<PAGE>
<PAGE>
<PAGE> 1
As filed with the Securities and Exchange Commission on August 17, 1994
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE PEP BOYS - MANNY, MOE & JACK
(Exact name of registrant as specified in its charter)
Pennsylvania 23-0962915
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
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3111 West Allegheny Avenue
Philadelphia, Pennsylvania 19132
(215) 229-9000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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Mitchell G. Leibovitz
Chairman of the Board,
President and Chief Executive Officer
3111 West Allegheny Avenue
Philadelphia, Pennsylvania 19132
(215) 229-9000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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with copies to:
Daniel D. Rubino, Esq. Morton A. Pierce, Esq.
Willkie Farr & Gallagher Dewey Ballantine
One Citicorp Center 1301 Avenue of the Americas
153 East 53rd Street New York, New York 10019
New York, New York 10022 (212) 259-8000
(212) 821-8000
(Counsel for Registrant) (Counsel for Underwriter)
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Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or reinvestment plans, check the following box. / /
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================================
Proposed
Proposed Maximum Maximum Amount of
Title of Each Class of Securities Amount to be Offering Price per Aggregate Offering Registration
to be Registered Registered(1) Security(2) Price(2) Fee
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
% Convertible Subordinated Notes due
1999 $86,250,000 100% $86,250,000 $29,742
- ----------------------------------------------------------------------------------------------------------------------
Common Stock, par value $1.00 per
share (including attached Common
Stock Purchase Rights (3)) ......... (4) - - None
======================================================================================================================
</TABLE>
(1) Includes $11,250,000 in principal amount of Notes subject to the
Underwriter's over-allotment option.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Prior to the occurrence of certain events, the Common Stock Purchase
Rights will not be evidenced separately from shares of the Common
Stock. Upon the occurrence of such events, separate Rights
certificates will be issued representing one Right for each share of
Common Stock held.
(4) Represents such indeterminate number of shares of Common Stock as
shall be issuable upon conversion of the Notes.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment that specifically states that this
Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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<PAGE>
<PAGE> 3
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 AUGUST 17, 1994
(Logo)
$75,000,000
The Pep Boys - Manny, Moe & Jack
% Convertible Subordinated Notes Due 1999
Interest payable and Due , 1999
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The Notes are convertible into Common Stock of The Pep Boys - Manny, Moe &
Jack at any time on or before , 1999, unless previously
redeemed, at a conversion price of $ per share, subject to
adjustment in certain events. On August 16, 1994, the
reported last sale price of the Common Stock on the New York Stock
Exchange was $33 1/8 per share.
The Notes are redeemable, in whole or in part, at the option of the
Company at any time on or after , 1997 at the redemption prices
set forth herein plus accrued interest. The Notes are subordinated
to all existing and future Senior Indebtedness (as defined
herein) of the Company. As of July 30, 1994, after giving
effect to the offering of the Notes (the "Offering")
and application of the net proceeds therefrom, Senior Indebtedness of the
Company would have been approximately $327.4 million.
The Notes have been approved for listing on the New York Stock Exchange,
subject to official notice of issuance.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR AD- EQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
<PAGE> 4
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public (1) Commissions Company (1)(2)
----------- -------------- --------------
<S> <C> <C> <C>
Per Note ............................................. % % %
Total (3) ............................................ $ $ $
</TABLE>
(1) Plus accrued interest, if any, from , 1994.
(2) Before deduction of estimated expenses of $250,000 payable by the
Company.
(3) The Company has granted the Underwriter an option, exercisable for 30
days from the date of the initial public offering of the Notes, to
purchase up to an additional $11,250,000 principal amount of Notes
solely to cover over-allotments. If the option is exercised in full,
the total Price to Public will be $ , Underwriting Discounts and
Commissions will be $ and Proceeds to Company will be $ .
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The Notes are offered by the Underwriter when, as and if issued by the
Company, delivered to and accepted by the Underwriter and subject to its
right to reject orders in whole or in part. It is expected that the Notes
will be ready for delivery on or about , 1994.
