSIP Numbers, to evidence interests (x)
in the Securities held by "qualified institutional buyers," as defined in
Rule 144A under the Securities Act, and (y) in the Securities held by
persons who acquired their interest in the Securities in compliance with
Regulation S under the Securities Act.
"Holder" or "Securityholder" means the person in whose name a Security is
registered on the Registrar's books.
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such Person,
(i) in respect of borrowed money (whether or not the lender has recourse to
all or any portion of the assets of such Person), (ii) evidenced by credit
or loan agreements, bonds, notes, debentures or similar instruments
(including, without limitation, notes or similar instruments given in
connection with the acquisition of any business, properties or assets of
any kind), (iii) evidenced by bankers' acceptances or similar instruments
issued or accepted by banks, (iv) for the payment of money relating to a
Capitalized Lease Obligation or (v) evidenced by a letter of credit or a
reimbursement obligation of such Person with respect to any letter of
credit; (b) all obligations of such Person issued or assumed as the
deferred purchase price of property or services (but excluding trade
accounts payable or accrued liabilities arising in the ordinary course of
business); (c) all net obligations of such person under Interest Swap and
Hedging Obligations; (d) all liabilities of others of the kind described in
the preceding clauses (a), (b) or (c) that such Person has guaranteed or
that is otherwise its legal liability, or which is secured by a lien on
property of such Person, and all obligations to purchase, redeem or acquire
any Capital Stock; and (e) any and all deferrals, renewals, extensions,
modifications, replacements, restatements, refinancings and refundings
(whether direct or indirect) of, or any indebtedness or obligation issued
in exchange for, any liability of the kind described in any of the
preceding clauses (a), (b), (c) or (d), or this clause (e), whether or not
between or among the same parties.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette Securities
Corporation, Lehman Brothers Inc. and Cowen & Company.
"Interest Payment Date" means the stated due date of an installment of
interest on the Securities.
"Interest Swap and Hedging Obligation" means the obligations of any Person
under any interest rate protection agreement, interest rate future
agreement, interest rate option agreement, interest rate swap agreement,
interest rate cap agreement or other interest rate hedge agreement,
interest rate collar agreement or other similar agreement or arrangement to
which such Person is a party or beneficiary.
"Issue Date" means the date of first issuance of the Securities under this
Indenture.
"Junior Securities" means any Qualified Capital Stock and any Indebtedness
of the Company that is fully subordinated in right of payment to the
Securities, has no scheduled installment of principal due, by redemption,
sinking fund payment or otherwise, on or prior to the Stated Maturity of
the Securities and is fully subordinated in right of payment to the extent
and in the manner provided in Article XII hereof, to the prior payment in
full of all Senior Indebtedness of the Company, whether outstanding at the
date of this Indenture or thereafter created, incurred, assured or
guaranteed.
"Last Sale Price" shall have the meaning specified in Section 13.3.
"Legal Holiday" shall have the meaning specified in Section 14.7.
"Lien" means any mortgage, lien, pledge, charge, security interest or other
encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including, without limitation, any
conditional sale or other title retention agreement and any lease deemed to
constitute a security interest and any option or other agreement to give
any security interest).
"Liquidated Damages" shall have the meaning specified in the Registration
Rights Agreement.
"Non-Electing Share" shall have the meaning specified in Section 13.6.
"Non-Payment Default" shall have the meaning specified in Section 12.2(b).
"Notice of Default" shall have the meaning specified in Section 6.1(3), (4)
or (5).
"Offer" shall have the meaning specified in Section 13.5(f).
"Officer" means, with respect to the Company, the Chief Executive Officer,
the President, any Senior Vice President, any Vice President, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
or the Secretary or the Assistant Secretary of the Company.
"Officers' Certificate" means, with respect to the Company, a certificate
signed by two Officers of the Company and otherwise complying with the
requirements of Section 2.2, if applicable, and Sections 14.4 and 14.5.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee and which complies with the
requirements of Sections 14.4 and 14.5.
"Paying Agent" shall have the meaning specified in Section 2.3.
"Payment Blockage Period" shall have the meaning specified in Section
12.2(b).
"Payment Default" shall have the meaning specified in Section 12.2(a).
"Payment Notice" shall have the meaning specified in Section 12.2(b).
"Person" or "person" means any corporation, individual, limited liability
company, joint stock company, joint venture, partnership, unincorporated
association, governmental regulatory entity, country, state or political
subdivision thereof, trust, municipality or other entity.
"Principal" of any Indebtedness means the principal of such Indebtedness
plus, without duplication, any applicable premium, if any, on such
Indebtedness.
"Property" means any right or interest in or to property or assets of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Purchase Agreement" means that certain Purchase Agreement, dated February
20, 1998, by and among the Company and the Initial Purchasers, as such
agreement may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Purchased Shares" shall have the meaning specified in Section 13.5(f).
"Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"Qualified Institutional Buyer" shall have the meaning specified in Section
2.6(a)(ii)(B).
"Record Date" means a Record Date specified in the Securities whether or
not such Record Date is a Business Day.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to Article III of this
Indenture and Paragraph 5 in the form of Security attached hereto as
Exhibit A.
"Redemption Price," when used with respect to any Security to be redeemed,
means the redemption price for such redemption pursuant to Paragraph 5 in
the form of Security attached hereto as Exhibit A, which shall include,
without duplication, in each case, accrued and unpaid interest and
Liquidated Damages, if any, to and including the Redemption Date.
"Registrar" shall have the meaning specified in Section 2.3.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated the date hereof, by and among the Initial Purchasers and the Company,
in the form as filed with the Trustee, as such agreement may be amended,
modified or supplemented from time to time in accordance with the terms
thereof.
"Repurchase Date" shall have the meaning specified in Section 11.1(a).
"Repurchase Offer" shall have the meaning specified in Section 11.1(b).
"Repurchase Offer Period" shall have the meaning specified in Section
11.1(b).
"Repurchase Price" shall have the meaning specified in Section 11.1(a).
"Repurchase Put Date" shall have the meaning specified in Section 11.1(b).
"Restricted Security" means a Security, unless or until it has been (i)
disposed of in a transaction effectively registered under the Securities
Act or (ii) distributed to the public pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities" means, collectively, the 4 7/8% Convertible Subordinated
Notes due 2008, as supplemented from time to time in accordance with the
terms hereof, issued and outstanding under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to the
Securities in global form, or any successor entity thereto.
"Senior Indebtedness" means all obligations of the Company to pay the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding,
whether or not a claim for post-petition interest is allowable as a claim
in any such proceeding) and rent payable on or in connection with, and all
fees, costs, expenses and other amounts accrued or due on or in connection
with, any Indebtedness of the Company, whether outstanding on the date of
the Indenture or thereafter created, incurred, assumed, guaranteed or in
effect guaranteed by the Company, unless the instrument creating or
evidencing such Indebtedness provides that such Indebtedness is not senior
or superior in right of payment to the Securities or is pari passu with, or
subordinated to, the Securities; provided, however, that in no event shall
Senior Indebtedness include (a) Indebtedness representing or with respect
to any account payable or other accrued current liability or obligation
incurred in the ordinary course of business in connection with the
obtaining of materials or services or (b) any liability for taxes owed or
owing by the Company or any Subsidiary of the Company but shall include
obligations of the Company under its Supplemental Retirement Income Plan.
"Shelf Registration Statement" shall have the meaning specified in the
Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" of the Company within the meaning of Rule 1.02(w) of Regulation
S-X promulgated by the SEC as in effect as of the date of the Indenture.
"Special Record Date" for payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Security, means March 1,
2008.
"Subsidiary" with respect to any Person, means (i) a corporation a majority
of whose Capital Stock with voting power normally entitled to vote in the
election of directors is at the time, directly or indirectly, owned by such
Person, by such Person and one or more Subsidiaries of such Person or by
one or more Subsidiaries of such Person, (ii) a partnership in which such
Person or a Subsidiary of such Person is, at the time, a general partner
and owns alone or together with one or more Subsidiaries of such Person a
majority of the partnership interests, or (iii) any other Person (other
than a corporation) in which such Person, one or more Subsidiaries of such
Person, or such Person and one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof has at least
majority ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code 77aaa-77bbbb)
as in effect on the date of the execution of this Indenture.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not traded on the New York Stock
Exchange (or, if the Common Stock is not listed thereon, on the principal
national securities exchange on which the Common Stock is listed or
admitted to trading).
"Transfer Restricted Securities" means Securities that bear or are required
to bear the legend set forth in Section 2.6.
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer within the corporate trust division (or
any successor group) of the Trustee or any other officer of the Trustee
customarily performing functions similar to those performed by the Persons
who at that time shall be such officers, and also means, with respect to a
particular corporate trust matter, any other officer of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity
with the particular subject.
"U.S. Government Obligations" means direct noncallable obligations of, or
noncallable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"Voting Stock" means the combined voting power of the then outstanding
securities entitled to vote generally in elections of directors, managers
or trustees, as applicable, of the Company or any successor entity.
SECTION 1.2. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"Indenture securities" means the Securities.
"Indenture Securityholder" means a Holder or a Securityholder.
"Indenture to be qualified" means this Indenture.
"Indenture trustee" or "institutional trustee" means the Trustee.
"Obligor" on the indenture securities means the Company and any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(7) references to Sections or Articles means reference to such Section or
Article in this Indenture, unless stated otherwise.
ARTICLE II.
THE SECURITIES
SECTION 2.1. Form and Dating.
The Securities and the Trustee's certificate of authentication, in respect
thereof, shall be substantially in the form of Exhibit A hereto, which
Exhibit is part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage. The
Company shall approve the form of the Securities and any notation, legend
or endorsement on them. Any such notations, legends or endorsements not
contained in the form of Security attached as Exhibit A hereto shall be
delivered in writing to the Trustee. Each Security shall be dated the date
of its authentication.
The terms and provisions contained in the forms of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to
the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions
and to be bound thereby. If any term or provision of a Security limits,
qualifies, or conflicts with the terms of this Indenture, the terms of this
Indenture shall control.
SECTION 2.2. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer shall
attest to, the Security for the Company by manual or facsimile signature.
The Company's seal may be, but is not required to be, impressed, affixed,
imprinted or reproduced on the Securities and may be in facsimile form.
If an Officer whose signature is on a Security was an Officer at the time
of such execution but no longer holds that or any office at the time the
Trustee authenticates the Security, the Security shall be valid
nevertheless and the Company shall nevertheless be bound by the terms of
the Securities and this Indenture.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security but such
signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate the Securities for original issue in the
aggregate principal amount of up to $115,000,000 upon a written order of
the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify (i) the amount of Securities to be authenticated
and (ii) the date on which the Securities are to be authenticated. The
aggregate principal amount of Securities outstanding at any time may not
exceed $115,000,000 except as provided in Section 2.7; provided, however,
that Securities in excess of $100,000,000 shall not be issued other than
pursuant to the over-allotment option granted by the Company to the Initial
Purchasers as provided in the Purchase Agreement. Upon the written order
of the Company in the form of an Officers' Certificate, the Trustee shall
authenticate Securities in substitution of Securities originally issued to
reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. Unless otherwise provided in the appointment,
an authenticating agent may authenticate Securities whenever the Trustee
may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company, any Affiliate of the
Company, or any of their respective Subsidiaries, and has the same
protections under the Indenture.
Securities shall be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
SECTION 2.3. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of Manhattan,
the City of New York, where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent") and where
notices and demands to or upon the Company in respect of the Securities may
be served. The Company may act as Registrar or Paying Agent, except that,
for the purposes of Articles III, VIII and XI and as otherwise specified in
the Indenture, neither the Company nor any Affiliate of the Company shall
act as Paying Agent. The Registrar shall keep a register of the Securities
and of their transfer and exchange. The Company may have one or more co-
Registrars and one or more additional Paying Agents. The term "Paying
Agent" includes any additional Paying Agent. The Company hereby initially
appoints the Trustee as Registrar and Paying Agent, and the Trustee hereby
initially agrees so to act.
The Company shall enter into an appropriate written agency agreement with
any Agent not a party to this Indenture, which agreement shall implement
the provisions of this Indenture that relate to such Agent. The Company
shall promptly notify the Trustee in writing of the name and address of any
such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as Securities Custodian
with respect to the Global Securities.
SECTION 2.4. Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that each Paying Agent shall subject to Article XII of this
Indenture, hold in trust for the benefit of Holders or the Trustee all
assets held by the Paying Agent for the payment of principal of, premium,
if any, interest on or Liquidated Damages with respect to, the Securities
(whether such assets have been distributed to it by the Company or any
other obligor on the Securities), and shall notify the Trustee in writing
of any Default in making any such payment. If either of the Company or a
Subsidiary of the Company acts as Paying Agent, it shall segregate such
assets and hold them as a separate trust fund for the benefit of the
Holders or the Trustee. The Company at any time may require a Paying Agent
to distribute all assets held by it to the Trustee and account for any
assets disbursed and the Trustee may at any time during the continuance of
any Payment Default, upon written request to a Paying Agent, require such
Paying Agent to distribute all assets held by it to the Trustee and to
account for any assets distributed. Upon distribution to the Trustee of
all assets that shall have been delivered by the Company to the Paying
Agent, the Paying Agent (if other than the Company or an Affiliate of the
Company) shall have no further liability for such assets.
SECTION 2.5. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of Holders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee on or before the third Business Day preceding each Interest
Payment Date and at such other times as the Trustee may request in writing
a list in such form and as of such date as the Trustee reasonably may
require of the names and addresses of Holders.
SECTION 2.6. Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When Definitive
Securities are presented to the Registrar or a co-Registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized
denominations;
the Registrar or co-Registrar shall register the transfer or make the
exchange as requested if its reasonable requirements for such transaction
are met; provided, however, that the Definitive Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the
Registrar or co-Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing; and
(ii) in the case of a Definitive Security that is a Transfer Restricted
Security, shall be accompanied by the following additional
information and documents, as applicable
(A) if such Definitive Security is being delivered to the
Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect (in substantially the form set
forth on the reverse of the Security); or
(B) if such Definitive Security is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A
under the Securities Act, a certification to that effect
(in substantially the form set forth on the reverse of
the Security); or
(C) if such Definitive Security is being transferred to an
institutional investor that is an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act, a certification to that effect
(in substantially the form set forth on the Security)
accompanied by a certificate in the form of Exhibit B to
the Indenture to the Trustee and if either the Trustee or
the Company so requests, an Opinion of Counsel
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act;
(D) if such Definitive Security is being transferred in
accordance with Regulation S under the Securities Act, a
certification to that effect (in substantially the form
set forth on the Security) and if either the Trustee or
the Company so requests, an Opinion of Counsel
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(E) if such Definitive Security is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification to
that effect (in substantially the form set forth on the
Security) and if either the Trustee or the Company so
requests, an Opinion of Counsel satisfactory to the
Company to the effect that such transfer is in compliance
with the Securities Act.
(b) Restrictions on Transfer of a Definitive Security for a Beneficial
Interest in a Global Security. A Definitive Security may not be exchanged
for a beneficial interest in a Global Security except upon satisfaction of
the requirements set forth below. Upon receipt by the Trustee of a
Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer in form reasonably satisfactory to the Company and
the Registrar or Co-Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing, together with:
(i) if such Definitive Security is a Transfer Restricted Security,
certification, substantially in the form set forth on the
Security, that such Definitive Security is being transferred (x)
to a Qualified Institutional Buyer in accordance with Rule 144A
under the Securities Act or (y) in accordance with Regulation S
under the Securities Act; and
(ii) whether or not such Definitive Security is a Transfer Restricted
Security, written instructions directing the Trustee to make, or
to direct the Securities Custodian to make, an endorsement on the
Global Security to reflect an increase in the aggregate principal
amount of the Securities represented by the applicable Global
Security;
then the Trustee shall cancel such Definitive Security and cause, or direct
the Securities Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Securities Custodian, the aggregate principal amount of Securities
represented by the appropriate Global Security to be increased accordingly.
If no Global Securities are then outstanding, the Company shall issue and
the Trustee shall authenticate an appropriate new Global Security in the
appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture
(including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefore.
(d) Transfer of a Beneficial Interest in a Global Security for a
Definitive Security.
(i) Upon receipt by the Trustee of written instructions or such other
form of instructions as is customary for the Depositary from the
Depositary or its nominee on behalf of any Person having a
beneficial interest in a Global Security and upon receipt by the
Trustee of a written order or such other form of instructions as
is customary for the Depositary or the Person designated by the
Depositary as having such a beneficial interest in a Transfer
Restricted Security only, the following additional information and
documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial
owner, a certification from such person to that effect (in
substantially the form set forth on the reverse of the
Security); or
(B) if such beneficial interest is being transferred to a
Qualified Institutional Buyer in accordance with Rule 144A
under the Securities Act, a certification to that effect
from the transferor (in substantially the form set forth on
the reverse of the Security); or
(C) if such beneficial interest is being transferred to an
institutional investor that is an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under
the Securities Act, a certification to that effect (in
substantially the form set forth on the reverse of the
Security) accompanied by a certificate in the form of
Exhibit B to the Indenture to the Trustee and if either the
Trustee or the Company so requests, an Opinion of Counsel
satisfactory to the Company to the effect that such transfer
is in compliance with the Securities Act;
(D) if such beneficial interest is being transferred in
accordance with Regulation S under the Securities Act, a
certification to that effect (in substantially the form set
forth on the reverse of the Security) and if either the
Trustee or the Company so requests, an Opinion of Counsel
satisfactory to the Company to the effect that such transfer
is in compliance with the Securities Act; or
(E) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of
the Securities Act, a certification to that effect from the
transferee or transferor (in substantially the form set
forth on the reverse of the Security) and if either the
Trustee or the Company so requests, an Opinion of Counsel
satisfactory to the Company to the effect that such transfer
is in compliance with the Securities Act;
then the Trustee or the Securities Custodian, at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian,
the aggregate principal amount of the applicable Global Security to be
reduced and, following such reduction, the Company will execute and, upon
receipt of an authentication order in the form of an Officers' Certificate,
the Trustee will authenticate and deliver to the transferee a Definitive
Security.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.6(d)
shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct
the Trustee. The Trustee shall make such Definitive Securities
available for delivery to the persons in whose names such
Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global
Security may not be transferred as a whole except (i) by the Depositary to
a nominee of the Depositary, (ii) by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or (iii) by the Depositary
or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(f) Authentication of Definitive Securities in Absence of Depositary. If
at any time:
(i) the Depositary for the Securities notifies the Company and the
Company notifies the Trustee in writing that the Depositary is no
longer willing or able to continue as Depositary for the Global
Securities and a successor Depositary for the Global Securities is
not appointed by the Company within 90 days after delivery of such
notice; or
(ii) the Company, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive
Securities under this Indenture;
then the Company will execute, and the Trustee, upon receipt of an
Officers' Certificate requesting the authentication and delivery of
Definitive Securities, will authenticate and make available for delivery
Definitive Securities, in an aggregate principal amount equal to the
principal amount of the Global Securities, in exchange for such Global
Securities.
(g) Legends.
(i) Except as permitted by the following paragraph (ii), each Security
certificate evidencing the Global Securities and the Definitive
Securities (and all Securities issued in exchange therefor or
substitution thereof) shall bear a legend in substantially the
following form:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) (A "QIB"), (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT (AN "IAI"), OR (C) IT IS ACQUIRING THIS SECURITY
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO
A PERSON WHO THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (C) TO AN IAI THAT,
PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS
SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF THE
COMPANY SO REQUESTS, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 UNDER THE
SECURITIES ACT, (E) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE
902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
SECURITY IN VIOLATION OF THE FOREGOING."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act or
an effective registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security or that is represented by a Global
Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive
Security that does not bear the legend set forth above and
rescind any restriction on the transfer of such Transfer
Restricted Security (1) in the case of a sale or transfer
pursuant to Rule 144 under the Securities Act, after delivery
of a customary Opinion of Counsel satisfactory to the Company
to the effect that such transfer is in compliance with the
Securities Act or (2) in the case of a sale or transfer
pursuant to an effective registration statement under the
Securities Act; and
(B) any such Transfer Restricted Security represented by a Global
Security shall not be subject to the provisions set forth in
(i) above (such sales or transfers being subject only to the
provisions of Section 2.6(e) hereof).
(h) Cancellation and/or Adjustment of Global Security. At such time as
all beneficial interests in a Global Security have either been exchanged
for Definitive Securities, redeemed, repurchased or canceled, such Global
Security shall be returned to or retained and canceled by the Trustee. At
any time prior to such cancellation, if any beneficial interest in a Global
Security is exchanged for Definitive Securities, redeemed, repurchased or
canceled, the principal amount of Securities represented by such Global
Security shall be reduced and an endorsement shall be made on such Global
Security, by the Trustee or the Securities Custodian, at the written
direction of the Trustee, to reflect such reduction.
(i) Obligations with respect to Transfers and Exchanges of Definitive
Securities.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's or co-
Registrar's written request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than
any such transfer taxes, assessments, or similar governmental
charge payable upon exchanges or transfers pursuant to Section 2.2
(fourth paragraph), 2.10, 3.7, 9.5, or 11.1 (final paragraph)).
(iii) The Registrar or co-Registrar shall not be required to register
the transfer of or exchange of (a) any Definitive Security
selected for redemption in whole or in part pursuant to Article
III, except the unredeemed portion of any Definitive Security
being redeemed in part, or (b) any Security for a period beginning
15 days before the mailing of a notice of an offer to repurchase
pursuant to Article XI hereof or the mailing of a notice of
redemption of Securities pursuant to Article III hereof and ending
at the close of business on the day of such mailing.
SECTION 2.7. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder of a
Security claims and submits an affidavit or other evidence, satisfactory to
the Trustee, to the Trustee to the effect that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Security if the Trustee's requirements are
met. If required by the Trustee or the Company, such Holder must provide
an indemnity bond or other indemnity, sufficient in the judgment of both
the Company and the Trustee, to protect the Company, the Trustee or any
Agent from any loss which any of them may suffer if a Security is replaced.
The Company may charge such Holder for its reasonable, out-of-pocket
expenses in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security,
pay such Security, upon satisfaction of the conditions set forth in the
preceding paragraph.
Every new Security issued pursuant to this Section 2.7 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and such new Security shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all
other Securities duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies of any Holder with respect to
the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
SECTION 2.8. Outstanding Securities.