CS First Boston
The date of this Prospectus is , 1994
<PAGE>
<PAGE> 5
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
NOTES OFFERED HEREBY OR THE COMMON STOCK OF THE COMPANY AT LEVELS ABOVE
THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS
MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER
MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files annual and quarterly reports, proxy statements
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information
concerning the Company may be inspected, and copies of such material may
be obtained at prescribed rates, at the Commission's Public Reference
Section, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, as
well as at the Commission's Regional Offices at Seven World Trade Center,
New York, New York 10048 and Northwestern Atrium Center, 500 West Madison
Street, Room 1400, Chicago, Illinois 60661-2511. The Company's Common
Stock is listed on the New York Stock Exchange (the "NYSE"). Reports,
proxy statements and other information concerning the Company may be
inspected at the offices of the NYSE at 20 Broad Street, New York, New
York 10005.
This Prospectus constitutes part of a Registration Statement on Form
S-3 (the "Registration Statement") filed by the Company with the
Commission under the Securities Act of 1933, as amended (the "Securities
Act"). This Prospectus omits certain of the information contained in the
Registration Statement and the exhibits and schedules thereto, in
accordance with the rules and regulations of the Commission. For further
information concerning the Company and the Notes offered hereby, reference
is made to the Registration Statement and the exhibits and schedules filed
therewith, which may be inspected without charge at the office of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and copies of
which may be obtained from the Commission at prescribed rates. Any
statements contained herein concerning the provisions of any document are
not necessarily complete, and, in each instance, reference is made to the
copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in
its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended January
29, 1994, the Company's Quarterly Report on Form 10-Q for the quarter
ended April 30, 1994, the description of the Company's common stock, par
value $1.00 per share (the "Common Stock"), set forth in the
Registration Statement on Form 8-A filed by the Company to register such
securities under Section 12 of the Exchange Act, and any amendments or
reports filed for the purpose of updating such description, the
description of the Company's Common Stock Purchase Rights set forth in the
Registration Statement on Form 8-A, dated December 21, 1987, as amended by
the Company's Form 8, dated June 30, 1989, and the Company's Current
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<PAGE> 6
Report on Form 8-K, dated May 6, 1994, each as filed with the Commission
pursuant to the Exchange Act, are incorporated into this Prospectus by
reference.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus and prior to the termination of this Offering
shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such reports and documents. Any
statement incorporated herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any 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 this
Prospectus is delivered, upon written or oral request of such person, a
copy of any or all of the foregoing documents incorporated herein by
reference (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such document). Requests for
such documents should be submitted in writing to Mr. Frederick A.
Stampone, Senior Vice President - Chief Administrative Officer and
Secretary, The Pep Boys - Manny, Moe & Jack, 3111 West Allegheny Avenue,
Philadelphia, Pennsylvania 19132, telephone (215) 229-9000.
THE COMPANY
The Pep Boys - Manny, Moe & Jack (together with its subsidiaries, the
"Pep Boys" or the "Company") is a leading automotive aftermarket
retail and service chain. The Company is engaged principally in the retail
sale of automotive parts and accessories, automotive maintenance and
service and the installation of parts. Pep Boys operates its business
through its chain of 395 Pep Boys stores (as of July 30, 1994), of which
279 are owned and 116 are leased. Pep Boys stores are located in 29 states
in predominantly four market areas - the middle Atlantic, southeastern,
western and southwestern regions. Pep Boys' operations are supplied by
distribution facilities in five locations.
The Company operates approximately 8,004,000 gross square feet of
retail space for an average of approximately 20,300 gross square feet per
store, including an aggregate of 3,741 service bays. A typical new Pep
Boys store is a free-standing warehouse format supercenter of
approximately 22,000 square feet. Each new supercenter has approximately
11 service bays along with a product offering of approximately 24,000
stock-keeping units ("SKUs") and is generally located in an area with
high automotive traffic count and population density. Pep Boys believes
that the operation of service bays in its supercenter stores
differentiates it from most of its competitors by providing its customers
with the ability to purchase parts and have them installed at the same
location. Pep Boys intends to introduce a supplemental store format under
the name "Pep Boys - PARTS USA", with approximately 22,000 SKUs, in
locations that the Company believes will be better served by stores with
an extensive selection of parts and accessories but without tires or
service bays. See "Recent Developments."
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<PAGE> 7
During fiscal years 1991, 1992 and 1993, Pep Boys added a net of 24,
20 and 29 stores, respectively. In fiscal 1994, the Company plans to open
approximately 50 new warehouse format supercenters and expects to close
approximately six older stores. In fiscal 1993, the Company's annual gross
revenues increased by more than $85 million to $1.24 billion (a 7%
increase) and net earnings increased by $11 million to $65.5 million
(a 20% increase). See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
Although the Company's competition varies by geographical area, the
Company believes that it generally has a favorable competitive position in
terms of price, depth and breadth of merchandise, quality of personnel and
customer service. The Company believes that it provides customers with
among the lowest prices in each of its markets. Pep Boys employs an
everyday-low-price strategy which it believes provides its customers
better value and consistency on a day-to-day basis and improves inventory
management. In addition, Pep Boys believes that it carries among the
largest selection of parts, accessories and chemicals in the automotive
aftermarket retail industry, with approximately 24,000 SKUs per
supercenter. The Company also believes it provides a high level of
customer service through its well-trained and knowledgeable employees. The
Company's advertising strategy consists primarily of television
advertising and multi-page catalogs, supplemented with radio advertising
and various in-store promotions.
The Company utilizes electronic parts catalogs, enabling employees to
reference and access parts instantly while noting price, related items and
in-stock position. In addition, the Company monitors product sales by SKU
through its point-of-sale system which utilizes bar code slot scanning.
This system enables the Company to monitor its gross margins and set
minimum and maximum inventory levels for each store. The Company's new
centralized buying system and a perpetual inventory-automatic
replenishment system orders additional inventory from one of the Company's
warehouses when a store's inventory on hand falls below the minimum level
set for each SKU.
The Pep Boys - Manny, Moe & Jack, a Pennsylvania corporation, was
incorporated in 1925. The Company's executive offices are located at 3111
West Allegheny Avenue, Philadelphia, Pennsylvania 19132, telephone (215)
229-9000.
RECENT DEVELOPMENTS
For the quarter ended July 30, 1994, the Company's sales increased 13%
to $370.4 million from $329.1 million for the same period in the prior
fiscal year, and the Company's net earnings for the quarter increased 23% to
$23.5 million, or $.39 per share, from $19.1 million, or $.31 per share,
for the same period in the prior fiscal year. For the six months ended
July 30, 1994, the Company's sales increased 13% to $708.1 million from
$628.3 million for the same period in the prior fiscal year, and the
Company's net earnings for the six months before an accounting change
increased 26% to $41.1 million, or $.68 per share, from $32.5 million, or
$.53 per share, for the same period in the prior fiscal year. During
the first quarter of the 1994 fiscal year, the Company adopted the
Financial Accounting Board's SFAS No. 112, "Employers' Accounting for
<PAGE>
<PAGE> 8
Postemployment Benefits." See "Management's Discussion and Analysis of
Financial Condition and Results of Operations." This accounting change
resulted in a charge to earnings for the first quarter of $4.3 million, or
$.07 per share. During the quarter ended July 30, 1994, the Company's
comparable store sales and service revenue increased 5% and 6%,
respectively, and during the six months ended July 30, 1994, the Company's
comparable store sales and service revenue increased 5% and 8%,
respectively. During the quarter ended July 30, 1994, the Company opened
eight new warehouse format supercenters bringing the total for the first
half of the year to ten new supercenters opened.
On August 11, 1994, Pep Boys announced that it will introduce a
supplemental store format under the name "Pep Boys - PARTS USA" in
locations that the Company believes will be better served by stores
with an extensive selection of parts and accessories but without tires or
service bays. These locations will primarily consist of certain urban
areas, smaller markets and areas located between supercenters. It is
expected that PARTS USA stores will stock approximately 22,000 SKUs.