Securities outstanding at any time are all the Securities that have been
authenticated by the Trustee (including any Security represented by a
Global Security) except those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security
effected by the Trustee hereunder and those described in this Section 2.8
as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security, except as
provided in Section 2.9.
If a Security is replaced pursuant to Section 2.7 (other than a mutilated
Security surrendered for replacement), the replaced Security ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser. A mutilated Security
ceases to be outstanding upon surrender of such Security and replacement
thereof pursuant to Section 2.7.
If on a Redemption Date the Paying Agent (other than the Company or an
Affiliate of the Company) holds Cash or U.S. Government Obligations
sufficient to pay all of the principal and interest due on the Securities
payable on that date in accordance with Section 3.6 hereof and payment of
the Securities called for redemption is not otherwise prohibited pursuant
to Article XII hereof or otherwise, then on and after that date such
Securities cease to be outstanding and interest on them ceases to accrue.
SECTION 2.9. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver
or consent, Securities owned by the Company or an Affiliate of the Company
shall be disregarded, except that, for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, amendment,
supplement, waiver or consent, only Securities that the Trustee knows are
so owned shall be disregarded.
SECTION 2.10. Temporary Securities.
Until Definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities but
may have variations that the Company reasonably and in good faith considers
appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate Definitive
Securities in exchange for temporary Securities. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as permanent Securities authenticated and delivered
hereunder.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or
the Paying Agent (other than the Company or an Affiliate of the Company),
and no one else, shall cancel securities and may destroy such securities in
accordance with its usual records destruction procedures or, at the written
request of the Company, return cancelled Securities to the Company.
Subject to Section 2.7, the Company may not issue new Securities to replace
Securities that have been paid or delivered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section 2.11,
except as expressly permitted in the form of Securities and as permitted by
this Indenture.
SECTION 2.12. Defaulted Interest.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security (or one or more predecessor Securities) is
registered at the close of business on the Record Date for such interest.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date plus, to the extent
lawful, any interest payable on the defaulted interest (collectively,
herein called "Defaulted Interest") shall forthwith cease to be payable to
the registered holder on the relevant Record Date, 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 Securities (or their respective
predecessor Securities) are registered at the close of business on
a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of Cash 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 Cash when deposited to be
held in trust for the benefit of the persons entitled to such
Defaulted Interest as provided in this clause (1). Thereupon the
Trustee shall fix a special record date for the payment of such
Defaulted Interest which shall be not more than 15 Business Days
and not less than 10 Business Days prior to the date of the
proposed payment and not less than 10 Business Days after the
receipt by the Trustee of the notice of the proposed payment
("Special Record Date"). The Trustee shall promptly notify the
Company in writing 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 at his address as it appears in
the Security register not less than 10 Business Days prior to such
Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having
been mailed as aforesaid, such Defaulted Interest shall be paid to
the persons in whose names the Securities (or their respective
predecessor Securities) are registered on such Special Record Date
and shall no longer be payable pursuant to the following clause
(2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and
upon such notice as may be required by such exchange, if, after
written notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.12, each Security
delivered under this Indenture upon transfer of or in exchange for or in
lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
ARTICLE III.
REDEMPTION
SECTION 3.1. Right of Redemption.
Redemption of Securities, as permitted by any provision of this Indenture,
shall be made in accordance with Paragraph 5 of the Securities and this
Article III. The Company will not have the right to redeem any Securities
prior to March 1, 2001. On or after March 1, 2001 the Company will have
the right to redeem all or any part of the Securities at the Redemption
Prices specified in Paragraph 5 therein under the caption "Redemption," in
each case including accrued and unpaid interest and Liquidated Damages, if
any, to, but excluding, the Redemption Date.
SECTION 3.2. Notices to Trustee.
If the Company elects to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the Redemption Date,
the principal amount of Securities to be redeemed, the Redemption Price and
whether it wants the Trustee to give notice of redemption to the Holders.
If the Company elects to reduce the principal amount of Securities to be
redeemed pursuant to Paragraph 5 of the Securities by crediting against any
such redemption Securities it has not previously delivered to the Trustee
for cancellation, it shall so notify the Trustee in writing of the amount
of the reduction and deliver such Securities with such notice.
The Company shall give each notice to the Trustee provided for in this
Section 3.2 at least 45 days but not more than 60 days before the
Redemption Date (unless a shorter notice period shall be satisfactory to
the Trustee). Any such notice may be canceled at any time prior to notice
of such redemption being mailed to any Holder and shall thereby be void and
of no effect.
SECTION 3.3. Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to Paragraph
5 of the Securities, the Trustee shall select the Securities to be redeemed
on a pro rata basis, by lot or by such other method as the Trustee shall
determine to be fair and appropriate and in such manner as complies with
any applicable depositary, legal and stock exchange or automated quotation
system requirements.
The Trustee shall make the selection from the Securities outstanding and
not previously called for redemption and shall promptly notify the Company
in writing of the Securities selected for redemption and, in the case of
any Security selected for partial redemption, the principal amount thereof
to be redeemed. Securities in denominations of $1,000 may be redeemed only
in whole. The Trustee may select for redemption portions (equal to $1,000
or any integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities
called for redemption.
SECTION 3.4. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail a notice of redemption by first-class mail, postage
prepaid, to the Trustee and each Holder whose Securities are to be redeemed
at such Holder's address as it appears on the security register maintained
by the Registrar. At the Company's request contained in the notice of
redemption required in Section 3.2, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. Each notice
of redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date, and that the Securities called for redemption
may not be converted after the Business Day immediately prior to
the Redemption Date;
(2) the Redemption Price, including the amount of accrued and unpaid
interest and Liquidated Damages, if any, to be paid upon such
redemption;
(3) the name, address and telephone number of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent at the address specified in such notice to collect
the Redemption Price;
(5) that, unless (a) the Company defaults in its obligation to deposit
Cash with the Paying Agent in accordance with Section 3.6 hereof
or (b) such redemption payment is prohibited pursuant to Article
XII hereof or otherwise, interest on, and Liquidated Damages with
respect to, Securities called for redemption ceases to accrue on
and after the Redemption Date and the only remaining right of the
Holders of such Securities is to receive payment of the Redemption
Price, including accrued and unpaid interest and Liquidated
Damages, if any, to (but excluding) the Redemption Date, upon
surrender to the Paying Agent of the Securities called for
redemption and to be redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount, equal to $1,000 or any integral multiple
thereof, of such Security to be redeemed and that, on or after the
Redemption Date, upon surrender of such Security, a new Security
or Securities in aggregate principal amount equal to the
unredeemed portion thereof will be issued;
(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof)
to be redeemed, as well as the aggregate principal amount of such
Securities to be redeemed and the aggregate principal amount of
Securities to be outstanding after such partial redemption;
(8) the CUSIP number of the Securities to be redeemed; and
(9) that the notice is being sent pursuant to this Section 3.4 and
pursuant to the redemption provisions of Paragraph 5 of the
Securities.
SECTION 3.5. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.4,
Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price, including accrued and unpaid interest and
Liquidated Damages, if any, to (but excluding) the Redemption Date. Upon
surrender to the Trustee or Paying Agent, such Securities called for
redemption shall be paid at the Redemption Price, including accrued and
unpaid interest and Liquidated Damages, if any, to (but excluding) the
Redemption Date; provided that if the Redemption Date is after a regular
Record Date and on or prior to the corresponding Interest Payment Date, the
accrued interest and Liquidated Damages, if any, shall be payable to the
Holder of the redeemed Securities registered on the relevant Record Date;
and provided, further, that if a Redemption Date is a Legal Holiday,
payment shall be made on the next succeeding Business Day and no interest
or Liquidated Damages shall accrue for the period from such Redemption Date
to such succeeding Business Day.
SECTION 3.6. Deposit of Redemption Price.
Prior to 10:00 a.m. New York City time on the Redemption Date, the Company
shall deposit with the Paying Agent (other than the Company or an Affiliate
of the Company) Cash sufficient to pay the Redemption Price of, including
accrued and unpaid interest on, and Liquidated Damages, if any, with
respect to, all Securities to be redeemed on such Redemption Date (other
than Securities or portions thereof called for redemption on that date that
have been delivered by the Company to the Trustee for cancellation). The
Paying Agent shall promptly return to the Company any Cash so deposited
which is not required for that purpose upon the written request of the
Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not prohibited under Article XII or otherwise, interest and
Liquidated Damages, if any, on the Securities to be redeemed will cease to
accrue on and after the applicable Redemption Date, whether or not such
Securities are presented for payment. Notwithstanding anything herein to
the contrary, if any Security surrendered for redemption in the manner
provided in the Securities shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the
preceding paragraph, Liquidated Damages shall continue to accrue and be
paid from the Redemption Date if so required pursuant to Section 3 of the
Registration Rights Agreement and interest shall continue to accrue and be
paid from the Redemption Date until such payment is made on the unpaid
principal, and, to the extent lawful, on any interest not paid on such
unpaid principal, in each case at the rate and in the manner provided in
Section 4.1 hereof and the Security.
SECTION 3.7. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the Company
shall execute and the Trustee shall thereafter authenticate and make
available for delivery to the Holder, without service charge to the Holder,
a new Security or Securities equal in principal amount to the unredeemed
portion of the Security surrendered.
ARTICLE IV.
COVENANTS
SECTION 4.1. Payment of Securities.
The Company shall pay the principal of, interest on, and Liquidated Damages
with respect to, the Securities on the dates and in the manner provided in
the Securities and the Registration Rights Agreement, as applicable. An
installment of principal of, interest on, or Liquidated Damages with
respect to, the Securities shall be considered paid on the date it is due
if the Trustee or Paying Agent (other than the Company or an Affiliate of
the Company) holds for the benefit of the Holders, on or before 10:00 a.m.
New York City time on that date, Cash deposited and designated for and
sufficient to pay the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.
SECTION 4.2. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of
transfer or exchange and for conversion and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 14.2.
The Company may also from time to time designate one or more other offices
or agencies where the Securities 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 rescission shall in any
manner relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, the City of New York, for such
purposes. The Company shall give prior 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. The Company hereby initially designates State
Street Bank and Trust Company N.A., 61 Broadway, New York, New York, as
such office.
SECTION 4.3. Corporate Existence.
Subject to Article V, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate
existence and the corporate or other existence of each of its Subsidiaries
in accordance with the respective organizational documents of each of them
and the rights (charter and statutory) and corporate franchises of the
Company and each of its Subsidiaries; provided, however, that the Company
shall not be required to preserve, with respect to itself, any right or
franchise, and with respect to any of its Subsidiaries, any such existence,
right or franchise, if the Company shall, in good faith, reasonably
determine that the preservation thereof is no longer desirable in the
conduct of the business of such entity.
SECTION 4.4. Payment of Taxes and Other Claims.
Except with respect to immaterial items, the Company shall, and shall cause
each of its Subsidiaries to, pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the
Company or any of its Subsidiaries or any of their respective properties
and assets and (ii) all lawful claims, whether for labor, materials,
supplies, services or anything else, which have become due and payable and
which by law have or may become a Lien upon the property and assets of the
Company or any of its Subsidiaries; provided, however, that neither the
Company nor any Subsidiary shall be required to pay or discharge or cause
to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which disputed amounts adequate reserves
have been established in accordance with GAAP.
SECTION 4.5. Maintenance of Properties and Insurance.
The Company shall cause all material properties used or useful to the
conduct of its business and the business of each of its Subsidiaries to be
maintained and kept in good condition, repair and working order (reasonable
wear and tear excepted) and supplied with all necessary equipment and shall
cause to be made all necessary repairs, renewals, replacements, betterments
and improvements thereof, all as in its reasonable judgment may be
necessary, so that the business carried on in connection therewith may be
properly conducted at all times; provided, however, that nothing in this
Section 4.5 shall prevent the Company or any Subsidiary from discontinuing
any operation or maintenance of any of such properties, or disposing of any
of them, if such discontinuance or disposal is in the reasonable, good
faith, judgment of the Company, desirable in the conduct of the business of
such entity.
The Company shall provide, or cause to be provided, for itself and each of
its Subsidiaries, insurance (including appropriate self-insurance) against
loss or damage of the kinds that, in the reasonable, good faith opinion of
the Company is adequate and appropriate for the conduct of the business of
the Company and such Subsidiaries in a prudent manner, with (except for
self-insurance) reputable insurers or with the government of the United
States of America or an agency or instrumentality thereof, in such amounts,
with such deductibles, and by such methods as shall be customary, in the
reasonable, good faith opinion of the Company and adequate and appropriate
for the conduct of the business of the Company and such Subsidiaries in a
prudent manner for entities similarly situated in the industry, unless
failure to provide such insurance (together with all other such failures)
would not have a material adverse effect on the business, assets, financial
condition or results of operations of the Company and its subsidiaries
taken as a whole.
SECTION 4.6. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee within 120 days after
the end of its fiscal year an Officers' Certificate complying with Section
314(a)(4) of the TIA and stating that a review of its activities and the
activities of its Subsidiaries during the preceding fiscal year has been
made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled
its obligations under this Indenture and further stating, as to each such
Officer signing such certificate, whether or not the signer knows of any
failure by the Company or any Subsidiary of the Company to comply with any
conditions or covenants in this Indenture and, if such signor does know of
such a failure to comply, the certificate shall describe such failure with
particularity. The Officers' Certificate shall also notify the Trustee
should the relevant fiscal year end on any date other than the current
fiscal year end date.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon becoming aware of any
Default, Event of Default or fact which would prohibit the making of any
payment to or by the Trustee in respect of the Securities, an Officers'
Certificate specifying such Default, Event of Default or fact and what
action the Company is taking or proposes to take with respect thereto. The
Trustee shall not be deemed to have knowledge of any Default, any Event of
Default or any such fact unless one of its Trust Officers receives written
notice thereof from the Company or any of the Holders.
SECTION 4.7. Reports.
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and to each Holder and to any Initial Purchaser in such reasonable
quantities as specified by such Initial Purchaser, within 15 days after it
is or would have been required to file such with the SEC, annual and
quarterly consolidated financial statements substantially equivalent to
financial statements that would have been included in reports filed with
the SEC if the Company were subject to the requirements of Section 13 or
15(d) of the Exchange Act, including, with respect to annual information
only, a report thereon by the Company's certified independent public
accountants as such would be required in such reports to the SEC and, in
each case, together with a management's discussion and analysis of
financial condition and results of operations which would be so required.
The Trustee shall not be deemed to have notice of any breach of any of the
covenants of the Company set forth herein from any information contained in
any of the statements filed with it pursuant to this Section 4.7.
SECTION 4.8. Limitation on Status as Investment Company.
Neither the Company nor any of its Subsidiaries shall become an "investment
company" (as that term is defined in the Investment Company Act of 1940, as
amended), or otherwise become subject to regulation under the Investment
Company Act.
SECTION 4.9. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury
law or other law which would prohibit or forgive the Company from paying
all or any portion of the principal of, premium of, interest on, or
Liquidated Damages with respect to, the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) the Company 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 4.10. Rule 144A Information Requirement.
If at any time there are Transfer Restricted Securities outstanding and the
Company shall cease to have a class of equity securities registered under
Section 12(b) of the Exchange Act or shall cease to be subject to Section
15(d) of the Exchange Act, the Company shall furnish, within a reasonable
period of time, to the Holders or beneficial holders of the Securities or
the underlying Common Stock and prospective purchasers of Securities or the
underlying Common Stock designated by the Holders of Transfer Restricted
Securities, upon their written request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act until such
time as the Shelf Registration Statement has become effective under the
Securities Act. The Company shall also furnish such information during the
pendency of any suspension of effectiveness of the Shelf Registration
Statement.
SECTION 4.11. Registration Rights Agreement.
The Company shall file with the Trustee a true copy of any amendment of or
supplement to the Registration Rights Agreement.
ARTICLE V.
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation.
(a) The Company shall not, directly or indirectly, consolidate with
or merge with or into another Person or sell, lease, convey or transfer all
or substantially all of its assets (computed on a consolidated basis),
whether in a single transaction or a series of related transactions, to
another Person or group of affiliated Persons (other than to its wholly
owned Subsidiaries), or agree to do any of the foregoing, unless (i) either
(a) in the case of a merger or consolidation, the Company is or would be
the surviving entity or (b) the resulting, surviving or transferee entity
is or would be a corporation organized under the laws of the United States,
any state thereof or the District of Columbia and has or will expressly
assume by supplemental indenture all of the obligations of the Company in
connection with the Securities and the Indenture; (ii) no Default or Event
of Default shall exist or shall occur immediately before or after giving
effect to such transaction; and (iii) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or transfer and, if a supplemental
indenture is required, such supplemental indenture comply with the
Indenture and that all conditions precedent relating to such transactions
have been satisfied.
(b) For purposes of clause (a) of this Section 5.1 and Section 13.6,
the sale, lease, conveyance, assignment, transfer, or other disposition of
all or substantially all of the properties and assets of one or more
Subsidiaries of the Company, which properties and assets, if held by the
Company instead of such Subsidiaries, would constitute all or substantially
all of the properties and assets of the Company on a consolidated basis,
shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
SECTION 5.2. Successor Corporation Substituted.
Upon any permitted consolidation or merger or any permitted sale, lease,
conveyance or transfer of all or substantially all of the assets of the
Company in accordance with the foregoing, the successor corporation formed
by such consolidation or into which the Company is merged or to which such
sale, lease, conveyance or transfer is made, shall succeed to, and be
substituted for, and may exercise every right and power of, the Company
under the Indenture with the same effect as if such successor corporation
had been named therein as the Company, and when a successor corporation
duly assumes all of the obligations of the Company pursuant hereto and
pursuant to the Securities, the predecessor shall be released from such
obligations (except with respect to any obligations that arise from or as a
result of such transaction).
ARTICLE VI.
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall
be caused voluntarily or involuntarily or effected, without limitation, 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) failure to pay any installment of interest on, or Liquidated
Damages with respect to, the Securities as and when the same becomes due
and payable, or to perform any conversion of the Securities required under
this Indenture, and the continuance of such failure for a period of 30
days, whether or not such payment is prohibited by Article XII;
(2) failure to pay all or any part of the principal of, or premium,
if any on the Securities when and as the same become due and payable at
maturity, redemption, by acceleration or otherwise, including, without
limitation, failure to pay all or any part of the Repurchase Price on the
Repurchase Date in accordance with Article XI, whether or not such payment
is prohibited by Article XII;
(3) failure by the Company to observe or perform any covenant or
agreement contained in the Securities or this Indenture (other than a
default in the performance of any covenant or agreement which is
specifically dealt with elsewhere in this Section 6.1), and continuance of
such failure for a period of 60 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 Holders of at least 25% in aggregate principal
amount of the then outstanding Securities, a written notice specifying such
failure, requesting it to be remedied and stating that such notice is a
"Notice of Default" hereunder;
(4) failure by the Company or any Significant Subsidiary to pay
principal, premium or interest when due (after giving effect to any
applicable period of grace) at maturity of any Indebtedness (other than
non-recourse obligations), in an amount in excess of $15,000,000 and the
continuance of such failure for 30 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% in aggregate
principal amount of the then outstanding Securities, a written notice
specifying such default, requesting that it be remedied and stating that
such notice is a "Notice of Default" hereunder;
(5) default by the Company or any Significant Subsidiary with
respect to any Indebtedness (other than non-recourse obligations), which
default results in the acceleration of Indebtedness having a principal
amount in excess of $15,000,000 without such Indebtedness having been
discharged or such acceleration having been rescinded or annulled for 30
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% in aggregate principal amount of the then outstanding
Securities, a written notice specifying such default, requesting that it be
remedied and stating that such notice is a "Notice of Default" hereunder;
(6) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudging the Company or any of its
Significant Subsidiaries as bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization of the Company or any of its
Significant Subsidiaries under any bankruptcy or similar law, and such
decree or order shall have continued undischarged and unstayed for a period
of 60 days; or a decree or order of a court of competent jurisdiction over
the appointment of a receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency of the Company, any of its Significant
Subsidiaries, or of the property of any such Person, or for the winding up
or liquidation of the affairs of any such Person, shall have been entered,
and such decree, judgment, or order shall have remained in force
undischarged and unstayed for a period of 60 days;
(7) the Company or any of its Significant Subsidiaries shall
institute proceedings to be adjudicated a voluntary bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file
a petition or answer or consent seeking reorganization under any bankruptcy
or similar law or similar statute, or shall consent to the filing of any
such petition, or shall consent to the appointment of a Custodian,
receiver, liquidator, trustee, or assignee in bankruptcy or insolvency of
it or any of its assets or property, or shall make a general assignment for
the benefit of creditors, or shall admit in writing its inability to pay
its debts generally as they become due, or shall, within the meaning of any
Bankruptcy Law, become insolvent, fail generally to pay its debts as they
become due, or take any corporate action in furtherance of or to
facilitate, conditionally or otherwise, any of the foregoing; or
(8) final unsatisfied judgments not covered by insurance, or the
issuance of any warrant of attachment against any portion of the property
or assets of the Company or any of its Significant Subsidiaries,
aggregating in excess of $15,000,000 at any one time shall have been
rendered against the Company or any of its Significant Subsidiaries and not
have been stayed, bonded or discharged for a period (during which execution
shall not be effectively stayed) of 60 days (or, in the case of any such
final judgment which provides for payment over time, which shall so remain
unstayed, unbonded or undischarged beyond any applicable payment date
provided therein).
Notwithstanding the 60-day period and notice requirement contained in
Section 6.1(3) above, with respect to a default under Article XI the 60-day
period referred to in Section 6.1(3) shall be deemed to have begun as of
the date the Change of Control notice is required to be sent in the event
that the Company has not complied with the provisions of Section 11.1 and
the Trustee or Holders of at least 25% in principal amount of the
outstanding Securities thereafter give the Notice of Default referred to in
Section 6.1(3) to the Company and, if applicable, the Trustee; provided,
however, that if the breach or default is a result of a default in the
payment when due of the Repurchase Price on the Repurchase Date, such Event
of Default shall be deemed, for purposes of this Section 6.1, to arise no
later than on the final Repurchase Date.
SECTION 6.2. Acceleration of Maturity Date; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in Section
6.1(6) or (7) relating to the Company) occurs and is continuing, then in
every such case, unless the principal of all of the Securities shall have
already become due and payable, after five days' prior written notice to
Ann B. Kerns (facsimile number 212-270-4584) of The Chase Manhattan Bank
("Chase") as representative of the several lenders under the Company's
revolving credit facility in effect on the date hereof until such time as
Chase is not a lender with respect to such facility, either the Trustee or
the Holders of not less than 25% in aggregate principal amount of then
outstanding Securities, by a notice in writing to the Company (and to the
Trustee if given by Holders) (an "Acceleration Notice"), may declare all of
the principal of the Securities (or the Repurchase Price if the Event of
Default includes failure to pay the Repurchase Price, determined as set
forth below), including in each case premium, if any, accrued interest and
Liquidated Damages on or with respect thereto, to be due and payable
immediately. If an Event of Default specified in Section 6.1(6) or (7)
relating to the Company occurs, all principal, premium, if any, accrued
interest and Liquidated Damages on or with respect thereto will be
immediately due and payable on all outstanding Securities without any
declaration or other act on the part of Trustee or the Holders.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter provided in this Article VI, the Holders of
no less than a majority in aggregate principal amount of then outstanding
Securities, by written notice to the Company and the Trustee, may rescind,
on behalf of all Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the Trustee Cash
sufficient to pay
(A) all overdue interest on, and overdue Liquidated Damages with
respect to, all Securities,
(B) the principal of (and premium, if any, applicable to) any
Securities which would then be due otherwise than by such declaration of
acceleration, and interest thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest and Liquidated Damages at the rate borne by the
Securities,
(D) all sums paid or advanced by the Trustee hereunder and the
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and
(2) all Events of Default, other than the non-payment of the
principal of, premium, if any, interest on and Liquidated Damages with
respect to Securities that have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.12,
including, if applicable, any Event of Default relating to the covenants
contained in Section 11.1.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall
be effective against any Holder for any Event of Default or event which
with notice or lapse of time or both would be an Event of Default with
respect to any covenant or provision which cannot be modified or amended
without the consent of the Holder of each outstanding Security affected
thereby, unless all such affected Holders agree, in writing, to waive such
Event of Default or other event. No such waiver shall cure or waive any
subsequent Default or Event of Default or impair any right consequent
thereon.
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if an Event of Default in payment of principal,
premium, interest or Liquidated Damages specified in clause (1) or (2) of
Section 6.1 occurs and is continuing, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such Securities, the
whole amount then due and payable on such Securities for principal, premium
(if any), interest, Liquidated Damages and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue
principal (and premium, if any), Liquidated Damages and on any overdue
interest, at the rate borne by the Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs, fees and
expenses of collection, including compensation to, and expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums
so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company or any other obligor
upon the Securities and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or
any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem
most effective 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 6.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (which term as used in this Section shall include
any predecessor Trustee) (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal,
interest or Liquidated Damages) shall be entitled and empowered, by
intervention in such proceeding or otherwise to take any and all actions
under the TIA, including
(1) to file and prove a claim for the whole amount of principal (and
premium, if any), interest and Liquidated Damages owing and unpaid in
respect of the Securities and to file such other papers or documents and
take such other actions as the Trustee may deem necessary or advisable in
order to have the claims of the Trustee (including any claim under Section
7.7 for the compensation, fees, expenses, disbursements and advances of the
Trustee, its agent and counsel) and of the Holders allowed in such judicial
proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same in accordance
with Section 6.6;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the compensation,
expenses, fees, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 7.7. To the
extent that the payment of such compensation, expenses, fees, disbursements
and advances of Trustee, its agents and counsel and any other amounts due
to the Trustee under Section 7.7 hereof out of the estate in any such
judicial proceeding shall be denied for any reason, payment of the same
shall be secured by a perfected first priority security interest in and
lien on, and shall be paid out of, any and all distributions, dividends,
money securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise, and any such security interest
and lien in favor of any predecessor Trustee shall be senior to the
security interest and lien in favor of the current Trustee.
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 6.5. 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 in favor of the Holders, and
any recovery of judgment shall, after provision for the payment of
compensation to, and expenses, fees, 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 6.6. Priorities.
Any money collected by the Trustee pursuant to this Article VI 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,
premium (if any), interest or Liquidated Damages, upon presentation of the
Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the Trustee (including any predecessor Trustee) in payment of
all amounts due pursuant to Section 7.7;
SECOND: To the holders of Senior Indebtedness of the Company to the extent
provided in Article XII;
THIRD: To the Holders in payment of the amounts then due and unpaid for
principal of, premium (if any), interest on and Liquidated Damages with
respect to, the Securities in respect 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, premium (if any), interest and Liquidated Damages, respectively;
and
FOURTH: To whomsoever may be lawfully entitled thereto, the remainder, if
any.
SECTION 6.7. Limitation on Suits.
No Holder of any Security shall have any right to order or direct the
Trustee 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
(A) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(B) the Holders of not less than 25% in principal amount of then
outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be
incurred or reasonably probable to be incurred in compliance with such
request;
(D) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(E) 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 then outstanding Securities;
it being understood and intended that no one or more 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
Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.
SECTION 6.8. Unconditional Right of Holders to Receive Principal,
Premium, Interest and Liquidated Damages.
Notwithstanding any other provision of this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any), interest on and
Liquidated Damages with respect to, such Security when due (including, in
the case of redemption, the Redemption Price on the applicable Redemption
Date, and in the case of the Repurchase Price, on the applicable Repurchase
Date), to convert such Security in accordance with Article XIII, and to
institute suit for the enforcement of any such payment and right to convert
after such respective dates, and such rights shall not be impaired without
the consent of such Holder.
SECTION 6.9. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in Section 2.7, 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 6.10. Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any Security to
exercise any right or remedy arising upon any Event of Default shall impair
the exercise of any such right or remedy or constitute a waiver of any such
Event of Default. Every right and remedy given by this Article VI 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 6.11. Control by Holders.
The Holder or Holders of no less than a majority in aggregate principal
amount of then outstanding Securities shall have the right to direct the
time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred upon
the Trustee, provided, that
(1) such direction shall be made in writing to the Trustee and shall
not be in conflict with any rule of law or with this Indenture,
(2) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Holders not taking part in such
direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.12. Waiver of Past Default.
Holder or Holders of not less than a majority in aggregate principal amount
of then outstanding Securities may, on behalf of all Holders, prior to the
declaration of acceleration of the maturity of the Securities, waive any
past default hereunder and its consequences, except a default
(A) in the payment of the principal of, premium, if any, interest
on, or Liquidated Damages with respect to, any Security not yet cured as
specified in clauses (1) and (2) of Section 6.1, or
(B) in respect of a covenant or provision hereof which, under
Article IX, cannot be modified or amended without the consent of the Holder
of each outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair the exercise of any right arising
therefrom.
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, suffered or omitted to be taken 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
6.13 shall not apply to any suit instituted by the Company, to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in aggregate principal
amount of then outstanding Securities, or to any suit instituted by any
Holder for enforcement of the payment of principal of, premium (if any),
interest on or Liquidated Damages with respect to, any Security on or after
the respective Stated Maturity of such Security (including, in the case of
redemption, on or after the Redemption Date).
SECTION 6.14. 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, then and in every 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.
ARTICLE VII.
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed.
SECTION 7.1. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested
in it by this Indenture and use the same degree of care and skill in their
exercise as a prudent Person would exercise or use under the circumstances
in the conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no others, and no covenants or obligations
shall be implied in or read into this Indenture which are adverse to the
Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they substantially conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.1.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a written direction
received by it pursuant to Section 6.11.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or to take or omit to take
any action under this Indenture or at the request, order or direction of
the Holders 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 provided.
(e) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), (c), (d) and (f) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.2. Rights of Trustee.
Subject to Section 7.1:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the 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.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel of its selection and may require an Officers' Certificate or
an Opinion of Counsel, which shall conform to Sections 14.4 and 14.5. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such certificate or advice of counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
discretion, rights or powers conferred upon it by this Indenture.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, 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.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby.
(g) Unless otherwise specifically provided for in this Indenture,
any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(h) The Trustee shall have no duty to inquire as to the performance
of the Company's covenants. In addition, the Trustee shall not be deemed
to have knowledge of any Default or Event of Default except (i) any Event
of Default occurring pursuant to Sections 6.1(1), 6.1(2) or 5. 1, or (ii)
any Default or Event of Default of which the Trustee shall have received
written notification or obtained actual knowledge.
(i) No permissive right of the Trustee to act hereunder shall be
construed as a duty.
(j) Whenever in the administration of this Indenture the Trustee
deems it desirable that a matter be proved or established prior to taking,
suffering or omitting to take 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, an Opinion of
Counsel, or both.
(k) The Trustee shall not be deemed to have notice or knowledge
(including actual knowledge) of any matter unless a Trust Officer has
actual knowledge thereof or unless written notice thereof is received by
the Trustee at the office specified in Section 14.2 and such notice
references the Securities generally, the Company or this Indenture.
SECTION 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company, any of its
Subsidiaries, or their respective Affiliates with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture, the Registration Rights Agreement, the Offering Memorandum or
the Securities and it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any
statement in the Securities, other than the Trustee's certificate of
authentication, or the use or application of any funds received by a Paying
Agent other than the Trustee.
SECTION 7.5. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to each
Securityholder notice of the uncured Default or Event of Default within 90
days after the later to occur of (i) the occurrence of such Default or
Event of Default or (ii) the date the Trustee becomes aware of such Default
or Event of Default. Except in the case of a Default or an Event of
Default in payment of principal (or premium, if any) of, interest on or
Liquidated Damages with respect to, any Security (including the payment of
the Repurchase Price on the Repurchase Date and the payment of the
Redemption Price on the Redemption Date), the Trustee may withhold the
notice if and so long as a Trust Officer in good faith determines that
withholding the notice is in the interest of the Securityholders.
SECTION 7.6. Reports by Trustee to Holders.
Within 60 days after each April 15 beginning with the April 15 following
the date of this Indenture, the Trustee shall, if required by law, mail to
each Securityholder a brief report dated as of such April 15 that complies
with TIA 313(a). The Trustee also shall comply with TIA 313(b) and
313(c).
The Company shall promptly notify the Trustee in writing if the Securities
become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders shall
be mailed to the Company and, if required, filed with the SEC and each
stock exchange, if any, on which the Securities are listed.
SECTION 7.7. Compensation and Indemnity.
The Company agrees to pay to the Trustee from time to time such
compensation for its services as the parties shall agree from time to time
and, in the absence of such agreement, reasonable compensation for its
acceptance of this Indenture and services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee
of an express trust. The Company shall reimburse the Trustee upon request
for all reasonable disbursements, expenses, fees and advances incurred or
made by it. Such expenses shall include the reasonable compensation,
disbursements, fees and expenses of the Trustee's agents, accountants,
experts and counsel.
The Company agrees to indemnify the Trustee (in its capacity as Trustee)
and each of its officers, directors, attorneys-in-fact and agents for, and
hold them harmless against, any claim, demand, expense (including but not
limited to reasonable compensation, fees, disbursements and expenses of the
Trustee's agents and counsel), loss or liability incurred by it without
negligence, bad faith or willful misconduct on its part, arising out of,
related to, or in connection with the administration of this trust and its
rights or duties hereunder including the reasonable costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Company shall defend the
claim and the Trustee shall provide reasonable cooperation at the Company's
expense in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel;
provided, that the Company will not be required to pay such fees and
expenses if it assumes the Trustee's defense and there is no conflict of
interest between the Company and the Trustee in connection with such
defense. The Company need not pay for any settlement made without its
written consent. The Company need not reimburse any expense or indemnify
against any loss or liability to the extent incurred by the Trustee through
its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.7, the
Trustee and each predecessor Trustee shall have a perfected lien prior to
the Securities on all assets held or collected by the Trustee, in its
capacity as Trustee, except assets held in trust to pay principal and
premium, if any, of or interest or Liquidated Damages on particular
Securities. Any lien in favor of a predecessor Trustee shall be senior to
any lien in favor of the current Trustee.
When the Trustee incurs expenses or fees or renders services after an Event
of Default specified in Section 6.1(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law, provided that if such expenses and
compensation are not paid as expenses of administration the Trustee shall
be entitled to collect them pursuant to Section 6.6 and shall have the
liens for payment thereof set forth in this Section 7.7.
The Company's obligations under this Section 7.7 and any lien arising
hereunder shall survive indefinitely, including upon the resignation or
removal of the Trustee, the discharge of the Company's obligations pursuant
to Article VIII of this Indenture and any rejection or termination of this
Indenture under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing. The Holder
or Holders of a majority in principal amount of then outstanding Securities
may remove the Trustee by so notifying the Company and the Trustee in
writing. The Company, by Board of Directors resolution, may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian, or other public officer takes charge of
the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of this Section 7.8.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the
Holder or Holders of a majority in principal amount of then outstanding
Securities may, with the Company's consent, appoint a successor Trustee to
replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately upon delivery of
such notice and provided that all sums owing to the retiring Trustee
provided for in Section 7.7 have been paid, the retiring Trustee shall
transfer all property held by it as trustee to the successor Trustee,
subject to the lien provided in Section 7.7, the resignation or removal of
the retiring Trustee shall become effective, and the successor Trustee
shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company
or the Holder or Holders of at least 10% in principal amount of then
outstanding Securities may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any bona fide Holder may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Company's obligations under Section 7.7 shall continue indefinitely for
the benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation
is otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA 310(a)(1),
(2) and (5). The Trustee and its direct parent or, in the case of a
corporation included in a bank holding company system, the related bank
holding company, shall have a combined capital and surplus of at least
$100,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA 310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA 311(a), excluding any creditor
relationship listed in TIA 311(b). A Trustee who has resigned or been
removed shall be subject to TIA 311(a) to the extent indicated.
SECTION 7.12. Other Capacities.
All references in this Indenture to the Trustee shall be deemed to refer to
the Trustee in its capacity as Trustee and in its capacities as any Agent,
to the extent acting in such capacities, and every provision of this
Indenture relating to the conduct or affecting the liability or offering
protection, immunity or indemnity to the Trustee shall be deemed to apply
with the same force and effect to the Trustee acting in its capacity as any
Agent.
ARTICLE VIII.
SATISFACTION AND DISCHARGE
SECTION 8.1. Satisfaction and Discharge of Indenture.
The Company may terminate its obligations under this Indenture (subject to
the provisions of this Article VIII and Section 7.7) when it shall have
delivered to the Trustee for cancellation all Securities theretofore
authenticated (other than any Securities which shall have been destroyed,
lost or stolen and which shall have been replaced or paid as provided in
Article II hereof) and the following conditions shall be satisfied:
(1) The Company has paid all sums payable under the Indenture; and
(2) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating
that all conditions precedent have been complied with as contemplated by
this Section 8. 1.
SECTION 8.2. Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, for the payment of the principal of, premium, if any, interest
on or Liquidated Damages with respect to any Security and remaining
unclaimed for two years after such
principal, premium, if any, interest or Liquidated Damages has become due
and payable shall be paid to the Company on its written request; and the
Holder of such Security shall thereafter look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease.
ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company, when authorized by Board
Resolutions, 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 cure any ambiguity, defect, or inconsistency, or to make any
other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this
Indenture, provided, that such action pursuant to this clause (1) does not
adversely affect the interests of any Holder in any respect;
(2) to create additional covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon the
Company or to make any other change that does not adversely affect the
rights of any Holder, provided, that the Company has delivered to the
Trustee an Opinion of Counsel stating that such change pursuant to this
clause (2) does not adversely affect the rights of any Holder;
(3) to provide for collateral for or guarantors of the Securities;
(4) to make provision with respect to the conversion rights of any
Holder pursuant to Section 13.6;
(5) to evidence the succession of another Person to the Company and
the assumption by any such successor of the obligations of the Company
herein and in the Securities in accordance with Article V; or
(6) to comply with the TIA.
SECTION 9.2. Amendments, Supplemental Indentures and Waivers with Consent
of Holders.
Subject to the last sentence of this paragraph, with the consent of the
Holders of not less than a majority in aggregate principal amount of then
outstanding Securities, by written act of said Holders delivered to the
Company and the Trustee, the Company,
when authorized by Board Resolutions, and the Trustee may amend or
supplement this Indenture or the Securities or 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 the Securities or of modifying in any manner the rights of the
Holders under this Indenture or the Securities. Subject to the last
sentence of this paragraph, the Holder or Holders of not less than a
majority in aggregate principal amount of then outstanding Securities may,
in writing, waive compliance by the Company with any provision of this
Indenture or the Securities. Notwithstanding any of the above, however, no
such amendment, supplemental indenture or waiver shall, without the consent
of the Holder of each outstanding Security affected thereby:
(1) change the Stated Maturity of any Security or reduce the
principal amount thereof or the rate (or extend the time for payment) of
interest thereon or any premium payable upon the redemption thereof, or
change the place of payment where, or the coin or currency in which, any
Security or any premium or the interest thereon or Liquidated Damages with
respect thereto is payable, or impair the right to institute suit for the
conversion of any Security or the enforcement of any such payment on or
after the due date thereof (including, in the case of redemption, on or
after the Redemption Date), or reduce the Repurchase Price, or alter the
Repurchase Offer or redemption provisions in a manner adverse to the
Holders;
(2) reduce the percentage in principal amount of the outstanding
Securities, the consent of whose Holders is required for any such
amendment, supplemental indenture or waiver provided for in the Indenture;
(3) adversely affect the right of such Holder to convert Securities;
or
(4) modify any of the waiver provisions, except to increase any
required percentage or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the Holder of
each outstanding Security affected thereby.
It shall not be necessary for the consent of the Holders under this Section
9.2 to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail
such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver.
After an amendment, supplement or waiver under this Section 9.2 or Section
9.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this Article
IX, the Company may, but shall not be obligated to, offer to any Holder who
consents to such amendment, supplement or waiver, or (at the option of the
Company) to all Holders, consideration for consent to such amendment,
supplement or waiver.
SECTION 9.3. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt
as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may
revoke the consent as to his Security or portion of his Security by written
notice to the Company, the Trustee or the Person designated by the Company
as the Person to whom consents should be sent if such revocation is
received by the Company or such Person before the date on which the Trustee
receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is
fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date, and only
those Persons (or their duly designated proxies), shall be entitled to
revoke any consent previously given, whether or not such Persons continue
to be Holders after such record date. No such consent shall be valid or
effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder, unless it makes a change described in any of clauses
(1) through (4) of
Section 9.2, in which case, the amendment, supplement or waiver shall bind
only each Holder of a Security who has consented to it and every subsequent
Holder of a Security or portion of a Security that evidences the same debt
as the consenting Holder's Security; provided, that any such waiver shall
not impair or affect the right of any Holder to receive payment of
principal and premium of and interest on and Liquidated Damages with
respect to a Security, on or after the respective dates set for such
amounts to become due and payable as then expressed in such Security, or to
bring suit for the enforcement of any such payment on or after such
respective dates.
SECTION 9.5. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee
or require the Holder to put an appropriate notation on the Security. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Any failure to make the appropriate notation or to issue a new
Security shall not affect the validity of such amendment, supplement or
waiver.
SECTION 9.6. Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article IX; provided, that the Trustee may, but shall not
be obligated to, execute any such amendment, supplement or waiver which
affects the Trustee's own rights, duties or immunities under 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 any such amendment, supplement or waiver is authorized or permitted by
this Indenture.
ARTICLE X.
MEETINGS OF SECURITYHOLDERS
SECTION 10.1. Purposes for Which Meetings May Be Called.
A meeting of Securityholders may be called at any time and from time to
time pursuant to the provisions of this Article X for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to waive or to consent to the waiving of
any Default or Event of Default hereunder and its consequences, or to take
any other action authorized to be taken by Securityholders pursuant to any
of the provisions of Article VI;
(b) to remove the Trustee or appoint a successor Trustee pursuant to
the provisions of Article VII;
(c) to consent to an amendment, supplement or waiver pursuant to
provisions of Section 9.2; or
(d) to take any other action (i) authorized to be taken by or on
behalf of the Holder or Holders of any specified aggregate principal amount
of the Securities under any other provision of this Indenture, or
authorized or permitted by law or (ii) which the Trustee deems necessary or
appropriate in connection with the administration of this Indenture.
SECTION 10.2. Manner of Calling Meetings.
The Trustee may at any time call a meeting of Securityholders to take any
action specified in Section 10.1, to be held at such time and at such place
in the City of New York, New York or elsewhere as the Trustee shall
determine. Notice of every meeting of Securityholders, setting forth the
time and place of such meeting and in general terms the action proposed to
be taken at such meeting, shall be mailed at the Company's expense by the
Trustee, first-class postage prepaid, to the Company and to the Holders at
their last addresses as they shall appear on the registration books of the
Registrar, not less than 10 nor more than 60 days prior to the date fixed
for a meeting.
Any meeting of Securityholders shall be valid without notice if the Holders
of all Securities then outstanding are present in Person or by proxy, or if
notice is waived before or after the meeting by the Holders of all
Securities outstanding, and if the Company and the Trustee are either
present by duly authorized representatives or have, before or after the
meeting, waived notice.
SECTION 10.3. Calling of Meetings by the Company or Holders.
In case at any time the Company or the Holders of not less than 10% in
aggregate principal amount of the Securities then outstanding, shall have
requested the Trustee to call a meeting of Securityholders to take any
action specified in Section 10.1, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 20 days
after receipt of such written request, then the Company or the Holders of
Securities in the amount above specified may determine the time and place
in the City of New York, New York or elsewhere for such meeting and may
call such meeting for the purpose of taking such action, by mailing or
causing to be mailed notice thereof as provided in Section 10.2, or by
causing notice thereof to be published at least once in each of two
successive calendar weeks (on any Business Day during such week) in a
newspaper or newspapers printed in the English language, customarily
published at least five days a week of a general circulation in the City of
New York, State of New York, the first such publication to be not less than
10 nor more than 60 days prior to the date fixed for the meeting.
SECTION 10.4. Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Securityholders, a Person shall
(a) be a registered Holder of one or more Securities, or (b) be a Person
appointed by an instrument in writing as proxy for the registered Holder or
Holders of Securities. The only Persons who shall be entitled to be
present or to speak at any meeting of Securityholders shall be the Persons
entitled to vote at such meeting and their counsel and any representatives
of the Trustee and its counsel and any representatives of the Company, and
its counsel.