As compared to the supercenters, the Company expects these stores to have
a higher percentage of hard parts and accessories, the highest margin
merchandise categories, in the sales mix. By supplementing its supercenter
expansion with PARTS USA stores, the Company seeks to increase its
market penetration and share over time. Pep Boys plans to open at least
ten PARTS USA stores in 1995. The Company's plans for opening additional
supercenters are not expected to be affected by the supplemental PARTS USA
store format. Pep Boys intends to open 50 supercenters during its 1994
fiscal year and 60 supercenters during its 1995 fiscal year.
USE OF PROCEEDS
The net proceeds from the sale of the Convertible Subordinated Notes
due 1999 (the "Notes") offered hereby are estimated to be $74.0 million
($85.1 million if the Underwriter's over-allotment option is exercised in
full). The proceeds of the Offering will be used to repay portions of the
Company's short-term variable-rate debt, bearing interest at rates which
range from 4.6% to 5.0%. The short-term debt expected to be repaid was
incurred within one year of the date hereof to purchase shares of Common
Stock to be held in the Company's flexible employee benefits trust (the
"Flexitrust") (established on April 29, 1994 to fund a portion of the
Company's obligations arising from various employee compensation and
benefit plans), to finance a portion of the capital expenditures incurred
in connection with the opening of new stores and for working capital
purposes. The short-term debt matures within sixty days of the date of
this Prospectus. See "Capitalization." Pending use of the proceeds of
the Offering, the Company expects to invest such funds in short-term
marketable securities.
CAPITALIZATION
The following table sets forth the capitalization of the Company at
April 30, 1994, and as adjusted to give effect to the sale of the Notes
offered hereby (assuming the over-allotment option is not exercised). See
"Use of Proceeds."
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<TABLE>
<CAPTION>
Actual As Adjusted
-------- -----------
(amounts in thousands)
<S> <C> <C>
Short-term debt(1) .......................................................... $ 94,600 $ 20,600
Current maturities of long-term debt ......................................... 7,317 7,317
Long-term debt less current maturities:
Indebtedness to banks under revolving credit loan agreement(1) ............. $ 55,000 $ 55,000
Mortgage notes ............................................................. 2,059 2,059
8 7/8% Notes ............................................................... 125,000 125,000
9.33% Notes ................................................................ 23,214 23,214
6 5/8% Notes ............................................................... 75,000 75,000
Notes offered hereby........................................................ - 75,000
-------- --------
$280,273 $355,273
Less current maturities ................................................. 7,317 7,317
-------- --------
Total long-term debt ...................................................... $272,956 $347,956
-------- --------
Stockholders' equity:
Common Stock, par value $1.00 per share: Authorized 500,000,000 shares;
61,187,166 shares issued and outstanding ................................. 61,187 61,187
Paid-in capital ............................................................ 124,523 124,523
Retained earnings .......................................................... 399,398 399,398
-------- --------
585,108 585,108
Less shares held in Flexitrust, 1,965,200 shares at cost(2)................. 52,364 52,364
-------- --------
Total stockholders' equity ................................................ 532,744 532,744
-------- --------
Total long-term debt and stockholders' equity ................................ $805,700 $880,700
======== ========
</TABLE>
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(1) As of July 30, 1994, outstanding short-term debt was $92.7 million and
outstanding indebtedness to banks under revolving credit loan
agreement was $90.0 million. The increase in outstanding indebtedness
to banks under revolving credit loan agreement as of July 30, 1994 as
compared to April 30, 1994 is primarily the result of capital
expenditures associated with the Company's store expansion program.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources."
(2) On April 29, 1994, the Company sold these shares of Common Stock,
which it had repurchased in the open market, to the Flexitrust in
exchange for a promissory note payable to the Company.
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PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock of the Company is listed on the New York Stock
Exchange under the symbol "PBY". There were 3,573 registered
shareholders as of April 30, 1994. The table below sets forth the high and
low sales prices of the Common Stock and the quarterly cash dividends
declared per share of Common Stock during the periods indicated.