SECTION 10.5. Regulations May Be Made by Trustee; Conduct of the Meeting;
Voting Rights; Adjournment.Error! Bookmark not defined.
Notwithstanding any other provision of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any action by or
any meeting of Securityholders, in regard to proof of the holding of
Securities and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, and submission and
examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it
shall think appropriate. Such regulations may fix a record date and time
for determining the Holders of record of Securities entitled to vote at
such meeting, in which case those and only those Persons who are Holders of
Securities at the record date and time so fixed, or their proxies, shall be
entitled to vote at such meeting whether or not they shall be such Holders
at the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 10.3, in which case
the Company or the Securityholders calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman
and a permanent secretary of the meeting shall be elected by vote of the
Holders of a majority in principal amount of the Securities represented at
the meeting and entitled to vote.
At any meeting each Securityholder or proxy shall be entitled to one vote
for each $1,000 principal amount of Securities held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Securities challenged as not outstanding and ruled by the
chairman of the meeting to be not then outstanding. The chairman of the
meeting shall have no right to vote other than by virtue of Securities held
by him or instruments in writing as aforesaid duly designating him as the
proxy to vote on behalf of other Securityholders. Any meeting of
Securityholders duly called pursuant to the provisions of Section 10.2 or
Section 10.3 may be adjourned from time to time by vote of the Holder or
Holders of a majority in aggregate principal amount of the Securities
represented at the meeting and entitled to vote, and the meeting may be
held as so adjourned without further notice.
SECTION 10.6. Voting at the Meeting and Record to Be Kept.
The vote upon any resolution submitted to any meeting of Securityholders
shall be by written ballots on which shall be subscribed the signatures of
the Holders of Securities or of their representatives by proxy and the
principal amount of the Securities voted by the ballot. The permanent
chairman of the meeting shall appoint two inspectors of votes, who shall
count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified
written reports in duplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Securityholders shall be
prepared by the secretary of the meeting and there shall be attached to
such record the original reports of the inspectors of votes on any vote by
ballot taken thereat and affidavits by one or more Persons having knowledge
of the facts, setting forth a copy of the notice of the meeting and showing
that such notice was mailed as provided in Section 10.2 or published as
provided in Section 10.3. The record shall be signed and verified by the
affidavits of the permanent chairman and the secretary of the meeting and
one of the duplicates shall be delivered to the Company and the other to
the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 10.7. Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting.
Nothing contained in this Article X shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Securityholders
or any rights expressly or impliedly conferred hereunder to make such call,
any hindrance or delay in the exercise of any right or rights conferred
upon or reserved to the Trustee or to the Securityholders under any of the
provisions of this Indenture or of the Securities.
ARTICLE XI.
RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL
SECTION 11.1. Repurchase of Securities at Option of the Holder Upon a
Change of Control.
(a) Subject to Section 11.2, in the event that a Change of Control
occurs, the Company shall offer, subject to the terms and conditions of
this Indenture, to purchase all or any part of each Holder's Securities
(provided, that the principal amount of such Securities must be $1,000 or
an integral multiple thereof) on the date (the "Repurchase Date") that is
no later than 45 Business Days (except as hereinafter provided) after the
occurrence of such Change of Control, at a cash price (the "Repurchase
Price") equal to 100% of the principal amount thereof, together with
accrued and unpaid interest and Liquidated Damages, if any, to (but
excluding) the Repurchase Date.
(b) In the event that, pursuant to this Section 11.1, the Company
shall be required to commence an offer to purchase Securities (a
"Repurchase Offer"), the Company shall follow the procedures set forth in
this Section 11.1 as follows:
(1) the Repurchase Offer shall commence within 25 Business Days
following a Change of Control;
(2) the Repurchase Offer shall remain open for 20 Business Days
following its commencement, except to the extent that a longer period is
required by applicable law, but in any case not more than 60 Business Days
following the Change of Control (the "Repurchase Offer Period");
(3) upon the expiration of a Repurchase Offer, the Company shall
purchase all Securities tendered in response to the Repurchase Offer;
(4) if the Repurchase Date is on or after an interest payment record
date and on or before the related Interest Payment Date, any accrued
interest and Liquidated Damages will be paid to the Person in whose name a
Security is registered at the close of business on such record date, and no
additional interest or Liquidated Damages will be payable to
Securityholders who tender Securities pursuant to the Repurchase Offer;
(5) the Company shall provide the Trustee with written notice of the
Repurchase Offer at least 5 Business Days before the commencement of any
Repurchase Offer (or such shorter period that is satisfactory to the
Trustee); and
(6) on or before the commencement of any Repurchase Offer, the
Company or the Trustee (upon the request and at the expense of the Company)
shall send, by first-class mail, a notice to each of the Securityholders,
which (to the extent consistent with this Indenture) shall govern the terms
of the Repurchase Offer and shall state:
(i) that the Repurchase Offer is being made pursuant to such notice
and this Section 11.1 and that all Securities, or portions thereof,
tendered will be accepted for payment;
(ii) the Repurchase Price (including the amount of accrued and unpaid
interest and Liquidated Damages, if any), the Repurchase Date and the
Repurchase Put Date;
(iii) that any Security, or portion thereof, not tendered and accepted
for payment will continue to accrue interest and Liquidated Damages, if
any;
(iv) that, unless the Company defaults in depositing Cash with the
Paying Agent in accordance with the last paragraph of this clause (b) or
such payment is prevented pursuant to Article XII, any Security, or portion
thereof, accepted for payment pursuant to the Repurchase Offer shall cease
to accrue interest and Liquidated Damages after the Repurchase Date;
(v) that Holders electing to have a Security, or portion thereof,
purchased pursuant to a Repurchase Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Security completed, to the Paying Agent (which may not
for purposes of this Section 11.1, notwithstanding anything in this
Indenture to the contrary, be the Company or any Affiliate of the Company)
at the address specified in the notice prior to the close of business on
the earlier of (a) the third Business Day prior to the Repurchase Date and
(b) the third Business Day following the expiration of the Repurchase Offer
(such earlier date being the "Repurchase Put Date");
(vi) that Holders will be entitled to withdraw their election, in
whole or in part, if the Paying Agent (which may not for purposes of this
Section 11.1, notwithstanding anything in this Indenture to the contrary,
be the Company or any Affiliate of the Company) receives, up to the close
of business on the Repurchase Put Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Securities the Holder is withdrawing and a statement that
such Holder is withdrawing his election to have such principal amount of
Securities purchased; and
(vii) a brief description of the events resulting in such Change of
Control.
Any such Repurchase Offer shall comply with all applicable provisions of
federal and state laws, including those regulating tender offers, if
applicable, and any provisions of this Indenture which conflict with such
laws shall be deemed to be superseded by the provisions of such laws.
On or before the Repurchase Date, the Company shall (i) accept for payment
Securities or portions thereof properly tendered pursuant to the Repurchase
Offer on or before the Repurchase Put Date, (ii) deposit with the Paying
Agent Cash sufficient to pay the Repurchase Price (together with accrued
and unpaid interest and Liquidated Damages, if any) of all Securities or
portions thereof so tendered and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate listing the Securities or
portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to Holders of Securities so accepted payment in an amount
equal to the Repurchase Price (together with accrued and unpaid interest
and Liquidated Damages, if any), and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Security or
Securities equal in principal amount to any unpurchased portion of the
Securities surrendered. Any Securities not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Repurchase Offer on or as soon
as practicable after the Repurchase Date.
SECTION 11.2. Rescission of Change of Control Determination.
At any time prior to the close of business on the Business day immediately
preceding the Repurchase Date, the Holders of more than 66-2/3% in
aggregate principal amount of the then outstanding Securities, by written
act of said Holders delivered to the Company and the Trustee, may determine
that the event giving rise to the Change of Control shall not be treated as
a Change of Control for purposes of Section 11.1, in which event:
(1) the provisions of Section 11.1(a) shall not apply;
(2) if a Repurchase Offer has been made by the Company pursuant to
Section 11.1(b), such Repurchase Offer shall be deemed revoked; and
(3) if any Securities have been tendered in response to the revoked
Repurchase Offer, such tenders shall be deemed rescinded and the Securities
promptly returned to the Holders thereof.
Following a determination by the Holders pursuant to this Section 11.2, the
Company shall mail to all Holders a notice briefly describing such
determination. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in
any way impair or affect the validity of any such determination. An
effective determination under this Section 11.2 shall be binding on all
holders
ARTICLE XII.
SUBORDINATION
SECTION 12.1. Securities Subordinated to Senior Indebtedness.
The Company and each Holder, by its acceptance of Securities, agree that
(a) the payment of the principal of and interest on the Securities and (b)
any other payment in respect of the Securities, including on account of the
acquisition or redemption of the Securities by the Company and any premium
and Liquidated Damages (including, without limitation, pursuant to Article
XI (but specifically excluding payments to the Trustee for its own
benefit), is subordinated, to the extent and in the manner provided in this
Article XII, to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of this Indenture or thereafter
created, incurred, assumed or guaranteed, and that these subordination
provisions are for the benefit of the holders of Senior Indebtedness.
This Article XII shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the
holders of Senior Indebtedness, and such holders are made obligees
hereunder and any one or more of them may enforce such provisions.
SECTION 12.2. No Payment on Securities in Certain Circumstances.
(a) No payment may be made by the Company on account of the principal of,
premium, if any, interest on, or Liquidated Damages with respect to, the
Securities, or to acquire any of the Securities (including repurchases of
Securities at the option of the Holder pursuant to a Repurchase Offer) for
cash or property (other than Junior Securities), or on account of the
redemption provisions of the Securities, (i) upon the maturity of any
Senior Indebtedness by lapse of time, acceleration (unless waived) or
otherwise, unless and until all principal of, premium, if any, and interest
on such Senior Indebtedness are first paid in full (or the prompt payment
thereof is duly provided for in cash), or (ii) in the event of default in
the payment of any principal of, premium, if any, or interest on any Senior
Indebtedness when it becomes due and payable (meaning in the case of Senior
Indebtedness for which there is a grace period, in the event of such a
default that continues beyond the period of grace, is any, specified in the
instrument or lease evidencing such Senior Indebtedness), whether at
maturity or at a date fixed for prepayment or by declaration or otherwise
(collectively, a "Payment Default"), unless and until such Payment Default
has been cured or waived or otherwise has ceased to exist.
(b) Upon (i) the happening of an event of default (other than a Payment
Default) that permits, or would permit, with (w) the passage of time, (x)
the giving of notice, (y) the making of any payment of the Securities then
required to be made, or (z) any combination thereof (collectively, a "Non-
Payment Default"), the holders of Senior Indebtedness having a principal
amount then outstanding in excess of $10,000,000 (or with respect to which
Senior Indebtedness the holders are obligated to lend the Company in excess
of $10,000,000 principal amount) or their representative immediately to
accelerate its maturity and (ii) written notice of such Non-Payment Default
given to the Company and the Trustee by the holders of an aggregate of at
least $10,000,000 principal amount outstanding of such Senior Indebtedness
(or holders of commitments to lend an aggregate of at least $10,000,000
principal amount of Senior Indebtedness) or their representative (a
"Payment Notice"), then, unless and until such Non-Payment Default has been
cured or waived or otherwise has ceased to exist, no payment (by set-off or
otherwise) may be made by or on behalf of the Company on account of the
principal of, premium, if any, interest on, or Liquidated Damages with
respect to, the Securities, or to acquire or repurchase any of the
Securities for cash or property, or on account of the redemption provisions
of the Securities, in any such case other than payments made with Junior
Securities. Notwithstanding the foregoing, unless (i) the Senior
Indebtedness in respect of which such Non-Payment Default exists has been
declared due and payable in its entirety within 179 days after the Payment
Notice is delivered as set forth above (the "Payment Blockage Period"), and
(ii) such declaration has not been rescinded or waived, at the end of the
Payment Blockage Period, the Company shall be required to pay all sums not
paid to the Holders of the Securities during the Payment Blockage Period
due to the foregoing prohibitions and to resume all other payments as and
when due on the Securities, unless otherwise prohibited by the terms of
Section 12.2(a). Not more than one Payment Notice may be given in any
consecutive 365-day period, irrespective of the number of defaults with
respect to Senior Indebtedness during such period. In no event, however,
may the total number of days during which any Payment Blockage Period is or
Payment Blockage Periods are in effect exceed 179 days in the aggregate
during any consecutive 365-day period.
(c) In furtherance of the provisions of Section 12.1, in the event that,
notwithstanding the foregoing provisions of this Section 12.2, any payment
or distribution of assets of the Company (other than Junior Securities)
shall be received by the Trustee for the benefit of the Holders, or by the
Holders, or by any Paying Agent for the benefit of the Holders, at a time
when such payment or distribution is prohibited by the provisions of this
Section 12.2, then such payment or distribution (subject to the provisions
of Article VII and Sections 12.6, 12.7 and 12.12) shall be received and
held in trust by the Trustee or such Holder or Paying Agent for the benefit
of the holders of Senior Indebtedness of the Company, and shall be paid or
delivered by the Trustee or such Holders or such Paying Agent, as the case
may be, to the holders of Senior Indebtedness of the Company remaining
unpaid or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing
any of such Senior Indebtedness of the Company may have been issued,
ratably according to the aggregate amounts remaining unpaid on account of
the Senior Indebtedness of the Company held or represented by each, for
application to the payment of all Senior Indebtedness of the Company in
full after giving effect to any concurrent payment and distribution to the
holders of such Senior Indebtedness.
SECTION 12.3. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership
or a similar proceeding or upon assignment for the benefit of creditors or
any marshaling of assets or liabilities:
(a) the holders of all Senior Indebtedness of the Company shall first be
entitled to receive payments in full (or have the prompt payment thereof
duly provided for in cash) before the Holders are entitled to receive any
payment on account of the principal of, premium, if any, interest on, and
Liquidated Damages with respect to, the Securities (other than Junior
Securities);
(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than Junior
Securities) to which the Holders or the Trustee on behalf of the Holders
would be entitled (by setoff or otherwise), except for the provisions of
this Article XII, shall be paid by the liquidating trustee or agent or
other Person making such a payment or distribution directly to the holders
of Senior Indebtedness or their representative to the extent necessary to
make payment in full of all such Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness (but this Section 12.13(b) shall not
apply to payments or distributions to the Trustee for its own benefit); and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities (other than Junior Securities), shall be
received by the Trustee for the benefit of the Holders or the Holders or
any Paying Agent for the benefit of the Holders (or, if the Company or any
Affiliate of the Company is acting as its own Paying Agent, money for any
such payment or distribution shall be segregated or held in trust) on
account of the principal of, premium, if any, interest on or Liquidated
Damages with respect to, the Securities before all Senior Indebtedness is
paid in full, such payment or distribution (subject to the provisions of
Article VII and Sections 12.6, 12.7 and 12.12) shall be received and held
in trust by the Trustee or such Holder or Paying Agent for the benefit of
the holders of such Senior Indebtedness, or their respective
representative, ratably according to the respective amounts of such Senior
Indebtedness held or represented by each, to the extent necessary to make
payment as provided herein of all such Senior Indebtedness remaining unpaid
after giving effect to all concurrent payments and distributions to or for
the holders of such Senior Indebtedness, but only to the extent that as to
any holder of such Senior Indebtedness, as promptly as practical following
notice from the Trustee to the holders of such Senior Indebtedness that
such prohibited payment has been received by the Trustee, Holder(s) or
Paying Agent (or has been segregated as provided above), such holder (or a
representative therefor) notifies the Trustee of the amounts then due and
owing on such Senior Indebtedness, if any, held by such holder and only the
amounts specified in such notices to the Trustee shall be paid to the
holders of such Senior Indebtedness.
SECTION 12.4. Securityholders to Be Subrogated to Rights of Holders of
Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness of the Company as
provided herein, the Holders of Securities shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior
Indebtedness until all amounts owing on the Securities shall be paid in
full, and for the purpose of such subrogation no such payments or
distributions to the holders of such Senior Indebtedness by the Company, or
by or on behalf of the Holders by virtue of this Article XII, which
otherwise would have been made to the Holders shall, as between the Company
and the Holders, be deemed to be payment by the Company or on account of
such Senior Indebtedness, it being understood that the provisions of this
Article XII are and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of such
Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article XII shall have been
applied, pursuant to the provisions of this Article XII, to the payment of
amounts payable under Senior Indebtedness of the Company, then the Holders
shall be entitled to receive from the holders of such Senior Indebtedness
any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount sufficient to pay all amounts payable
under or in respect of such Senior Indebtedness in full.
SECTION 12.5. Obligations of the Company Unconditional.
Nothing contained in this Article XII or elsewhere in this Indenture or in
the Securities is intended to or shall impair as between the Company and
the Holders, the obligation of each such Person, which is absolute and
unconditional, to pay to the Holders the principal of, premium, if any,
interest on, and Liquidated Damages with respect to, the Securities as and
when the same shall become due and payable in accordance with their terms,
or is intended to or shall affect the relative rights of the Holders and
creditors of the Company other than the holders of the Senior Indebtedness,
nor shall anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article
XII, of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
Notwithstanding anything to the contrary in this Article XII or elsewhere
in this Indenture or in the Securities, upon any distribution of assets of
the Company referred to in this Article XII, the Trustee, subject to the
provisions of Sections 7.1 and 7.2, and the Holders shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction
in which such dissolution, winding up, liquidation or reorganization
proceedings are pending, or a certificate of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the
Holders for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XII so long as such court has been apprised of
the provisions of, or the order, decree or certificate makes reference to,
the provisions of this Article XII. Nothing in this Section 12.5 shall
apply to the claims of, or payments to, the Trustee under or pursuant to
Section 7.7 or otherwise for its own benefit.
SECTION 12.6. Trustee and Other Agents Entitled to Assume Payments Not
Prohibited in Absence of Notice.
The Trustee and all other Agents shall not at any time be charged with
knowledge of the existence of any facts which would prohibit the making of
any payment to or by the Trustee unless and until a Trust Officer of the
Trustee or any Paying Agent shall have actually received, no later than one
Business Day prior to such payment, written notice thereof in compliance
with Section 14.2 from the Company or from one or more holders of Senior
Indebtedness or from any representative therefor and, prior to the receipt
of any such written notice, the Trustee, subject to the provisions of
Sections 7.1 and 7.2, shall be entitled in all respects conclusively to
assume that no such fact exists.
SECTION 12.7. Application by Trustee of Assets Deposited with It.
Amounts deposited in trust with the Trustee pursuant to and in accordance
with this Indenture shall be, subject to Section 7.7, for the sole benefit
of Securityholders and, to the extent allocated for the payment of
Securities, shall not be subject to the subordination provisions of this
Article XII. Otherwise, any deposit of assets with the Trustee or any
other Agent (whether or not in trust) for the payment of principal of or
interest on any Securities shall be subject to the provisions of Sections
12.1, 12.2, 12.3 and 12.4; provided that, if prior to one Business Day
preceding the date on which by the terms of this Indenture any such assets
may become distributable for any purpose (including, without limitation,
the payment of either principal of or interest on any Security) the Trustee
or such Paying Agent shall not have received with respect to such assets
the written notice provided for in Section 12.6, then the Trustee or such
Paying Agent shall have full power and authority to receive such assets and
to apply the same to the purpose for which they were received, without
liability, and shall not be affected by any notice to the contrary which
may be received by it on or after such date.
SECTION 12.8. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination provisions contained in this Article XII shall at any
time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company with the terms of
this Indenture, regardless of any knowledge thereof which any such holder
may have or be otherwise charged with. The holders of Senior Indebtedness
may extend, renew, modify or amend the terms of the Senior Indebtedness or
any security therefor and release, sell or exchange such security and
otherwise deal freely with the Company, all without affecting the
liabilities and obligations of the parties to this Indenture or the
Holders.
SECTION 12.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities.
Each Holder of the Securities by his acceptance thereof authorizes the
Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provisions contained in this
Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors
of the Company), the immediate filing of a claim for the unpaid balance of
his Securities in the form required in said proceedings and cause said
claim to be approved. If the Trustee does not file a proper claim or proof
of debt in the form required in such proceeding prior to 30 days before the
expiration of the time to file such claim or claims, then the holders of
the Senior Indebtedness or their representative are or is hereby authorized
to have the right to file and are or is hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Securities.
Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Senior Indebtedness or their representative to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee
or the holders of Senior Indebtedness or their representative to vote in
respect of the claim of any Securityholder in any such proceeding.
SECTION 12.10. Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Article XII in respect of any Senior Indebtedness at any time held by it to
the same extent as any other holder of Senior Indebtedness, and nothing in
this Indenture shall be construed to deprive the Trustee of any of its
rights as such holder.
SECTION 12.11. Article XII Not to Prevent Events of Default.
The failure to make a payment on account of principal of, premium, if any,
interest on, or Liquidated Damages with respect to, the Securities by
reason of any provision of this Article XII shall not be construed as
preventing the occurrence of a Default or an Event of Default under Section
6.1 or in any way prevent the Holders from exercising any right hereunder
other than the right to receive payment on the Securities.
SECTION 12.12. No Duty of Trustee and Other Agents to Holders of Senior
Indebtedness.
The Trustee and the other Agents shall not be deemed to owe any fiduciary
duty to the holders of Senior Indebtedness, and shall not be liable to any
such holders (other than for its willful misconduct or negligence) if it
shall in good faith mistakenly pay over or distribute to the Holders of
Securities or the Company or any other Person, cash, property or securities
to which any holders of Senior Indebtedness shall be entitled by virtue of
this Article XII or otherwise. Nothing in this Section 12.12 shall affect
the obligation of any other such Person receiving such payment or
distribution from the Trustee or any other Agent to hold such payment for
the benefit of, and to pay such payment over to, the holders of Senior
Indebtedness or their representative.
ARTICLE XIII.
CONVERSION OF SECURITIES
SECTION 13.1. Conversion Privilege.