<TABLE>
<CAPTION>
Price Range Cash
--------------- Dividends
Low High Declared
--- ---- --------
<S> <C> <C> <C>
Fiscal Year ending January 28, 1995
First Quarter............................................. $26 $31 $.0425
Second Quarter............................................ 29 1/4 33 3/4 .0425
Third Quarter (as of August 16, 1994)..................... 29 1/8 33 7/8
Fiscal Year ended January 29, 1994
First Quarter ............................................ $19 7/8 $26 7/8 $.0375
Second Quarter............................................ 20 24 .0375
Third Quarter ............................................ 20 1/8 25 1/8 .0375
Fourth Quarter............................................ 22 7/8 27 1/2 .0375
Fiscal Year ended January 30, 1993
First Quarter ............................................ $17 1/8 $23 5/8 $.0325
Second Quarter............................................ 19 1/4 24 7/8 .0350
Third Quarter ............................................ 21 1/4 27 3/8 .0350
Fourth Quarter............................................ 21 1/2 27 1/4 .0350
</TABLE>
The last reported sales price for the Common Stock on the New York
Stock Exchange on August 16, 1994 was $33 1/8.
It is the present intention of the Company's Board of Directors to
continue to pay regular quarterly cash dividends; however, the declaration
and payment of future dividends will be determined by the Board of
Directors in its sole discretion and will depend upon the earnings,
financial condition and capital needs of the Company and other factors
which the Board of Directors deems relevant.
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<PAGE> 11
SELECTED FINANCIAL DATA
The selected financial data for the five years ended January 29, 1994
(except for "Number of retail outlets," "Ratio of earnings to fixed
charges" and "Total square footage") were derived from audited
financial statements. The financial statements for the three years ended
January 29, 1994, which have been audited by Deloitte & Touche LLP,
independent certified public accountants, are incorporated by reference
herein. The selected financial data for the 13-week periods ended April
30, 1994 and May 1, 1993, respectively, have been derived from unaudited
financial statements and reflect, in the opinion of the Company, all
adjustments necessary to present fairly the information for such periods.
The selected financial data should be read in conjunction with the
financial statements and other information contained in the Company's
Annual Report on Form 10-K for the year ended January 29, 1994, the
Company's Quarterly Report on Form 10-Q for the quarter ended April 30,
1994 and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
13 Weeks Ended Year Ended
--------------------------- -----------------------------------------------------------------------------
April 30, 1994 May 1, 1993 Jan. 29, 1994 Jan. 30, 1993 Feb. 1, 1992 Feb. 2, 1991 Feb. 3, 1990(1)
-------------- ----------- ------------- ------------- ------------ ------------ ---------------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings Statement
Data
Merchandise sales . $ 290,826 $ 260,452 $1,076,543 $1,008,191 $ 873,381 $ 774,502 $ 703,487
Service revenue ... 46,874 38,695 164,590 147,403 128,127 110,172 95,204
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total revenues .... 337,700 299,147 1,241,133 1,155,594 1,001,508 884,674 798,691
Gross profit
from merchandise
sales ............ 82,603 68,905 307,861 272,412 240,199 217,052 190,874