Subject to and upon compliance with the provisions of this Article XIII, at
the option of the Holder thereof, any Security may at any time, be
converted, in whole, or in part in multiples of $1,000 principal amount,
into fully paid and non-assessable shares of Common Stock issuable upon
conversion of the Securities, at the conversion price in effect at the Date
of Conversion, until and including, but not after the close of business on
the Stated Maturity, unless such Security or some portion thereof shall
have been called for redemption or delivered for repurchase prior to such
date and no default is made in making due provision for the payment of the
Redemption Price in accordance with the terms of this Indenture, in which
case, with respect to such Security or portion thereof as has been so
called for redemption or delivered for repurchase, such Security or portion
thereof may be so converted until and including, but not after, the close
of business on the Business Day immediately prior to the Redemption Date or
Repurchase Date, as applicable, for such Security, unless the Company
subsequently fails to pay the applicable Redemption Price or Repurchase
Price, as the case may be.
SECTION 13.2. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any Security
to be converted shall surrender such Security to the Company 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, in substantially the form set forth on the reverse of the
Security, that the Holder elects to convert such Security or a stated
portion thereof constituting a multiple of $1,000 principal amount, and, if
such Security is surrendered for conversion during the period between the
close of business on any Record Date and the opening of business on the
next following Interest Payment Date and has not been called for
redemption on a Redemption Date which occurs within such period,
accompanied (except in the case of the Interest Payment Date occurring on
March 1, 2001) also by payment of an amount equal to the interest payable
on such Interest Payment Date on the principal amount of the Security being
surrendered for conversion, notwithstanding such conversion. Such notice
of conversion shall also state the name or names (with address) in which
the certificate or certificates for shares of Common Stock shall be issued.
Securities surrendered for conversion shall (if reasonably required by the
Company or the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company
duly executed by, the Holder or his attorney duly authorized in writing.
As promptly as practicable after the receipt of such notice and the
surrender of such Security as aforesaid, the Company shall, subject to the
provisions of Section 13.8 hereof, 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 such
conversion of Securities in accordance with the provisions of this Article
XIII and Cash, as provided in Section 13.3 hereof, in respect of any
fraction of a share of Common Stock otherwise issuable upon such
conversion. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the date (herein called the
"Date of Conversion") on which such 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 upon such
conversion shall be deemed to have become on the Date of Conversion the
holder or holders of record of the shares represented thereby; provided,
however, that any such surrender on any date when the stock transfer books
of the Company shall be closed shall cause the person or persons in whose
name or names the certificate or certificates for such shares are to be
issued to be deemed to have become 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
Security, the Company shall as promptly as practicable execute, and the
Trustee shall thereafter authenticate and deliver to the Holder thereof, at
the expense of the Company, a Security or Securities in the aggregate
principal amount of the unconverted portion of the Security surrendered.
Except as otherwise expressly provided in this Indenture, no payment or
adjustment shall be made for interest accrued on any Security (or portion
thereof) converted or for dividends or distributions on any Common Stock
issued upon conversion of any Security.
SECTION 13.3. Fractional Interests.
No fractions of shares or scrip representing fractions of shares shall be
issued upon conversion of Securities. If more than one Security shall be
surrendered for conversion at one time by the same holder, the number of
full shares which shall be issuable upon conversion thereof shall be
computed on the basis of the aggregate principal amount of the Securities
so surrendered. If any fraction of a share of Common Stock would, except
for the foregoing provisions of this Section 13.3, be issuable on the
conversion of any Security or Securities, the Company shall make payment in
lieu thereof in an amount of Cash equal to the value of such fraction
computed on the basis of the last sale price of the Common Stock as
reported on the New York Stock Exchange (or if not listed for trading
thereon, then on the principal national securities exchange or on the
principal automated quotation system on which the Common Stock is listed or
admitted to trading) at the close of business on the Date of Conversion or
if no such sale takes place on such day, the last sale price for such day
shall be the average of the closing bid and asked prices regular way on the
New York Stock Exchange (or if not listed for trading thereon, on the
principal national securities exchange or on the principal automated
quotation system on which the Common Stock is listed or admitted to
trading) for such day (any such last sale price being hereinafter referred
to as the "Last Sale Price"). If on such Trading Day the Common Stock is
not quoted by any such organization, the fair value of such Common Stock on
such day, as reasonably determined in good faith by the Board of Directors
of the Company, shall be used.
SECTION 13.4. Conversion Price.
The conversion price per share of Common Stock issuable upon conversion of
the Securities (as such price may be adjusted, herein called the
"Conversion Price") shall initially be $38.66 (which reflects a conversion
rate of 25.869 shares of Common Stock per $1,000 in principal amount of
Securities).
SECTION 13.5. Adjustment of Conversion Price.
The Conversion Price shall be subject to adjustment from time to time as
follows:
(a) In case the Company shall make or pay a dividend or make a
distribution in shares of Common Stock on any class of Capital Stock of the
Company, the Conversion Price in effect immediately following the record
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on such date
and the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution. An
adjustment made pursuant to this subsection (a) shall become effective
immediately, except as provided in subsection (i) and (j) below, after such
record date.
(b) In case the Company shall (1) subdivide its outstanding shares of
Common Stock into a greater number of shares or (2) combine or reclassify
its outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately following the effectiveness of such
action shall be adjusted by multiplying such Conversion Price by a fraction
of which the numerator shall be the number of shares of Common Stock
outstanding immediately prior to such subdivision or combination and the
denominator shall be the number of shares outstanding immediately after
giving effect to such subdivision or combination. An adjustment made
pursuant to this subsection (b) shall become effective immediately, except
as provided in subsection (i) and (j) below, after the effective date of a
subdivision or combination.
(c) In case the Company shall issue rights, options or warrants to all or
substantially all holders of Common Stock entitling them to subscribe for
or purchase shares of Common Stock at a price per share less than the then
current market price per share of the Common Stock (as determined pursuant
to subsection (g) below) on the record date fixed for determination of the
stockholders entitled to receive such rights, option or warrants, the
Conversion Price in effect immediately following such record date shall be
adjusted to a price, computed to the nearest cent, so that the same shall
equal the price determined by multiplying:
(i) such Conversion Price by a fraction, of which
(ii) the numerator shall be (A) the number of shares of Common Stock
outstanding on such record date plus (B) the number of shares which the
aggregate offering price of the total number of shares 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
(iii) the denominator shall be (A) the number of shares of Common Stock
outstanding on such record date plus (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 (i) and (j) below, after the record date for the determination
of holders entitled to receive such rights, options or warrants; provided,
however, that if any such rights, options or warrants issued by the Company
as described in this subsection (c) are only exercisable upon the
occurrence of certain triggering events, then the Conversion Price will not
be adjusted as provided in this subsection (c) until such triggering events
occur. Upon the expiration or termination of any rights, options or
warrants without the exercise of such rights, options or warrants, the
Conversion Price then in effect shall be adjusted immediately to the
Conversion Price which would have been in effect at the time of such
expiration or termination had such rights, options or warrants, to the
extent outstanding immediately prior to such expiration or termination,
never been issued.
(d) In case the Company or any Subsidiary of the Company shall distribute
to all or substantially all holders of Common Stock, any of its assets,
evidences of indebtedness, cash or securities (other than (x) dividends or
distributions exclusively in cash, (y) any dividend or distribution for
which an adjustment is required to be made in accordance with subsection
(a) or (c) above and in mergers and consolidations to which Section 13.6
applies, or (z) any distribution of rights or warrants subject to
subsection (l) below) then in each such case the Conversion Price in effect
immediately following the record date fixed for the determination of the
stockholders entitled to such distribution shall be adjusted so that the
same shall equal the price determined by multiplying such Conversion Price
by a fraction of which the numerator shall be the then current market price
per share of the Common Stock (determined as provided in subsection (g)
below) on such record date less the then fair market value (as reasonably
determined in good faith by the Board of Directors of the Company) of the
portion of the assets so distributed applicable to one share of Common
Stock, and of which 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 (i) and (j) below, after the
record date for the determination of stockholders entitled to receive such
distribution.
(e) In case the Company or any Subsidiary of the Company shall make any
distribution consisting exclusively of cash (excluding any cash portion of
distributions for which an adjustment is required to be made in accordance
with subsection (d) above, or cash distributed upon a merger or
consolidation to which Section 13.6 applies) to all or substantially all
holders of Common Stock in an aggregate amount that, combined together with
(i) all other such all-cash distributions made within the then preceding 12
months in respect of which no adjustment pursuant to this subsection (e)
has been made and (ii) any cash and the fair market value of other
consideration paid or payable in respect of any tender or exchange offer by
the Company or any of its Subsidiaries for Common Stock concluded within
the preceding 12 months in respect of which no adjustment has been made,
exceeds 15% of the Company's market capitalization (defined as being the
product of the then current market price of the Common Stock (determined as
provided in subsection (g) below) times the number of shares of Common
Stock then outstanding) on the record date fixed for the determination of
the stockholders entitled to such distribution, in each such case the
Conversion Price immediately following such record date shall be adjusted
so that the same shall equal the price determined by multiplying such
Conversion Price by a fraction of which the numerator shall be the then
current market price per share of the Common Stock on such record date less
the amount of the cash and/or fair market value (as reasonably determined
in good faith by the Board of Directors of the Company) of other
consideration so distributed applicable to one share of Common Stock, and
of which 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 (i) and (j) below, after the record date
for the determination of stockholders entitled to receive such
distribution.
(f) In case the Company or any Subsidiary of the Company shall complete a
tender or exchange offer for all or any portion of the Common Stock (any
such tender or exchange offer being referred to as an "Offer") that
involves an aggregate consideration having a fair market value as of the
expiration of such Offer (the "Expiration Time") that, together with (i)
any cash and the fair market value of any other consideration payable in
respect of any other tender or exchange offer, as of the expiration of such
other tender or exchange offer, expiring within the 12 months preceding the
expiration of such Offer and in respect of which no Conversion Price
adjustment pursuant to this subsection (f) has been made and (ii) the
aggregate amount of any all-cash distributions referred to in subsection
(e) of this Section 13.5 to all holders of Common Stock within the 12
months preceding the expiration of such Offer for which no conversion price
adjustment pursuant to such subsection (e) has been made, exceeds 15% of
the product of the then current market price per share (determined as
provided in subsection (g) below) of the Common Stock on the Expiration
Time times the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Expiration Time, the Conversion Price
in effect immediately following such Expiration Time shall be reduced by
multiplying such Conversion Price by a fraction of which the numerator
shall be (i) the product of the then current market price per share
(determined as provided in subsection (g) below) of the Common Stock on the
Expiration Time times the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time minus
(ii) the fair market value of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the
terms of the Offer) of all shares validly tendered and not withdrawn as of
the Expiration Time (the shares deemed so accepted being referred to as the
"Purchased Shares") and the denominator shall be the product of (i) such
current market price per share on the Expiration Time times (ii) such
number of outstanding shares on the Expiration Time less the number of
Purchased Shares, such reduction to become effective immediately prior to
the opening of business on the day following the Expiration Time.
For purposes of this subsection (f), the fair market value of any
consideration with respect to an Offer shall be reasonably determined in
good faith by the Board of Directors of the Company and described in a
Board Resolution.
(g) For the purpose of any computation under subsections (c), (d), (e)
and (f) above, the current market price per share of Common Stock on any
date shall be deemed to be the average of the Last Sale Prices of a share
of Common Stock for the five consecutive Trading Days selected by the
Company commencing not more than 20 Trading Days before, and ending not
later than, the earlier of the date in question and the date before the
"'ex' date," with respect to the issuance, distribution or Offer requiring
such computation. If on any such Trading Day the Common Stock is not
listed by any organization referred to in the definition of Last Sale Price
in Section 13.3 hereof, the fair value of the Common Stock on such day, as
reasonably determined in good faith by the Board of Directors of the
Company, shall be used. For purposes of this paragraph, the term "'ex'
date," when used with respect to any issuance, distribution or payments
with respect to an Offer, means the first date on which the Common Stock
trades regular way on the New York Stock Exchange (or if not listed or
admitted to trading thereon, then on the principal national securities
exchange or the Nasdaq Stock Market's National Market if the Common Stock
is listed or admitted to trading thereon) without the right to receive such
issuance, distribution or Offer.
(h) In addition to the foregoing adjustments in subsections (a), (b),
(c), (d), (e) and (f) above, the Company, from time to time and to the
extent permitted by law, may reduce the Conversion Price by any amount for
at least 20 Business Days, if the Board of Directors has made a
determination, which determination shall be conclusive, that such reduction
would be in the best interests of the Company. The Company shall cause
notice of such reduction to be mailed to each Holder of Securities, in the
manner specified in Section 13.7, at least 15 days prior to the date on
which such reduction commences. The Company may, at its option, also make
such reductions in the Conversion Price in addition to those set forth
above, as the Board of Directors deems advisable to avoid or diminish any
income tax to holders of shares of Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any event
treated as such for United States federal income tax purposes.
(i) In any case in which this Section 13.5 shall require that an
adjustment be made 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 Security
converted after such record date and on and before such adjustment shall
have become effective (i) defer paying any Cash payment pursuant to Section
13.3 hereof or issuing to the Holder of such Security the number of shares
of Common Stock and other capital stock of the Company (or other assets or
securities) 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 13.3 hereof and issue to such Holder the additional shares of
Common Stock and other Capital Stock of the Company issuable on such
conversion.
(j) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1.0% of the
Conversion Price; provided, that any adjustments which by reason of this
subsection (i) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Article XIII shall be made to the nearest cent or to the nearest one-
hundredth of a share, as the case may be.
(k) Whenever the Conversion Price is 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 a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of the
correctness of such adjustment, and (ii) mail or cause to be mailed a
notice of such adjustment to each holder of Securities at his address as
the same appears on the registry books of the Company.
(l) In the event that the Company distributes rights or warrants (other
than those referred to in subsection (c) above) pro rata to holders of
Common Stock, so long as any such rights or warrants have not expired or
been redeemed by the Company, the Company shall make proper provision so
that the Holder of any Note surrendered for conversion will 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 warrants 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
warrants of separate certificates evidencing such rights or warrants (the
"Distribution Date"), the same number of rights or warrants 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 warrants,
and (ii) if such conversion occurs after such Distribution Date, the same
number of rights or warrants to which a holder of the number of shares of
Common Stock into which the principal amount of such Note so converted was
convertible immediately prior to such Distribution Date would have been
entitled on such Distribution Date in accordance with the terms and
provisions of and applicable to the rights or warrants.
SECTION 13.6. Continuation of Conversion Privilege in Case of
Reclassification, Change, Merger, Consolidation or Sale of Assets.
If any of the following shall occur, namely: (a) any reclassification or
change of outstanding shares of Common Stock issuable upon conversion of
the Securities (other than a change in par value, or from par value to no
par value, or from no par value, to par value, or as a result of a
subdivision or combination), (b) any consolidation or merger of the Company
with or into any other Person, or the merger of any other Person with or
into the Company (other than a merger which does not result in any
reclassification, change, conversion, exchange or cancellation of
outstanding shares of Common Stock) or (c) any sale, transfer or conveyance
of all or substantially all of the assets of the Company (computed on a
consolidated basis), then the Company, or such successor or purchasing
entity, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, sale or conveyance,
execute and deliver to the Trustee a supplemental indenture providing that
the Holder of each Security then outstanding shall have the right to
convert such Security only into the kind and amount of shares of stock and
other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, sale, transfer or
conveyance by a holder of the number of shares of Common Stock issuable
upon conversion of such Security immediately prior to such
reclassification, change, consolidation, merger, sale, transfer or
conveyance assuming such holder of Common Stock of the Company failed to
exercise his rights of an election, if any, as to the kind or amount of
securities, cash and other property receivable upon such reclassification,
change, consolidation, merger, sale, transfer or conveyance (provided that
if the kind or amount of securities, cash, and other property receivable
upon such reclassification, change, consolidation, merger, sale, transfer
or conveyance is not the same for each share of Common Stock of the Company
held immediately prior to such reclassification, change, consolidation,
merger, sale, transfer or conveyance in respect of which such rights of
election shall not have been exercised ("Non-Electing Share"), then for the
purpose of this Section 13.6 the kind and amount of securities, cash and
other property receivable upon such reclassification, change,
consolidation, merger, sale, transfer or conveyance by each non-electing
share shall be deemed to be the kind and amount so receivable per share by
a plurality of the non-electing shares). Such supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article III. If, in
the case of any such consolidation, merger, sale or conveyance, the stock
or other securities and property (including cash) receivable thereupon by a
holder of shares of Common Stock includes shares of stock or other
securities and property (including cash) of a corporation other than the
successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or conveyance, then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders of the
Securities as the Board of Directors of the Company shall reasonably
consider necessary by reason of the foregoing. The provisions of this
Section 13.6 shall similarly apply to successive consolidations, mergers,
sales or conveyances.
Notice of the execution of each such supplemental indenture shall be mailed
by the Company to each Holder of Securities at his address as the same
appears on the registry books of the Company.
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 (including cash) receivable by
Holders of Securities 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 Article VIII hereof, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file
with the Trustee prior to the execution of any such supplemental indenture)
with respect thereto.
SECTION 13.7. Notice of Certain Events.
In case:
(a) the Company shall declare a dividend (or any other distribution)
payable to the holders of Common Stock (other than cash dividends);
(b) the Company shall authorize the granting to the holders of Common
Stock of rights, warrants or options to subscribe for or purchase any
shares of stock of any class or of any other rights;
(c) the Company shall authorize any reclassification or change of the
Common Stock (including 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;
(d) there shall be proposed any voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
(e) the Company or any of its Subsidiaries shall complete an Offer;
then, the Company shall cause to be filed at the office or agency
maintained for the purpose of conversion of the Securities as provided in
Section 13.2 hereof, and shall cause to be mailed to each Holder of
Securities, at his address as it shall appear on the registry books of the
Company, 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 (1) a record is
expected to be taken for the purpose of such dividend, distribution,
rights, warrants or options or 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, rights, warrants or options or to
participate in such Offer are to be determined, or (2) 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 or other property deliverable upon such
reclassification, change, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding-up.
SECTION 13.8. Taxes on Conversion.
The Company will pay any and all documentary, stamp or similar taxes
payable to the United States of America or any political subdivision or
taxing authority thereof or therein in respect of the issue or delivery of
shares of Common Stock on conversion of Securities pursuant thereto;
provided, however, that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issue or
delivery of shares of Common Stock in a name other than that of the Holder
of the Securities to be converted and no such issue or delivery shall be
made unless and 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 Securities.
SECTION 13.9. Company to Provide Stock.
The Company shall reserve, free from pre-emptive rights, out of its
authorized but unissued shares, sufficient shares to provide for the
conversion of the Securities from time to time as such Securities are
presented for conversion, provided, that nothing contained herein shall be
construed to preclude the Company from satisfying its obligations in
respect of the conversion of Securities by delivery of repurchased shares
of Common Stock which are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose of conversion
of Securities hereunder require registration with or approval of any
governmental authority under any Federal or state law 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 use
its best efforts to secure such registration or approval, as the case may
be, provided, however, that nothing in this Section 13.9 shall be deemed to
limit in any way the obligations of the Company provided in this Article
XIII.
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 corporate 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 Securities will upon issue be fully paid and non-
assessable by the Company and free of preemptive rights.
SECTION 13.10. Disclaimer of Responsibility for Certain Matters.
Neither the Trustee nor any agent of the Trustee or conversion agent shall
at any time be under any duty or responsibility to any Holder of Securities
to determine whether any facts exist which may require any adjustment of
the Conversion Price, or with respect to the Officers' Certificate referred
to in Section 13.5 hereof, or with respect to the nature or extent of any
such adjustment when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making
the same. Neither the Trustee, any agent of the Trustee nor the conversion
agent 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 Security; and neither the Trustee, any agent of
the Trustee nor any conversion agent makes any representation with respect
thereto. Neither the Trustee, any agent of the Trustee nor the conversion
agent shall be responsible for any failure of the Company to issue,
register the transfer of or (except that the conversion agent shall deliver
any shares held by it for the purpose) deliver any shares of Common Stock
or stock certificates or other securities or property (including cash) upon
the surrender of any Security for the purpose of conversion or, subject to
Article VIII hereof, to comply with any of the covenants of the Company
contained in this Article XIII.
SECTION 13.11. Return of Funds Deposited for Redemption of Converted
Securities.
Any funds which at any time shall have been deposited by the Company or on
its behalf with the Trustee or any other Paying Agent for the purpose of
paying the principal of and interest on any of the Securities and which
shall not be required for such purposes because of the conversion of such
Securities, as provided in this Article XIII, shall after such conversion
be repaid to the Company by the Trustee or such other Paying Agent.
ARTICLE XIV.
MISCELLANEOUS
SECTION 14.1. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts with the
duties imposed by operation of the TIA, the imposed duties, whether or not
this Indenture has been qualified under the TIA, shall control.
SECTION 14.2. Notices.
Any notices or other communications to the Company or the Trustee required
or permitted hereunder shall be in writing, and shall be sufficiently given
if made by hand delivery, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as
follows:
if to the Company:
Oak Industries Inc.
1000 Winter Street
Waltham, MA 02154
Attention: General Counsel
Facsimile: (781) 890-6116
if to the Trustee:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Attention: Corporate Trust - Oak Industries Inc. Note
Facsimile: 617-664-5371
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any
notice or communication to any party shall be deemed to have been given or
made as of the date so delivered, if personally delivered; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and five
Business Days after mailing if sent by registered or certified mail,
postage prepaid (except that a notice of change of address shall not be
deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be mailed to
him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be
sufficiently given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it
except for notices and communications to the Trustee which shall be
effective only upon actual receipt thereof.
SECTION 14.3. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other Person
shall have the protection of TIA 312(c).
SECTION 14.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) An Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel (in form and substance reasonably satisfactory
to the Trustee) stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 14.5. Statements Required in Certificate or Opinion.
Each certificate or Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, 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 or not, in the opinion of each such Person,
such condition or covenant has been complied with; provided, however, that
with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
SECTION 14.6. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules
for its functions.
SECTION 14.7. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York or Boston, Massachusetts are authorized
or obligated by law or executive order to close. If a payment date is a
Legal Holiday at such place, payment
may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 14.8. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE COURT SITTING IN NEW
YORK OR ANY FEDERAL COURT SITTING IN THE STATE OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE
AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE
OR ANY SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY
IN ANY OTHER JURISDICTION.
SECTION 14.9. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 14.10. No Recourse Against Others.