Gross profit
from service
revenue........... 7,924 5,884 27,457 24,528 19,726 17,854 18,120
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total gross
profit ........... 90,527 74,789 335,318 296,940 259,925 234,906 208,994
Selling, general and
administrative
expenses ......... 57,926 49,696 214,710 194,160 176,275 157,468 139,913
Operating profit .. 32,601 25,093 120,608 102,780 83,650 77,438 69,081
Nonoperating
income ........... 1,099 1,088 3,601 3,015 1,933 1,601 4,097
Interest expense .. 5,720 5,012 19,701 20,180 25,071 20,262 18,054
Earnings before
income taxes and
change in
accounting
principle......... 27,980 21,169 104,508 85,615 60,512 58,777 55,124
Income taxes....... 10,423 7,727 38,996 31,036 21,640 21,247 20,061
Earnings before
change in
accounting
principle......... 17,557 13,442 65,512 54,579 38,872 37,530 35,063
Cumulative effect of
change in accounting
principle......... (4,300) - - - - - -
Net earnings....... 13,257 13,442 65,512 54,579 38,872 37,530 35,063
Net earnings per share
before cumulative
effect of change in
accounting
principle(2)...... 0.29 0.22 1.06 .90 .69 .67 .63
Cumulative effect of
change in accounting
principle......... (0.07) - - - - - -
Net earnings
per share(2)...... 0.22 0.22 1.06 .90 .69 .67 .63
<PAGE>
<PAGE> 12
</TABLE>
<TABLE>
<CAPTION>
13 Weeks Ended Year Ended
--------------------------- -----------------------------------------------------------------------------
April 30, 1994 May 1, 1993 Jan. 29, 1994 Jan. 30, 1993 Feb. 1, 1992 Feb. 2, 1991 Feb. 3, 1990(1)
-------------- ----------- ------------- ------------- ------------ ------------ ---------------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data
Working capital.... $ 77,468 $ 127,507 $ 92,518 $ 104,622 $ 81,935 $ 91,801 $ 70,160
Total assets....... 1,155,615 1,025,910 1,078,518 967,813 856,925 819,421 676,030
Long-term debt..... 272,956 229,943 253,000 209,347 279,250 285,868 227,648
Stockholders'
equity ........... 532,744 521,792 547,759 509,763 378,514 344,603 311,754
Other Statistics
Ratio of earnings
to fixed
charges(3)......... 4.7x 4.2x 4.9x 4.3x 3.1x 3.3x 3.4x
Depreciation and
amortization...... $ 10,542 $ 9,421 $ 39,125 $ 36,674 $ 33,439 $ 27,838 $ 22,941
Capital
expenditures...... $ 30,032 $ 19,018 $ 135,165 $ 78,025 $ 65,801 $ 105,826 $ 88,398
Number of retail
outlets .......... 387 359 386 357 337 313 281
Total square
footage........... 7,813,000 7,095,000 7,771,000 7,039,000 6,522,000 5,950,000 5,299,000
<FN>
----------
(1) The fiscal year ended February 3, 1990 included 53 weeks.
(2) The shares of Common Stock held by the Flexitrust, which consisted of 1,965,200 shares as of April 30, 1994, are not
considered to be outstanding in the computation of earnings per share until the shares are utilized to fund various
compensation and benefit plans.
(3) Computed by dividing earnings by fixed charges. "Earnings" consist of earnings before income taxes plus fixed charges
(exclusive of capitalized interest costs). "Fixed charges" consist of interest costs (including capitalized interest
costs) plus one-third of rental expense (which amount is considered representative of the interest factor in rental
expense).
</TABLE>
<PAGE>
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The following table presents for the periods indicated certain items
in the consolidated statements of earnings as a percentage of total
revenues (except as otherwise provided) and the percentage change in
dollar amounts of such items compared to the indicated prior period.