No direct or indirect partner, employee, stockholder, director or officer,
as such, past, present or future of the Company or any successor
corporation, shall have any personal liability in respect of the
obligations of the Company under the Securities or this Indenture by reason
of his, her or its status as such partner, stockholder, employee, director
or officer. Each Securityholder by accepting a Security waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Securities.
SECTION 14.11. Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 14.12. Duplicate Originals.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all
of them together shall represent the same agreement.
SECTION 14.13. Severability.
In case any one or more of the provisions in this Indenture or in the
Securities shall be held invalid, illegal or unenforceable, in any respect
for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of
the provisions hereof shall be enforceable to the full extent permitted by
law.
SECTION 14.14. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of the Articles
and the Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 14.15. Qualification of Indenture.
The Company shall qualify this Indenture under the TIA in accordance with
the terms and conditions of the Registration Rights Agreement and shall pay
all costs, fees and expenses (including attorneys' fees for the Company and
the Trustee) incurred in connection therewith, including, but not limited
to, costs, fees and expenses of qualification of the Indenture and the
Securities and printing this Indenture and the Securities. The Trustee
shall be entitled to receive from the Company any such Officers'
Certificates, Opinions of Counsel or other documentation as it may
reasonably request in connection with any such qualification of this
Indenture under the TIA.
SECTION 14.16. Registration Rights.
Certain Holders of the Securities are entitled to certain registration
rights with respect to such Securities pursuant to, and subject to the
terms of, the Registration Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
OAK INDUSTRIES INC., a Delaware corporation
By:
Title:
State Street Bank and Trust Company, as Trustee
By:
Name:
Title:
EXHIBIT A
[FORM OF SECURITY]
OAK INDUSTRIES INC.
4 7/8% CONVERTIBLE SUBORDINATED NOTE
DUE 2008
No. __ CUSIP No. ______________
$_____________
Oak Industries Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successors under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________________________________, or registered assigns, the principal sum
of ___________ Dollars, on _____________ __, 2008.
Interest Payment Dates: March 1 and September 1; commencing September 1,
1998.
Record Dates: February 15 and August 15.
Reference is made to the further provisions of this Security hereinafter
set forth, which will, for all purposes, have the same effect as if set
forth at this place.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
OAK INDUSTRIES INC., a Delaware corporation
[Seal]
By:
Name:
Title:
Attest:
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned Indenture.
State Street Bank and Trust Company, as Trustee
By:
Authorized Signatory
Dated: _______________
OAK INDUSTRIES INC.
4 7/8% Convertible Subordinated Note
due 2008
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by
The Depository Trust Company, a New York Corporation ("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. Unless this certificate is presented by an authorized
representative of the Depository to the Company or its agent for
registration of transfer, exchange or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of the Depositary (and any
payment is made to Cede & Co. or to such other entity as is requested by
an authorized representative of the Depositary), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF U.S. PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) (A "QIB"), (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT (AN "IAI"), OR (C) IT IS ACQUIRING THIS SECURITY
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO
A PERSON WHO THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (C) TO AN IAI THAT,
PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS
SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF THE
COMPANY SO REQUESTS, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S
UNDER THE SECURITIES ACT, (E) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM
BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING.
1. Interest.
Oak Industries Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successors under the Indenture
hereinafter referred to), promises to pay interest on the principal amount
of this Security at the rate of 4 7/8% per annum. To the extent it is
lawful, the Company promises to pay interest on any interest payment due
but unpaid on such principal amount at a rate of 4 7/8% per annum
compounded semi-annually.
The Company will pay interest semi-annually in cash in arrears on March 1
and September 1 of each year (each, an "Interest Payment Date"), commencing
September 1, 1998. Interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been
paid on the Securities, from February 25, 1998. Interest will be computed
on the basis of a 360-day year consisting of twelve 30-day months.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of
business on the Record Date immediately preceding the Interest Payment
Date. Holders must surrender Securities to a Paying Agent to collect
principal payments. Any such interest not so punctually paid, and
defaulted interest relating thereto, may be paid to the Persons who are
registered Holders at the close of business on a Special Record Date for
the payment of such defaulted interest, as more fully provided in the
Indenture referred to below. Except as provided below, the Company shall
pay principal and interest in such coin or currency of the United States of
America as at the time of payment shall be legal tender for payment of
public and private debts ("U.S. Legal Tender"). The Securities will be
payable as to principal, premium, interest and Liquidated Damages at the
office or agency of the Company maintained for such purpose within or
without the City and State of New York, or at the option of the Company,
payment of principal, premium, interest and Liquidated Damages may be made
by check mailed to the Holders at their addresses set forth in the registry
of Holders, and provided that, upon the request of The Depository Trust
Company, a New York corporation (the "Depositary"), payment by wire
transfer of immediately available funds will be required with respect to
principal of, premium and interest on and Liquidated Damages with respect
to Global Securities and all other Securities held of record by the
Depositary, or its nominee, if the Depositary shall have provided wire
transfer instructions to the Company or the Paying Agent.
3. Paying Agent and Registrar.
State Street Bank and Trust Company (the "Trustee") will act as Paying
Agent and Registrar. The Company may change any Paying Agent, Registrar or
co-Registrar without notice to the Holders. The Company or any of its
Subsidiaries may, subject to certain exceptions, act as Paying Agent,
Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of February
25, 1998 (as amended or supplemented from time to time the "Indenture"),
between the Company and the Trustee. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act, as in effect on the date
of the Indenture. The Securities are subject to all such terms, and
Holders of Securities are referred to the Indenture and said Act for a
statement of them. The Securities are general unsecured obligations of the
Company limited in aggregate principal amount to $115,000,000.
5. Redemption.
The Securities may be redeemed in whole or from time to time in part at any
time on and after March 1, 2001, at the option of the Company, at the
Redemption Price (expressed as a percentage of principal amount) set forth
below with respect to the indicated Redemption Date, in each case, plus any
accrued but unpaid interest and Liquidated Damages to (but excluding) the
Redemption Date. The Securities may not be so redeemed prior to March 1,
2001.
<TABLE>
<CAPTION>
If redeemed during
the 12-month period
beginning on March 1, 2001 Redemption Price
- -------------------------- ----------------
<S> <C>
2001 . . . . . . . . . . . . . . . . . . . . . . . 102.79
2002 . . . . . . . . . . . . . . . . . . . . . . . 102.09
2003 . . . . . . . . . . . . . . . . . . . . . . . 101.39
2004 . . . . . . . . . . . . . . . . . . . . . . .100.70
2005 and thereafter . . . . . . . . . . . . . . . .100.00%
</TABLE>
Any such redemption will comply with Article III of the Indenture.
6. Notice of Redemption.
Notice of redemption will be sent by first class mail, at least 30 days and
not more than 60 days prior to the Redemption Date to the Holder of each
Security to be redeemed at such Holder's last address as then shown upon
the registry books of the Registrar. Securities may be redeemed in part in
multiples of $1,000 only.
Except as set forth in the Indenture, from and after any Redemption Date,
if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent on such Redemption Date and
payment of the Securities called for redemption is not prohibited under
Article XII of the Indenture, the Securities called for redemption will
cease to bear interest and the only right of the Holders of such Securities
will be to receive payment of the Redemption Price, plus any accrued and
unpaid interest and Liquidated Damages, if any, to the Redemption Date.
7. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder may register the
transfer of, or exchange Securities in accordance with, the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required
by law or permitted by the Indenture. The Registrar need not register the
transfer of or exchange any Securities selected for redemption.
8. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of it for
all purposes.
9. Unclaimed Money.
If money for the payment of principal, interest or Liquidated Damages
remains unclaimed for two years, the Trustee and the Paying Agent(s) will
pay the money back to the Company at its written request. After that, all
liability of the Trustee and such Paying Agent(s) with respect to such
money shall cease.
10. Amendment; Supplement; Waiver.
Subject to specified exceptions, the Indenture or the Securities may be
amended or supplemented, and any existing Default or Event of Default or
compliance with any provision may be waived, with the written consent of
the Holders of a majority in aggregate principal amount of the Securities
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Securities to, among
other things, cure any ambiguity, defect or inconsistency, or make any
other change that does not adversely affect the rights of any Holder of a
Security.
11. Conversion Rights.
Subject to the provisions of the Indenture, the Holders have the right to
convert the principal amount of the Securities into fully paid and
nonassessable shares of Common Stock of the Company at the initial
conversion price per share of Common Stock of $38.66 (which reflects a
conversion rate of 25.869 shares of Common Stock per $1,000 in principal
amount of Securities ), or at the adjusted conversion price then in effect,
if adjustment has been made as provided in the Indenture, upon surrender of
the Security to the Company, together with a fully executed notice in
substantially the form attached hereto and, if required by the Indenture,
an amount equal to accrued interest payable on such Security.
12. Ranking.
Payment of principal, premium, if any, interest on and Liquidated Damages
with respect to the Securities is subordinated, in the manner and to the
extent set forth in the Indenture, to the prior payment in full of all
Senior Indebtedness.
13. Repurchase at Option of Holder Upon a Change of Control.
If there is a Change of Control, the Company shall be required, subject to
the provisions of the Indenture, to offer to purchase on the Repurchase
Date all outstanding Securities at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to the Repurchase Date. Holders of Securities will
receive a Repurchase Offer from the Company prior to any related Repurchase
Date and may elect to have such Securities purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below.
14. Successors.
When a successor assumes all the obligations of its predecessor under the
Securities and the Indenture, the predecessor will be released from those
obligations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing (other than as Event of
Default relating to certain events of bankruptcy, insolvency or
reorganization), then in every such case, unless the principal of all of
the securities shall have already become due and payable, either the
Trustee or the Holders of 25% in aggregate principal amount of Securities
then outstanding may declare all the Securities to be due and payable
immediately in the manner and with the effect provided in the Indenture.
Holders of Securities may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the Trustee
in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal, interest or Liquidated Damages),
if it determines that withholding notice is in their interest.
16. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
17. No Recourse Against Others.
No stockholder, director, officer or employee, as such, past, present or
future, of the Company or any successor corporation shall have any personal
liability in respect of the obligations of the Company under the Securities
or the Indenture by reason of his, her or its status as such stockholder,
director, officer or employee. Each Holder of a Security by accepting a
Security waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Security
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants
by the entireties), JT TEN (= joint tenants with right of survivorship and
not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to
be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers
as printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
21. Additional Rights of Holders of Transfer Restricted Securities.
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Securities shall have all the rights set forth in the
Registration Rights Agreement.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Request may be made to:
Oak Industries Inc.
1000 Winter Street
Waltham, MA 02154
Attention: General Counsel
[FORM OF ASSIGNMENT]
I or we assign this Security to
- -------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
- -------------------------------------------------------------------------
Please insert Social Security or other identifying number of assignee
and irrevocably appoint _______________ agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
Dated: Signed:
(Sign exactly as your name appears on
the other side of this Security)
Signature Guaranty:
Signatures must be guarantied by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guaranty program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Article XI of the Indenture, check the box: / /
If you want to elect to have only part of this Security purchased by the
Company pursuant to Article XI of the Indenture, state the amount you want
to be purchased: $_____________
Date: Signature:
(Sign exactly as your name appears
on the other side of this Security)
Signature Guaranty:
Signatures must be guarantied by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guaranty program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES
The following exchanges of a part of this Global Security for Definitive
Securities have been made:
Date of Amount of Amount of Principal Amount Signature of
Exchange decrease in increase in of this Global authorized
Principal Principal Security following officer of
Amount of Amount of such decrease Trustee or
this Global this Global (or increase) Securities
Security Security Custodian
- ------------------------------------------------------------------------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 4 7/8% CONVERTIBLE SUBORDINATED NOTES DUE 2008 OF OAK INDUSTRIES
INC.
This Certificate relates to $100,000,000 principal amount of Securities
held in *_______ book-entry or * __________ definitive form by _________
(the "Transferor").
1. The Transferor:*
/ / (a) has requested the Trustee by written order to deliver in
exchange for its beneficial interest in the Global Security held by the
Depositary a Security or Securities in definitive, registered form of
authorized denominations and an aggregate principal amount equal to its
beneficial interest in such Global Security (or the portion thereof
indicated above); or
/ / (b) has requested the Trustee by written order to exchange or
register the transfer of a Security or Securities.
2. In connection with any such request and in respect of each such
Security, the Transferor does hereby certify that Transferor is familiar
with the Indenture relating to the above-captioned Securities and as
provided in Section 2.6 of such Indenture, the transfer of this Security
does not require registration under the Securities Act because:*
/ / (a) Such Security is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 2.6(a)(ii)(A) or
Section 2.6(d)(i)(A) of the Indenture).
/ / (b) Such Security is being transferred to a person who the
Transferor reasonably believes is a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) purchasing for its own
account or for the account of a qualified institutional buyer over which it
exercises sole investment discretion that is aware that the transfer is
being made in reliance on Rule 144A (in satisfaction of Section
2.6(a)(ii)(B), Section 2.6(b)(i)(x) or Section 2.6(d)(i)(B) of the
Indenture).
/ / (c) Such Security is being transferred in accordance with Regulation
S under the Securities Act (in satisfaction of Section 2.6(a)(ii)(D),
Section 2.6(b)(i)(y) or Section 2.6(d)(i)(D) of the Indenture). If
requested by either the Company or the Trustee, an Opinion of Counsel to
the effect that such transfer does not require registration under the
Securities Act accompanies this Certificate (in satisfaction of Section
2.6(a)(ii)(D) or Section 2.6(d)(i)(D) of the Indenture).
/ / (d) Such Security is being transferred to an institutional investor
that is an "accredited investor" within the meaning of Rule
501(a)(l),(2),(3) or (7) under the Securities Act which delivers a
certificate in the form of Exhibit B to the Indenture to the Trustee (in
satisfaction of Section 2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the
Indenture), and an opinion of counsel, if the Company or the Trustee so
requests.
/ / (e) Such Security is being transferred in reliance on and in
compliance with another exemption from the registration requirements of the
Securities Act. If requested by either the Company or the Trustee, an
Opinion of Counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 2.6(a)(ii)(E) or Section 2.6(d)(i)(E) of the
Indenture).
----------------------------
[INSERT NAME OF TRANSFEROR]
By:
Date:
3. Affiliation with the Company [check if applicable]
[ ] (a) The undersigned represents and warrants that it is, or at some
time during which it held this Security was, an Affiliate of the Company.
(b) If 3(a) above is checked and if the undersigned was not an
Affiliate of the Company at all times during which it held this Security,
indicate the periods during which the undersigned was an Affiliate of the
Company:
(c) If 3(a) above is checked and if the Transferee will not pay
the full purchase price for the transfer of this Security on or prior to
the date of transfer indicate when such purchase price will be paid:
TO BE COMPLETED BY TRANSFEREE IF 2(b) ABOVE IS CHECKED AND THE TRANSFEROR
IS NOT A QUALIFIED INSTITUTIONAL BUYER:
The undersigned represents and warrants that it is a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of
1933, as amended, and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule
144A or has determined not to request such information.
Dated: ---------------------------------
NOTICE: To be executed by an officer.
TO BE COMPLETED BY TRANSFEREE IF 2(c) ABOVE IS CHECKED:
The undersigned represents and warrants that it is not a "U.S. Person" (as
defined in Regulation S under the Securities Act of 1933, as amended).
Dated: --------------------------------
NOTICE: To be executed by an officer.
If none of the boxes under Section 2 of this certificate is checked or if
any of the above representations required to be made by the Transferee is
not made, the Registrar shall not be obligated to register this Security in
the name of any person other than the Holder hereof.
THE UNDERSIGNED HEREBY AGREES THAT, UNLESS THE BOX ABOVE UNDER ITEM 3(a) IS
CHECKED, THE UNDERSIGNED SHALL BE DEEMED TO HAVE REPRESENTED THAT IT IS NOT
NOR HAS IT BEEN AT ANY TIME DURING WHICH IT HELD THIS SECURITY AN
AFFILIATE, AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OF THE COMPANY.
Dated: --------------------------------
NOTICE: The signature of the Holder to this
assignment must correspond with the name as
written upon the face of this Security
particular, without alteration or
enlargement or any change whatsoever.
EXHIBIT B
Accredited Investor Letter
Oak Industries Inc.
c/o the Trustee
Ladies and Gentlemen:
This letter is delivered by the undersigned to request a transfer of
$________ principal amount of the 4 7/8% Convertible Subordinated Notes
due 2008 (the "Notes") of Oak Industries Inc. (the "Company"). The Notes
are described in that certain Offering Memorandum (the "Offering
Memorandum") dated February 20, 1998 relating to the offering of the Notes.
We acknowledge receipt of the Offering Memorandum and acknowledge that we
have read the Offering Memorandum, have had access to such financial and
other information and have been afforded the opportunity to ask such
questions of representatives of the Company and receive answers thereto, as
we deem necessary in connection with our decision to purchase the Notes.
Upon transfer the Notes would be registered in the name of the undersigned:
Name:
--------------------------------------------------------
Address:
-----------------------------------------------------
Taxpayer ID Number:
-------------------------------------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act")), purchasing for our own account or for the account
of such an institutional "accredited investor," and we are acquiring the
Notes for investment purposes and not with a view to, or for offer or sale
in connection with any distribution in violation of the Securities Act and
we have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risk of our investment in the
Notes and invest in or purchase securities similar to the Notes in the
normal course of our business, and we, and any account for which we are
acting, are each able to bear the economic risk of our or its investment.
We confirm that neither the Company nor any person acting on its behalf has
offered to sell the Notes by, and that we have not been made aware of the
offering of the Notes by, any form of general solicitation or general
advertising, including, but not limited to, any advertisement, article,
notice or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio.
2. We understand that the Notes and the Common Stock issuable upon
conversion of the Notes (the Notes and such Common Stock are collectively
referred to herein as the "Restricted Securities") have not been registered
under the Securities Act, or any state securities laws, and, unless so
registered, may not be sold except as permitted in the following sentence.
We agree on our own behalf and on behalf of any investor account for which
we are purchasing Notes that such Restricted Securities are "restricted
securities" within the meaning of Rule 144 under the Securities Act and to
offer, sell or otherwise transfer such Restricted Securities prior to the
date which is two years after the date of original issue (the "Resale
Restriction Termination Date") only (a) to the Company or any of its
subsidiaries, (b) so long as the Restricted Securities are eligible for
resale pursuant to Rule 144A under the Securities Act, to a person we
reasonably believe is a qualified institutional buyer under Rule 144A under
the Securities Act (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being
made in reliance on Rule 144A, (c) to an institutional "accredited
investor," within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, that is purchasing for its own account or for the account
of an institutional "accredited investor," (d) pursuant to offers and sales
that occur outside the United States within the meaning of Regulation S
under the Securities Act, (e) in a transaction meeting the requirements of
Rule 144 under the Securities Act, (f) pursuant to any other available
exemption from the registration requirements of the Securities Act, or (g)
pursuant to a registration statement that has been declared effective under
the Securities Act, subject in each of the foregoing cases to any
requirement of law that the disposition of our property or the property of
such investor account or accounts be at all times within our or their
control and in compliance with any applicable state securities laws. The
foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the
Restricted Securities is proposed to be made pursuant to clause (c) above
prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this
letter to the Company and the trustee (the "Trustee") under the indenture,
dated as of February 25,1998 between the Company and the Trustee relating
to the Notes, which shall provide, among other things, that the transferee
is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is
acquiring such Restricted Securities for investment purposes and not for
distribution in violation of the Securities Act. Each purchaser
acknowledges that the Company and the Trustee reserve the right prior to
any offer, sale or other transfer, prior to the Resale Restriction
Termination Date, of the Restricted Securities pursuant to clause (c), (d)
or (f) above to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the Company and the
Trustee.
3. We understand that the Notes will be in the form of definitive
physical certificates bearing the legend set forth in clause (5) in the
"Notice to Investors" section of the Offering Memorandum.
We acknowledge that you, the Initial Purchasers and others will rely upon
our confirmations, acknowledgments and agreements set forth herein, and we
agree to notify you promptly in writing if any of our representations and
warranties herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
-------------------------------
By:
-------------------------------
EXHIBIT C
FORM OF CONVERSION NOTICE
TO: Oak Industries Inc.
The undersigned owner of this Security hereby: (i) irrevocably exercises
the option to convert this Security, or the portion hereof below
designated, for shares of Common Stock of Oak Industries Inc. in accordance
with the terms of this Indenture referred to in this Security and (ii)
directs that such shares of Common Stock deliverable upon the conversion,
together with any check in payment for fractional shares and any
Security(ies) representing any unconverted principal amount hereof, be
issued and delivered to the registered holder hereof unless a different
name has been indicated below. If shares are to be delivered registered in
the name of a person other than the undersigned, the undersigned will pay
all transfer taxes payable with respect thereto. Any amount required to be
paid by the undersigned on account of interest accompanies this Security.
Dated:
--------------------------------
Signature
Fill in for registration of shares if to be delivered, and of Securities if
to be issued, otherwise than to and in the name of the registered holder.
---------------------------------
Social Security or other
Taxpayer Identifying Number
(Name)
(Street Address)
(City, State and Zip Code)
(Please print name and address)
Principal amount to be converted:
(if less than all)
$
-----------
This paragraph should only be added if the Security is issued in
global form.
This paragraph should be included only for the Transfer Restricted
Securities.
3 This schedule should only be added if the Security is issued in
global form.
* Check applicable box.
EXECUTION COPY
--------------
4 7/8% CONVERTIBLE
SUBORDINATED NOTES DUE 2008
REGISTRATION RIGHTS AGREEMENT
Dated as of February 20, 1998
by and among
Oak Industries Inc.
and
Donaldson, Lufkin and Jenrette Securities Corporation
Lehman Brothers
Cowen and Company
This Registration Rights Agreement (this "Agreement") is made and entered
into as of February 20, 1998 by and among Oak Industries Inc., a Delaware
corporation (the "Company"), and Donaldson, Lufkin and Jenrette
Securities Corporation, Lehman Brothers Inc. and Cowen and Company (each
an "Initial Purchaser" and, collectively, the "Initial Purchasers"), each
of whom has agreed to purchase the Company's 4 7/8% Convertible
Subordinated Notes due 2008 (the "Notes") pursuant to the Purchase
Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated February
20, 1998 (the "Purchase Agreement"), by and among the Company and the
Initial Purchasers. In order to induce the Initial Purchasers to purchase
the Notes, the Company has agreed to provide the registration rights set
forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchasers set forth in Section
3 of the Purchase Agreement. Capitalized terms used herein and not
otherwise defined shall have the meaning assigned to them in the Indenture,
dated February 25, 1998, between the Company and State Street Bank, as
Trustee, relating to the Notes (the "Indenture").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Affiliate: As defined in Rule 144 of the Act.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in New York, New York or Boston,
Massachusetts are authorized or obligated by law or executive order to
close.