<TABLE>
<CAPTION>
Percentage of Total Revenues
--------------------------------------------------------------------------
13 Weeks Ended Fiscal Year Ended
--------------------------- ---------------------------------------------
April 30, 1994 May 1, 1993 Jan. 29, 1994 Jan. 30, 1993 Feb. 1, 1992
-------------- ----------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Merchandise sales 86.1% 87.1% 86.7% 87.2% 87.2%
Service revenue(1) ..... 13.9 12.9 13.3 12.8 12.8
--------------------------------------------------------------------------
Total revenues ......... 100.0 100.0 100.0 100.0 100.0
Costs of merchandise
sales(2).............. 71.6(3) 73.5(3) 71.4(3) 73.0(3) 72.5(3)
Costs of service
revenue(2) ........... 83.1(3) 84.8(3) 83.3(3) 83.4(3) 84.6(3)
--------------------------------------------------------------------------
Total costs of revenues 73.2 75.0 73.0 74.3 74.0
Gross profit from
merchandise sales..... 28.4(3) 26.5(3) 28.6(3) 27.0(3) 27.5(3)
Gross profit from
service revenue ...... 16.9(3) 15.2(3) 16.7(3) 16.6(3) 15.4(3)
--------------------------------------------------------------------------
Total gross profit ..... 26.8 25.0 27.0 25.7 26.0
Selling, general and
administrative
expenses ............. 17.1 16.6 17.3 16.8 17.6
--------------------------------------------------------------------------
Operating profit ....... 9.7 8.4 9.7 8.9 8.4
Nonoperating income..... .3 .4 .3 .3 .2
Interest expense........ 1.7 1.7 1.6 1.8 2.5
--------------------------------------------------------------------------
Earnings before income
taxes and cumulative
effect of change in
accounting principle.. 8.3 7.1 8.4 7.4 6.1
Income taxes............ 37.3(4) 36.5(4) 37.3(4) 36.3(4) 35.8(4)
--------------------------------------------------------------------------
Earnings before
cumulative effect of
change in accounting
principle............. 5.2 4.5 5.3 4.7 3.9
Cumulative effect of
change in accounting
principle............. (1.3) - - - -
--------------------------------------------------------------------------
Net earnings ........... 3.9 4.5 5.3 4.7 3.9
==========================================================================
</TABLE>
<PAGE>
<PAGE> 14
<TABLE>
<CAPTION>
Percentage Change
-------------------------------------------------------------
1st Quarter 1994 vs. Fiscal 1993 vs. Fiscal 1992 vs.
1st Quarter 1993 Fiscal 1992 Fiscal 1991
-------------------- ---------------- -----------------
<S> <C> <C> <C>
Merchandise sales 11.7% 6.8% 15.4%
Service revenue(1) ..... 21.1 11.7 15.0
-------------------------------------------------------------
Total revenues ......... 12.9 7.4 15.4
Costs of merchandise
sales(2).............. 8.7 4.5 16.2
Costs of service
revenue(2) ........... 18.7 11.6 13.4
-------------------------------------------------------------
Total costs of revenues 10.2 5.5 15.8
Gross profit from
merchandise sales..... 19.9 13.0 13.4
Gross profit from
service revenue ...... 34.7 11.9 24.3
-------------------------------------------------------------
Total gross profit ..... 21.0 12.9 14.2
Selling, general and
administrative
expenses ............. 16.6 10.6 10.1
-------------------------------------------------------------
Operating profit ....... 29.9 17.3 22.9
Nonoperating income..... 1.0 19.4 56.0
Interest expense........ 14.1 (2.4) (19.5)
-------------------------------------------------------------
Earnings before income
taxes and cumulative
effect of change in
accounting principle.. 32.2 22.1 41.5
Income taxes............ 34.9 25.6 43.4
-------------------------------------------------------------
Earnings before
cumulative effect of
change in accounting
principle............. 30.6 20.0 40.4
Cumulative effect of
change in accounting
principle............. - - -
-------------------------------------------------------------
Net earnings ........... (1.4) 20.0 40.4
=============================================================
<FN>
----------
(1) Service revenue consists of the labor charge for installing merchandise or maintaining or repairing
vehicles, excluding the sale of any installed parts or materials.
(2) Costs of merchandise sales include the cost of products sold, buying, warehousing and store occupancy costs.
Costs of service revenue include service center payroll and related employee benefits and service center
occupancy costs. Occupancy costs include utilities, rents, real estate and property taxes, repairs and
maintenance and depreciation and amortization expenses.
(3) As a percentage of related sales or revenue, as applicable.
(4) As a percentage of earnings before income taxes.
</TABLE>
<PAGE>
<PAGE> 15
Thirteen Weeks Ended April 30, 1994 vs. Thirteen Weeks Ended May 1, 1993
Total revenues for the first quarter increased 13% due to a higher
store count (387 at April 30, 1994 compared with 359 at May 1, 1993)
coupled with a 6% increase in comparable store revenues (revenues
generated by stores in operation during the same months of each period).
Comparable store merchandise sales increased 5% while comparable service
revenue increased 11%.