Certificated Securities: Definitive Securities, as defined in the
Indenture.
Closing Date: The date hereof.
Common Stock: Common Stock, $.01 par value per share, of the Company.
Commission: The Securities and Exchange Commission.
Effectiveness Deadline: As defined in Section 3(a) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exempt Resales: The transactions in which the Initial Purchasers propose
to sell the Notes to certain "qualified institutional buyers," as such term
is defined in Rule 144A under the Act, to certain "accredited investors,"
as such term is defined in Rule 501(a)(1), (2), (3), (5) and (7) of
Regulation D under the Act and pursuant to Regulation S under the Act.
Filing Deadline: As defined in Sections 3(a) hereof.
Holders: As defined in Section 2 hereof.
Notes: The up to $115,000,000 aggregate principal amount of 4_%
Convertible Subordinated Notes being issued pursuant to the Purchase
Agreement.
Notice and Means a Notice of Registration Statement and Selling
Questionnaire: Securityholder Questionnaire containing the
information specified in Item 507 or 508 of Regulation S-K, as applicable,
of the Act and such other information with respect to such Holder and the
intended distribution of Transfer Restricted Securities as may be required
to amend the Shelf Registration Statement or supplement the related
Prospectus.
Prospectus: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, all material incorporated by
reference into such Prospectus and any information previously omitted in
reliance upon Rule 430A of the Act.
Recommencement Date: As defined in Section 5(d) hereof.
Registration Default: As defined in Section 4 hereof.
Regulation S: Regulation S promulgated under the Act.
Rule 144: Rule 144 promulgated under the Act.
Shelf Registration As defined in Section 3 hereof.
Statement:
Special Counsel: Any special counsel to the holders of the Transfer
Restricted Securities, for which holders of the Transfer Restricted
Securities will be reimbursed pursuant to Section 6(b) hereof.
Suspension Notice: As defined in Section 5(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted The Notes and the shares of Common Stock into
Securities: which the Notes are convertible, upon original issuance
thereof, and at all times subsequent thereto, until, in the case of any
such Notes or shares of Common Stock, (a) the date on which such Notes or
shares of Common Stock have been disposed of in accordance with a Shelf
Registration Statement, (b) the date on which such Notes or shares of
Common Stock are distributed to the public pursuant to Rule 144 or are
saleable pursuant to Rule 144(k) (or similar provisions then in effect)
under the Act, (c) the date on which such Notes or shares of Common Stock
cease to be outstanding, or (d) the date on which such Notes or shares of
Common Stock have otherwise been transferred and new Notes or shares of
Common Stock not subject to transfer restrictions under the Securities Act
have been delivered by or on behalf of the Company in accordance with the
Indenture.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "Holder") whenever such Person owns Transfer Restricted Securities.
SECTION 3. SHELF REGISTRATION
(a) Shelf Registration. As soon as practicable after the Closing Date but
in no event no later than 90 days after the Closing Date (such 90th day,
the "Filing Deadline"), the Company shall file with the Commission a shelf
registration statement pursuant to Rule 415 under the Act (the "Shelf
Registration Statement"), relating to all Transfer Restricted Securities,
and shall use its reasonable best efforts to cause such Shelf Registration
Statement to become effective on or prior to 180 days after the Closing
Date (such 180th day, the "Effectiveness Deadline").
The Company shall use its reasonable best efforts to keep any Shelf
Registration Statement required by this Section 3(a) continuously
effective, supplemented and amended as required by and subject to the
provisions of Sections 5(a) and (b) hereof to the extent necessary to
ensure that it is available for sales of Transfer Restricted Securities by
the Holders thereof entitled to the benefit of this Section 3(a), and to
ensure that it conforms with the requirements of this Agreement, the Act
and the policies, rules and regulations of the Commission as announced from
time to time, for a period of at least two years following the date on
which such Shelf Registration Statement first became effective under the
Act, or such shorter period as will terminate upon the earlier of either
(a) when all Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold pursuant thereto and (b) when, in the
written opinion of independent counsel to the Company, all outstanding
Transfer Restricted Securities held by persons that are not affiliates of
the Company may be resold without registration under the Act pursuant to
Rule 144(k) under the Act or any successor provision thereto.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. The Company shall mail as soon as
practicable a Notice and Questionnaire to the holders of Transfer
Restricted Securities. No Holder may include any of its Transfer
Restricted Securities in any Shelf Registration Statement pursuant to this
Agreement unless and until such Holder furnishes to the Company a Notice
and Questionnaire by the deadline set forth therein, which shall be at
least 28 calendar days from the date on which the Notice and Questionnaire
is first mailed to such Holders. After the Shelf Registration Statement is
declared effective, the Company shall, upon the request of any Holder that
is not then a selling Holder, promptly send a Notice and Questionnaire to
such holder. The Company shall not be required to take any action to name
such holder as a selling Holder in the Shelf Registration Statement or to
enable such holder to use the Prospectus forming a part thereof for resales
of Transfer Restricted Securities until such holder has returned a
completed and signed Notice and Questionnaire to the Company. In addition,
no Holder shall be entitled to liquidated damages pursuant to Section 4
hereof unless and until such Holder shall have provided a completed Notice
and Questionnaire. Each selling Holder agrees to promptly furnish
additional information as reasonably requested by the Company and as
required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION 4. LIQUIDATED DAMAGES
If (i) the Shelf Registration Statement is not filed with the Commission on
or prior to the Filing Deadline, (ii) such Shelf Registration Statement has
not been declared effective by the Commission on or prior to the
Effectiveness Deadline, or (iii) such Shelf Registration Statement required
by this Agreement is filed and declared effective but shall thereafter
cease to be effective or fail to be usable for its intended purpose
(without being succeeded immediately by a post-effective amendment to such
Shelf Registration Statement that is itself declared effective immediately
and available for effecting resales of Transfer Restricted Securities) for
a period of time which shall exceed 60 days in the aggregate during any 12-
month period (each such event referred to in clauses (i) through (iii), a
"Registration Default"), then the Company shall accrue liquidated damages
to each Holder for each week or portion thereof that the Registration
Default continues for the first 90-day period immediately following the
occurrence of such Registration Default, in an amount equal to $.05 per
week per $1,000 principal amount of Notes or, if applicable, in an amount
equal to $.05 per week per the number of shares of Common Stock
constituting Transfer Restricted Securities held by such Holder into which
each $1,000 of principal amount of Notes was converted (subject to
adjustment in the event of stock splits, stock recombinations, stock
dividends and the like). The rate of accrual of the liquidated damages
will increase by an additional $.05 per week per $1,000 principal amount of
Notes or, if applicable, in an amount equal to $.05 per week per the number
of shares of Common Stock constituting Transfer Restricted Securities into
which each $1,000 of principal amount of Notes was converted (subject to
adjustment as set forth above) for each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of liquidated
damages of $.50 per week per $1,000 principal amount of Notes or, if
applicable, an amount equal to $.50 per week per the number of shares of
Common Stock constituting Transfer Restricted Securities into which each
$1,000 of principal amount of Notes was converted (subject to adjustment as
set forth above); provided that the Company shall in no event be required
to pay liquidated damages for more than one Registration Default at any
given time. Notwithstanding anything to the contrary set forth herein, (1)
upon filing of the Shelf Registration Statement, in the case of (i) above,
(2) upon the effectiveness of this Shelf Registration Statement, in the
case of (ii) above, or (3) upon the filing of a post-effective amendment or
supplement to the Shelf Registration Statement that causes the Shelf
Registration Statement to again be declared effective or made usable, in
the case of (iii) above, the liquidated damages payable with respect to the
Transfer Restricted Securities as a result of such clause (i), (ii), or
(iii), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the
Indenture, on semiannual payment dates that correspond to interest payment
dates for the Notes. All obligations of the Company set forth in the
preceding paragraph that are outstanding with respect to any Transfer
Restricted Security at the time such Notes and/or shares of Common Stock
cease to be Transfer Restricted Securities shall survive until such time as
all such obligations with respect to such Notes and/or shares of Common
Stock shall have been satisfied in full.
SECTION 5. REGISTRATION PROCEDURES
(a) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 5(b) below and shall use its reasonable best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution
thereof (as indicated in the information furnished to the Company pursuant
to Section 3(b) hereof), and pursuant thereto the Company will prepare and
file with the Commission a Shelf Registration Statement relating to the
registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities in accordance
with the intended method or methods of distribution thereof (including,
without limitation, one or more underwritten offerings) within the time
periods and otherwise in accordance with the provisions hereof. The
Company shall not be permitted to include in the Shelf Registration
Statement any securities other than the Transfer Restricted Securities.
(b) General Provisions. In connection with any Shelf Registration
Statement and any related Prospectus required by this Agreement, the
Company shall:
(i) use its reasonable best efforts to keep such Shelf Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 of this Agreement. Upon
the occurrence of any event that would cause any such Shelf Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for resale
of Transfer Restricted Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to such
Shelf Registration Statement curing such defect, and, if Commission review
is required, use its reasonable best efforts to cause such amendment to be
declared effective as soon as practicable.
(ii) prepare and file with the Commission such amendments and post-
effective amendments to the Shelf Registration Statement as may be
necessary to keep such Shelf Registration Statement effective for the
applicable period set forth in Section 3 hereof, cause, subject to Section
5(d) hereof, the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under
the Act, and to comply fully with Rules 424, 430A and 462, as applicable,
under the Act in a timely manner; and comply with the provisions of the Act
with respect to the disposition of all Transfer Restricted Securities
covered by such Shelf Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Shelf Registration Statement or
supplement to the Prospectus;
(iii) advise the selling Holders or their Special Counsel and
underwriters, if any, promptly and, if requested by such Persons, confirm
such advice in writing, (A) when the Prospectus or any Prospectus
supplement relating to such selling Holders or post-effective amendment has
been filed, and, with respect to any Shelf Registration Statement or any
post-effective amendment thereto, when the same has become effective, (B)
of any request by the Commission for amendments to the Shelf Registration
Statement or amendments or supplements relating to such selling Holders to
the Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Shelf Registration Statement under the Act or of the suspension by
any state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Shelf Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Shelf Registration Statement in order to
make the statements therein not misleading, or that requires the making of
any additions to or changes in the Prospectus in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Shelf Registration Statement, or
any state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption from qualification of
the Transfer Restricted Securities under state securities or Blue Sky laws,
the Company shall use its reasonable best efforts to obtain the withdrawal
or lifting of such order at the earliest possible time;
(iv) subject to Section 5(b)(i), if any fact or event contemplated by
Section 5(b)(iii)(D) above shall exist or have occurred, prepare a
supplement or post-effective amendment to the Shelf Registration Statement
or related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to the Initial Purchasers, each selling Holder named in
any Shelf Registration Statement or Prospectus or Special Counsel to such
selling Holders and underwriters, if any, in connection with such sale
before filing with the Commission, copies of any Shelf Registration
Statement or any Prospectus included therein or any amendments or
supplements to any such Shelf Registration Statement or Prospectus, which
documents will be subject to the review and comment of such Persons in
connection with such sale, if any, for a period of at least two Business
Days, and the Company will not file any such Shelf Registration Statement
or Prospectus or any amendment or supplement to any such Shelf Registration
Statement or Prospectus to which such Persons shall reasonably object
within two Business Days after the receipt thereof;
(vi) make available at reasonable times for inspection by a
representative of the selling Holders and underwriters, if any, and any
attorney or accountant retained by such selling Holders, or underwriters,
if any, all relevant financial and other records and pertinent corporate
documents of the Company and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such
selling Holder, underwriters, if any, attorney or accountant in connection
with such Shelf Registration Statement or any post-effective amendment
thereto subsequent to the filing thereof and prior to its effectiveness, in
each case as is customary for similar due diligence investigations;
provided, however, that any information that is designated in writing by
the Company, in good faith, as confidential at the time of delivery of such
information shall be kept confidential by such selling Holders or any such
underwriter, attorney, accountant or agent, unless such disclosure is made
in connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a third
party without an accompanying obligation of confidentiality; and provided
further that the foregoing inspection and information gathering shall, to
the greatest extent possible, be coordinated on behalf of the selling
Holders and the other parties entitled thereto by one counsel designated by
and on behalf of such selling Holders and other parties reasonably
acceptable to the Company.
(vii) if requested by the Initial Purchasers or underwriters, if any,
in connection with such sale, promptly include in any Shelf Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders or
underwriters, if any, may reasonably request to have included therein,
including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities; and make all required
filings of such Prospectus supplement or post-effective amendment as soon
as practicable after the Company is notified of the matters to be included
in such Prospectus supplement or post-effective amendment provided that the
Company shall not be required to take any actions under this clause that
are not, in the opinion of its counsel, in compliance with applicable law;
(viii) furnish to each selling Holder and each underwriter, if any,
without charge, at least one copy of the Shelf Registration Statement, as
first filed with the Commission, and of each amendment thereto, and upon
reasonable request of such selling Holder or underwriter, all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix) deliver to each selling Holder and each underwriter, if any,
without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; the Company hereby consents to the use (in
accordance with law) of the Prospectus and any amendment or supplement
thereto by each selling Holder and each underwriter, if any, in connection
with the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto;
(x) subject to Section 9, upon the request of any selling Holder or
underwriter, if any, enter into such agreements (including underwriting
agreements) and make such representations and warranties and take all such
other actions in connection therewith in each case as is customary in
underwritten public offerings in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to any Shelf
Registration Statement contemplated by this Agreement as may be reasonably
requested by such Person in connection with any sale or resale pursuant to
any applicable Shelf Registration Statement and in such connection, the
Company shall:
(A) upon request of any selling Holder or underwriter, if any,
furnish (or in the case of paragraphs (2) and (3) below, use its reasonable
best efforts to cause to be furnished) to each selling Holder or
underwriter, if any, upon the effectiveness of the Shelf Registration
Statement:
(1) a certificate, dated such date, signed on behalf of the
Company by (x) the President or any Senior Vice President and (y) a
principal financial or accounting officer of the Company, confirming, as of
the date thereof, the matters set forth in paragraphs (a) through (d) of
Section 9 of the Purchase Agreement and such other similar matters as the
selling Holders may reasonably request;
(2) an opinion, dated the date effectiveness of the Shelf
Registration Statement, of counsel for the Company covering matters similar
to those set forth in Section 9(e) of the Purchase Agreement and such other
matters as the selling Holders may reasonably request, and in any event
including a statement to the effect that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, and
have considered the matters required to be stated therein and the
statements contained therein, although such counsel has not independently
verified the accuracy, completeness or fairness of such statements; and
that such counsel advises that, on the basis of the foregoing (relying as
to materiality to the extent such counsel deems appropriate upon the
statements of officers and other representatives of the Company), no facts
came to such counsel's attention that caused such counsel to believe that
the Shelf Registration Statement, at the time such Shelf Registration
Statement or any post-effective amendment thereto became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus contained in such
Shelf Registration Statement, as of its date, contained an untrue statement
of a material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Without limiting the foregoing, such
counsel may state further that such counsel assumes no responsibility for,
and has not independently verified, the accuracy, completeness or fairness
of the financial statements, notes and schedules and other financial data
included in any Registration Statement contemplated by this Agreement or
the related Prospectus; and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement from the Company's
independent accountants, in the customary form and covering matters of the
type customarily covered in comfort letters to underwriters in connection
with underwritten offerings, and affirming the matters set forth in the
comfort letters delivered pursuant to Section 9(g) of the Purchase
Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders and underwriters, if any, to
evidence compliance with clause (A) above and with any customary conditions
contained in any agreement entered into by the Company pursuant to this
clause (xi);
(xi) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, underwriters, if any, and their
respective counsel in connection with the registration and qualification of
the Transfer Restricted Securities under the securities or Blue Sky laws of
such jurisdictions as such Persons may request and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; provided, however, that the Company
shall not be required to register or qualify as a foreign corporation where
it is not now so qualified or to take any action that would subject it to
the service of process in suits or to taxation in any jurisdiction where it
is not now so subject;
(xii) in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the selling Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and to
register such Transfer Restricted Securities in such denominations and such
names as the selling Holders may request at least two Business Days prior
to such sale of Transfer Restricted Securities;
(xiii) (i) list all Shares of Common Stock covered by such Shelf
Registration Statement on any securities exchange on which the Common Stock
is then listed or (ii) authorize for quotation on the National Association
of Securities Dealers Automated Quotation System ("NASDAQ") or the National
Market System of NASDAQ all Shares of Common Stock covered by such Shelf
Registration Statement if the Common Stock is then so authorized for
quotation.
(xiv) use its reasonable best efforts to cause the disposition of the
Transfer Restricted Securities covered by the Shelf Registration Statement
to be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Transfer Restricted Securities, subject
to the proviso contained in clause (xii) above;
(xv) provide a CUSIP number for all Transfer Restricted Securities not
later than the effective date of a Shelf Registration Statement covering
such Transfer Restricted Securities and provide the Trustee under the
Indenture with printed certificates for the Transfer Restricted Securities
which are in a form eligible for deposit with the Depository Trust Company;
(xvi) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in paragraph (c) of Rule
158 under the Act);
(xvii) cause the Indenture to be qualified under the TIA not later than
the effective date of the Shelf Registration Statement required by this
Agreement and, in connection therewith, cooperate with the Trustee and the
Holders to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA; and
execute and use its reasonable best efforts to cause the Trustee to
execute, all documents that may be required to effect such changes and all
other forms and documents required to be filed with the Commission to
enable such Indenture to be so qualified in a timely manner; and
(xviii) provide promptly to each Holder upon request each document filed
with the Commission pursuant to the requirements of Section 13 or Section
15(d) of the Exchange Act.
(d) Restrictions on Holders. Notwithstanding anything to the contrary in
this Section 5, but subject to compliance with Section 4, the Company may,
by delivering written notice to the Holders, prohibit offers and sales of
Transfer Restricted Securities pursuant to the Shelf Registration Statement
at any time if (A) (i) the Company is in possession of material non-public
information relating to the Company, (ii) the Company determines (based on
advice of counsel) that such prohibition is necessary to avoid a
requirement to disclose such material non-public information to the public
and (iii) the Company determines in good faith that public disclosure of
such material non-public information would not be in the best interests of
its stockholders or (B) (i) the Company has made a public announcement
relating to an acquisition or business combination transaction including
the Company and/or one or more of its subsidiaries that is material to the
Company and its subsidiaries taken as a whole and (ii) the Company
determines in good faith that (x) offers and sales of Transfer Restricted
Securities pursuant to the Shelf Registration Statement prior to the
consummation of such transaction (or such earlier date as the Company shall
determine) is not in the best interests of the Company and its stockholders
or (y) it would be impracticable at the time to obtain any financial
statements relating to such acquisition or business combination transaction
that would be required to be set forth in the Shelf Registration Statement;
provided, however, that upon (i) the public disclosure by the Company of
the material non-public information described in clause (A) of this
paragraph or (ii) the consummation, abandonment or termination of, or the
availability of the required financial statements with respect to a
transaction described in clause (B) of this paragraph, the suspension of
the use of the Shelf Registration Statement pursuant to this Section 5(d)
shall cease and the Company shall promptly comply with Section 5(c) hereof
and notify the Holders that dispositions of Transfer Restricted Securities
may be resumed.
SECTION 6. REGISTRATION EXPENSES
(a) Except as set forth in Section 9 all expenses incident to the
Company's performance of or compliance with this Agreement will be borne by
the Company, regardless of whether a Shelf Registration Statement required
by this Agreement becomes effective, including without limitation: (i) all
registration and filing fees and expenses; (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or securities laws;
(iii) all expenses of printing (including printing certificates for the
Common Stock to be issued upon conversion of the Notes and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees
and disbursements of counsel for the Company and the Holders of Transfer
Restricted Securities (subject to clause (b) below); (v) all application
and filing fees in connection with listing the Common Stock on a national
securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company (including the expenses of any
special audit and comfort letters required by or incident to such
performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit
and the fees and expenses of any Person, including special experts,
retained by the Company.
(b) In connection with any Shelf Registration Statement required by this
Agreement, the Company will reimburse the Initial Purchasers and the
Holders selling Transfer Restricted Securities pursuant to the "Plan of
Distribution" contained in the Shelf Registration Statement, for the
reasonable fees and disbursements of not more than one counsel, who shall
be Hale and Dorr LLP, unless another firm shall be chosen by the Holders of
a majority in principal amount (and number of shares, if applicable) of the
Transfer Restricted Securities for whose benefit such Shelf Registration
Statement is being prepared.
SECTION 7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder, its
directors, its officers and each Person, if any, who controls such Holder
(within the meaning of Section 15 of the Act and Section 20 of the Exchange
Act)(each such person being sometimes referred to herein as an "Indemnified
Holder"), from and against any and all losses, claims, damages,
liabilities, judgments, (including without limitation, any reasonable legal
or other expenses incurred in connection with investigating or defending
any matter, including any action that could give rise to any such losses,
claims, damages, liabilities or judgments) caused by any untrue statement
or alleged untrue statement of a material fact contained in any Shelf
Registration Statement, preliminary Prospectus or Prospectus (or any
amendment or supplement thereto) provided by the Company to any holder or
any prospective purchaser of registered Notes or registered shares of
Common Stock or caused by any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by an untrue statement or
omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the
Company by any of the Holders, provided, however, that the indemnification
contained in this paragraph (a) with respect to the preliminary Prospectus
shall not inure to the benefit of any Indemnified Holder (or to the benefit
of any person controlling such Indemnified Holder) on account of any such
loss, claim, damage, judgment, liability or expense arising from the sale
of the Notes or registered shares of Common Stock by such Indemnified
Holder to any person if the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in the
preliminary Prospectus was corrected in the Prospectus and, due to the
wrongful actions or wrongful inaction of the Indemnified Holder, the
Indemnified Holder did not send or give in a timely manner, a copy of the
Prospectus to such person (as then amended or supplemented) if the Company
has previously furnished sufficient copies thereof to the Indemnified
Holder on a timely basis.
(b) Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company and its directors and officers, and each person, if
any, who controls (within the meaning of Section 15 of the Act or Section
20 of the Exchange Act) the Company, to the same extent as the foregoing
indemnity from the Company to each of the Indemnified Holders, but only
with reference to information relating to such Indemnified Holder furnished
in writing to the Company by such Indemnified Holder expressly for use in
any Registration Statement (or any amendment thereto) or Prospectus (or any
supplement thereto). In no event shall any Indemnified Holder be liable or
responsible for any amount in excess of the amount by which the total
amount received by such Indemnified Holder with respect to its sale of
Transfer Restricted Securities pursuant to a Shelf Registration Statement
exceeds (i) the amount paid by such Indemnified Holder for such Transfer
Restricted Securities and (ii) the amount of any damages that such
Indemnified Holder has otherwise been required to pay to the Company
pursuant to this Section 7(b) by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying
person") in writing and the indemnifying party shall assume the defense of
such action, including the employment of counsel reasonably satisfactory to
the indemnified party and the payment of all reasonable fees and expenses
of such counsel, as incurred (except that in the case of any action in
respect of which indemnity may be sought pursuant to both Sections 7(a) and
7(b), an Indemnified Holder shall not be required to assume the defense of
such action pursuant to this Section 7(c), but may employ separate counsel
and participate in the defense thereof, but the fees and expenses of such
counsel, except as provided below, shall be at the expense of the
Indemnified Holder). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of the
indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action
or employ counsel reasonably satisfactory to the indemnified party or (iii)
the named parties to any such action (including any impleaded parties)
include both the indemnified party and the indemnifying party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them (in which case
the indemnifying party shall not have the right to assume the defense of
such action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or separate
but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred.
Such firm shall be designated in writing by a majority of the Indemnified
Holders, in the case of the parties indemnified pursuant to Section 7(a),
and by the Company, in the case of parties indemnified pursuant to Section
7(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written
consent if the settlement is entered into more than twenty business days
after the indemnifying party shall have received a request from the
indemnified party for reimbursement for the reasonable fees and expenses
of counsel (in any case where such fees and expenses are at the expense of
the indemnifying party) and, prior to the date of such settlement, the
indemnifying party shall have failed to comply with such reimbursement
request. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could
have been a party and indemnity or contribution may be or could have been
sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability on claims that are or could have been
the subject matter of such action and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act, by or on
behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this Section 7
is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or judgments (i) in
such proportion as is appropriate to reflect the relative benefits received
by the Company, on the one hand, and the Holders, on the other hand, from
their sale of Transfer Restricted Securities or (ii) if the allocation
provided by clause 7(d)(i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause 7(d)(i) above but also the relative fault of the
Company on the one hand, and of the Indemnified Holder, on the other hand,
in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative fault of the Company, on
the one hand, and of the Indemnified Holder, on the other hand, shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or by the Indemnified Holder, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and judgments referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section
7(a), any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any action or claim.
The Company and each Holder and underwriter, if any, agree that it would
not be just and equitable if contribution pursuant to this Section 7(d)
were determined by pro rata allocation (even if the Holders and
underwriter, if any, were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any matter,
including any action that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 7, no Holder or its related Indemnified Holders shall be required
to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of its
Transfer Restricted Securities pursuant to a Registration Statement exceeds
the sum of (A) the amount paid by such Holder for such Transfer Restricted
Securities plus (B) the amount of any damages which such Holder has
otherwise been required to pay to the Company pursuant to this Section 7 by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Holders' obligations to contribute pursuant to this Section 8(c) are
several in proportion to the respective principal amount of Transfer
Restricted Securities held by each of the Holders hereunder and not joint.
SECTION 8. RULE 144 and RULE 144A
The Company agrees with each Holder, for so long as any Transfer Restricted
Securities remain outstanding and during any period in which the Company
(i) is not subject to Section 13 or 15(d) of the Exchange Act, to make
available, upon request of any Holder, to any Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144(d)(4)
under the Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A, and (ii) is subject to Section 13 or
15(d) of the Exchange Act, to make all filings required thereby in a timely
manner in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144.
SECTION 9. UNDERWRITTEN REGISTRATIONS
(a) If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
principal amount (and number of shares, if applicable) of such Transfer
Restricted Securities included in such offering, subject to the consent of
the Company (which will not be unreasonably withheld or delayed).
Notwithstanding anything herein to the contrary, the Company shall not be
obligated to arrange for more than one underwritten offering during the
term hereof. No Holder may participate in any underwritten registration
hereunder unless such Holder (i) agrees to sell its Transfer Restricted
Securities on the basis reasonably provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements, (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements and (iii) at least 25% of
the outstanding Transfer Restricted Securities are included in such
underwritten offering.
(b) Each Holder agrees, if requested (pursuant to a timely written
notice) by the managing underwriters in an underwritten offering made
pursuant to a Shelf Registration Statement, not to effect any private sale
or distribution (including a sale pursuant to Rule 144(k) and Rule 144A,
but excluding non-public sales to any of its affiliates, officers,
directors, employees and controlling persons) of any of the Notes, in the
case of an underwritten offering of the Notes, or the Common Stock, in the
case of an underwritten offering of shares of Common Stock constituting
Transfer Restricted Securities, during the period beginning 10 days prior
to, and ending 90 days after, the closing date of such underwritten
offering.
The foregoing provisions of Section 9(b) shall not apply to any Holder if
such Holder is prevented by applicable statute or regulation from entering
into any such agreement.
(c) If any of the Transfer Restricted Securities covered by any Shelf
Registration are to be sold in an underwritten offering, the underwriters,
their controlling persons and their respective officers, directors,
employees, representatives and agents, shall be entitled to indemnity
(substantially similar to the indemnity set forth in Section 7 of the
Agreement) from the Company and the Holders, which indemnity may be set
forth in an underwriting agreement.
(d) The selling Holders participating in any underwritten offering shall
be responsible for any expenses customarily borne by selling
securityholders, including underwriting discounts and commissions and fees
and expenses of counsel to the selling securityholders and shall reimburse
the Company for the fees and disbursements of its counsel, its independent
public accountants and any printing expenses incurred in connection with
such underwritten offerings.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under Section 3 hereof may
result in material irreparable injury to the Initial Purchasers or the
Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the
event of any such failure, the Initial Purchasers or any Holder may obtain
such relief as may be required to specifically enforce the Company's
obligations under Section 3 hereof. The Company further agrees to waive
the defense in any action for specific performance that a remedy at law
would be adequate.
(b) No Conflicting Agreements. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its
securities that is adverse to the rights granted to the Holders in this
Agreement or otherwise materially conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with
the rights granted to the holders of the Company's securities under any
agreement in effect on the date hereof.
(c) No Piggybacks on Shelf Registration Statement. The Company shall not
grant to any of its security holders (other than the holders of Transfer
Restricted Securities in such capacity) the right to include any of its
securities in any Shelf Registration Statement provided for in this
Agreement other than the Transfer Restricted Securities.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of
Section 4 hereof and this Section 10(d)(i), the Company has obtained the
written consent of Holders of all outstanding Transfer Restricted
Securities and (ii) in the case of all other provisions hereof, the Company
has obtained the written consent of Holders of a majority of the
outstanding principal amount (and shares, if applicable) of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates).
(e) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Initial Purchasers, on the other hand, and shall have the
right to enforce such agreements directly to the extent they may deem such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(f) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex,
telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company:
Oak Industries Inc.
1000 Winter Street
Waltham, MA 02154
Telecopier No.: (781) 890-6116
Attention: General Counsel
With a copy to:
Ropes and Gray
One International Place
Boston, MA 02110
Telecopier No.: 617-951-7050
Attention: David C. Chapin, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt acknowledged, if telecopied; and on the next business
day, if timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(g) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
that nothing herein shall be deemed to permit any assignment, transfer or
other disposition of Transfer Restricted Securities in violation of the
terms hereof or of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Transfer Restricted Securities in
any manner, whether by operation of law or otherwise, such Transfer
Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities
such Person shall be conclusively deemed to have agreed to be bound by and
to perform all of the terms and provisions of this Agreement, including the
restrictions on resale set forth in this Agreement and, if applicable, the
Purchase Agreement, and such Person shall be entitled to receive the
benefits hereof.
(h) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(k) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(l) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the registration rights granted
with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
OAK INDUSTRIES INC.
By:
-----------------------------
Name:
Title:
DONALDSON, LUFKIN and JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS INC.
COWEN and COMPANY
By: DONALDSON, LUFKIN and JENRETTE
SECURITIES CORPORATION
By:
--------------------------------
Name:
Title:
19
Exhibit 5.1
April 14, 1998
Oak Industries Inc.
1000 Winter Street
Waltham, Massachusetts 02154
Ladies and Gentlemen:
This opinion is rendered to you in connection with a registration statement
(the "Registration Statement") on Form S-3 filed today with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, for
the registration of $100,000,000 principal amount of 4_% Convertible
Subordinated Notes due 2008 (the "Notes") of Oak Industries Inc. ("Oak")
and 2,586,900 shares of Common Stock of Oak issuable upon conversion of the
Notes plus such additional indeterminate number of shares of Common Stock
of Oak as may become issuable upon conversion of the Notes by means of an
adjustment in the conversion price (the "Shares"). Oak originally sold the
Notes pursuant to a Purchase Agreement dated February 20, 1998 between Oak
and Donaldson, Lufkin and Jenrette Securities Corporation, Lehman
Brothers and Cowen and Company. The Notes were issued pursuant to the
provisions of an Indenture dated as of February 25, 1998 (the "Indenture")
between Oak and State Street Bank and Trust Company, as Trustee. The Notes
and the Shares are being registered to permit public secondary trading of
such securities by the holders thereof from time to time after the
effective date of the Registration Statement.
We have acted as special counsel for Oak in connection with the issuance
and sale of the Notes and the preparation of the Registration Statement.
For purposes of this opinion, we have examined and relied upon the
information set forth in the Registration Statement and such other
documents and records as we have deemed necessary.
We have assumed that no issuance of the Shares will result in the issuance
by Oak of shares in excess of its then authorized Common Stock and that the
price received by Oak for the Shares will not be less than the par value
thereof.
Based on the foregoing, we are of the opinion that:
1. The Notes are valid and legally binding obligations of Oak and are
entitled to the benefits of the Indenture, except that enforcement of
rights and remedies created by the Notes is subject to bankruptcy,
reorganization, insolvency or similar laws of general application affecting
the rights and remedies of creditors and that the availability of the
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be
brought.
2. The Shares have been duly authorized and reserved for issuance upon
conversion of the Notes, and when issued upon such conversion in accordance
with the terms of the Notes, will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as part of the Registration
Statement and to the use of our name therein and in the related prospectus
under the caption "Legal Matters".
It is understood that this opinion is to be used only in connection with
the offer and sale of the Notes while the Registration Statement is in
effect.
Very truly yours,
/s/ Ropes and Gray
Ropes and Gray
Exhibit 12.1
Computation of
Ratio of Earnings to Fixed Charges
(in thousands)
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
-------------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income (loss) from continuing
operations before taxes,
minority interest and
extraordinary charges $25,246 $41,840 $(30,926) $62,012 $36,685
Fixed charges:
Interest expense (a) 6,973 5,906 6,273 5,767 10,973
Portion of rental expense
representative of interest
factor (b) 952 1,068 1,276 1,534 1,323
----- ------- ------ ------ ------
Income (loss) from continuing
operations before taxes,
minority interest,
extraordinary charges
and fixed charges $33,171 $48,814 $(23,377) $69,313 $48,981
======= ======= ========= ======= =======
Fixed charges:
Interest expense (a) 6,973 5,906 6,273 5,767 10,973
Portion of rental expense
representative of interest
factor (b) 952 1,068 1,276 1,534 1,323
Total fixed charges $ 7,925 $ 6,974 $ 7,549 $ 7,301 $12,296
======= ======= ======== ======= =======
Ratio of Earnings to Fixed
Charges 4.19x 7.00x ---(c) 9.49x 3.98x
<FN>
(a) Interest expense includes amortization of original issue discount and
issue costs related to outstanding long-term debt.
(b) Management deems that one-third of all rental expense is a reasonable
approximation of the interest factor in rental expense.
(c) Income (loss) before income taxes, extraordinary items, and fixed
charges as computed above were inadequate to cover fixed charges. The
amount of coverage deficiency was $30.9 million for the year ended December
31, 1995.
</TABLE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated January 21, 1998 appearing on page 20 of Oak Industries Inc.'s Annual
Report on Form l0-K for the year ended December 31, 1997. We also consent
to the reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Boston, Massachusetts
April 14, 1998
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints William S. Antle III,
Coleman S. Hicks, Pamela F. Lenehan, Paul A. LeBlanc and Mela Lew, and each
of them, with full power to act without the other, her true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for her and in her name, place and stead in any and all
capacities (until revoked in writing) to execute and file a Registration
Statement on Form S-3 of Oak Industries Inc. (the "Company") in connection
with the offering by the Company of its subordinated notes convertible into
shares of Common Stock of the Company, and to file the same, with all
exhibits thereto and other documents in connection therewith, including
pre- and post-effective amendments, with the Securities and Exchange
Commission or any state securities commission or other governmental entity
pertaining to such registration and sale, granted unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary fully to all
intents and purposes as she might or could do in person thereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them,
or their, his or her substitute, may lawfully do or cause to be done by
virtue hereof.
EXECUTED as of this 5th day of February, 1998.
/s/ Beth L. Bronner
-------------------
Beth L. Bronner
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints William S. Antle III,
Coleman S. Hicks, Pamela F. Lenehan, Paul A. LeBlanc and Mela Lew, and each
of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead in any and all
capacities (until revoked in writing) to execute and file a Registration
Statement on Form S-3 of Oak Industries Inc. (the "Company") in connection
with the offering by the Company of its subordinated notes convertible into
shares of Common Stock of the Company, and to file the same, with all
exhibits thereto and other documents in connection therewith, including
pre- and post-effective amendments, with the Securities and Exchange
Commission or any state securities commission or other governmental entity
pertaining to such registration and sale, granted unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary fully to all
intents and purposes as he might or could do in person thereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them,
or their, his or her substitute, may lawfully do or cause to be done by
virtue hereof.
EXECUTED as of this 5th day of February, 1998.
/s/ Daniel W. Derbes
--------------------
Daniel W. Derbes
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints William S. Antle III,
Coleman S. Hicks, Pamela F. Lenehan, Paul A. LeBlanc and Mela Lew, and each
of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead in any and all
capacities (until revoked in writing) to execute and file a Registration
Statement on Form S-3 of Oak Industries Inc. (the "Company") in connection
with the offering by the Company of its subordinated notes convertible into
shares of Common Stock of the Company, and to file the same, with all
exhibits thereto and other documents in connection therewith, including
pre- and post-effective amendments, with the Securities and Exchange
Commission or any state securities commission or other governmental entity
pertaining to such registration and sale, granted unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary fully to all
intents and purposes as he might or could do in person thereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them,
or their, his or her substitute, may lawfully do or cause to be done by
virtue hereof.
EXECUTED as of this 5th day of February, 1998.
/s/ Roderick M. Hills
---------------------
Roderick M. Hills
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints William S. Antle III,
Coleman S. Hicks, Pamela F. Lenehan, Paul A. LeBlanc and Mela Lew, and each
of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead in any and all
capacities (until revoked in writing) to execute and file a Registration
Statement on Form S-3 of Oak Industries Inc. (the "Company") in connection
with the offering by the Company of its subordinated notes convertible into
shares of Common Stock of the Company, and to file the same, with all
exhibits thereto and other documents in connection therewith, including
pre- and post-effective amendments, with the Securities and Exchange
Commission or any state securities commission or other governmental entity
pertaining to such registration and sale, granted unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary fully to all
intents and purposes as he might or could do in person thereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them,
or their, his or her substitute, may lawfully do or cause to be done by
virtue hereof.
EXECUTED as of this 5th day of February, 1998.
/s/ George W. Leisz
-------------------
George W. Leisz
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints William S. Antle III,
Coleman S. Hicks, Pamela F. Lenehan, Paul A. LeBlanc and Mela Lew, and each
of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead in any and all
capacities (until revoked in writing) to execute and file a Registration
Statement on Form S-3 of Oak Industries Inc. (the "Company") in connection
with the offering by the Company of its subordinated notes convertible into
shares of Common Stock of the Company, and to file the same, with all
exhibits thereto and other documents in connection therewith, including
pre- and post-effective amendments, with the Securities and Exchange
Commission or any state securities commission or other governmental entity
pertaining to such registration and sale, granted unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary fully to all
intents and purposes as he might or could do in person thereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them,
or their, his or her substitute, may lawfully do or cause to be done by
virtue hereof.
EXECUTED as of this 5th day of February, 1998.
/s/ Gilbert E. Matthews
-----------------------
Gilbert E. Matthews
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints William S. Antle III,
Coleman S. Hicks, Pamela F. Lenehan, Paul A. LeBlanc and Mela Lew, and each
of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead in any and all
capacities (until revoked in writing) to execute and file a Registration
Statement on Form S-3 of Oak Industries Inc. (the "Company") in connection
with the offering by the Company of its subordinated notes convertible into
shares of Common Stock of the Company, and to file the same, with all
exhibits thereto and other documents in connection therewith, including
pre- and post-effective amendments, with the Securities and Exchange
Commission or any state securities commission or other governmental entity
pertaining to such registration and sale, granted unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary fully to all
intents and purposes as he might or could do in person thereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them,
or their, his or her substitute, may lawfully do or cause to be done by
virtue hereof.
EXECUTED as of this 5th day of February, 1998.
/s/ Christopher H.B. Mills
--------------------------
Christopher H.B. Mills
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints William S. Antle III,
Coleman S. Hicks, Pamela F. Lenehan, Paul A. LeBlanc and Mela Lew, and each
of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead in any and all
capacities (until revoked in writing) to execute and file a Registration
Statement on Form S-3 of Oak Industries Inc. (the "Company") in connection
with the offering by the Company of its subordinated notes convertible into
shares of Common Stock of the Company, and to file the same, with all
exhibits thereto and other documents in connection therewith, including
pre- and post-effective amendments, with the Securities and Exchange
Commission or any state securities commission or other governmental entity
pertaining to such registration and sale, granted unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary fully to all
intents and purposes as he might or could do in person thereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them,
or their, his or her substitute, may lawfully do or cause to be done by
virtue hereof.
EXECUTED as of this 6th day of February, 1998.
/s/ Elliot L. Richardson
------------------------
Elliot L. Richardson
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
OAK INDUSTRIES INC.
(Exact name of obligor as specified in its charter)
DELAWARE 36-1569000
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 WINTER STREET
WALTHAM, MA 02154
(Address of principal executive offices) (Zip Code)
4 7/8% CONVERTIBLE SUBORDINATED NOTES DUE 2008
(Title of indenture securities)
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to which
it is subject.
Department of Banking and Insurance of The Commonwealth of Massachusetts,
100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington, D.C., Federal
Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its parent, State
Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in effect.
A copy of the Articles of Association of the trustee, as now in effect, is
on file with the Securities and Exchange Commission as Exhibit 1 to
Amendment No. 1 to the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of Massachusetts that
no certificate of authority for the trustee to commence business was
necessary or issued is on file with the Securities and Exchange Commission
as Exhibit 2 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration Statement
of Morse Shoe, Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.
3. A copy of the authorization of the trustee to exercise corporate trust
powers, if such authorization is not contained in the documents specified
in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise corporate trust
powers is on file with the Securities and Exchange Commission as Exhibit 3
to Amendment No. 1 to the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on file with the
Securities and Exchange Commission as Exhibit 4 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File No. 33-37823) and is
incorporated herein by reference thereto.
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the Act is annexed
hereto as Exhibit 6 and made a part hereof.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
A copy of the latest report of condition of the trustee published pursuant
to law or the requirements of its supervising or examining authority is
annexed hereto as Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter
for the obligor, the trustee has relied upon information furnished to it by
the obligor and the underwriters, and the trustee disclaims responsibility
for the accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which
would have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and
The Commonwealth of Massachusetts, on the 14th day of April, 1998.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Robert J. Dunn
------------------
Robert J. Dunn
Vice President
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended, in connection with the proposed issuance by Oak
Industries Inc. of its 4 7/8% Convertible Subordinated Notes, we hereby
consent that reports of examination by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities
and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Robert J. Dunn
-------------------
Robert J. Dunn
Vice President
Dated: April 14, 1998
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business December 31, 1997, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner
of Banks under General Laws, Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin 2,220,829
Interest-bearing balances 10,076,045
Securities 10,373,821
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary 5,124,310
Loans and lease financing receivables:
Loans and leases, net of unearned income 6,270,348
Allowance for loan and lease losses 82,820
Allocated transfer risk reserve 0
Loans and leases, net of unearned income and allowances 6,187,528
Assets held in trading accounts 1,241,555
Premises and fixed assets 410,029
Other real estate owned 100
Investments in unconsolidated subsidiaries 38,831
Customers' liability to this bank on acceptances outstanding 44,962
Intangible assets 224,049
Other assets 1,507,650
---------
Total assets 37,449,709
==========
LIABILITIES
Deposits:
In domestic offices 10,115,205
Noninterest-bearing 7,739,136
Interest-bearing 2,376,069
In foreign offices and Edge subsidiary 14,791,134
Noninterest-bearing 71,889
Interest-bearing 14,719,245
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary 7,603,920
Demand notes issued to the U.S.
Treasury and Trading Liabilities 194,059
Trading liabilities 1,036,905
Other borrowed money 459,252
Subordinated notes and debentures 0
Bank's liability on acceptances executed and outstanding 44,962
Other liabilities 972,782
Total liabilities 35,218,219
==========
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock 29,931
Surplus 444,620
Undivided profits and capital reserves/Net unrealized
holding gains (losses) 1,763,076
Cumulative foreign currency translation adjustments (6,137)
Total equity capital 2,231,490
----------
Total liabilities and equity capital 37,449,709
==========
</TABLE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above
named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of
our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