Gross profit from merchandise sales increased, as a percentage of
merchandise sales, due primarily to higher merchandise margins, offset, in
part, by an increase in store occupancy costs.
Gross profit from service revenue increased, as a percentage of
service revenue, due primarily to a decrease in service center occupancy
costs.
Selling, general and administrative expenses increased, as a
percentage of total revenues, due primarily to higher media costs and a
slight increase in store expenses.
The increase in income taxes, as a percentage of earnings before
income taxes, was due primarily to a 1% increase in the federal statutory
tax rate from 34% to 35%.
The 31% increase in earnings before the cumulative effect of a change
in accounting principle in 1994 as compared with 1993, was due primarily
to an increase in gross profit from merchandise sales, as a percentage of
merchandise sales, offset, in part, by an increase in selling, general and
administrative expenses, as a percentage of total revenues.
On January 30, 1994, the Company adopted SFAS No. 112, "Employers'
Accounting for Postemployment Benefits." This statement establishes
accrual accounting standards for employer-provided benefits which cover
former or inactive employees after employment, but before retirement.
Adoption of this accounting standard on January 30, 1994 resulted in a
one-time charge to earnings of $4,300,000 (net of income tax benefit of
$2,552,000) or $.07 per share recognized as a cumulative effect of a
change in accounting principle.
Fiscal 1993 vs. Fiscal 1992
Total revenues for fiscal 1993 increased 7% over fiscal 1992 due to a
<PAGE>
<PAGE> 16
higher store count (386 at January 29, 1994 compared with 357 at January
30, 1993) coupled with a 1% increase in comparable store revenues.
Comparable store merchandise sales remained constant while comparable
store service revenue increased 3% over fiscal 1992.
The increase in gross profit from merchandise sales, as a percentage
of merchandise sales, was due primarily to higher merchandise margins,
offset, in part, by increases in store occupancy costs and warehousing
costs. The Company currently intends to continue its policy of taking what
it deems appropriate measures to respond to the price reduction practices
of certain competitors.
The small increase in gross profit from service revenue, as a
percentage of service revenue, was due primarily to a decrease in service
employee benefit costs, offset, in part, by an increase in service
personnel and occupancy costs.
The increase in selling, general and administrative expenses, as a
percentage of total revenues, was due primarily to an increase in store
expenses.
The decrease in interest expense was due to lower interest rates,
offset, in part, by higher debt levels incurred to fund the Company's
store expansion program.
The increase in income taxes, as a percentage of earnings before
income taxes, was due primarily to a 1% increase in the federal statutory
tax rate from 34% to 35%.
The 20% increase in net earnings in fiscal 1993, as compared with
fiscal 1992, was due to a substantial increase in gross profit from
merchandise sales, as a percentage of merchandise sales, offset, in part,
by an increase in selling, general and administrative expenses, as a
percentage of total revenues.
Fiscal 1992 vs. Fiscal 1991
Total revenues for fiscal 1992 increased 15% over fiscal 1991 due to a
higher store count (357 at January 30, 1993 compared with 337 at February
1, 1992) coupled with a substantial increase in comparable store revenues.
Comparable store revenues increased 12% over fiscal 1991. Comparable store
merchandise sales increased 12% and comparable store service revenue
increased 10% over fiscal 1991.
The decrease in gross profit from merchandise sales, as a percentage
of merchandise sales, was due primarily to lower merchandise margins
offset, in part, by a decrease in store occupancy costs. During fiscal
1992, selling prices on certain merchandise were lowered in an effort to
increase market share. Additionally, the Company lowered its selling
prices in certain markets on a significant number of items in response to
the actions of certain competitors.
The increase in gross profit from service revenue, as a percentage of
service revenue, was due primarily to decreases in service personnel and
<PAGE>
<PAGE> 17
occupancy costs, offset, in part, by an increase in service employee
benefit costs.
The decrease in selling, general and administrative expenses, as a
percentage of total revenues, was due primarily to a decrease in store
expenses and lower employee benefit and advertising costs. This was
partially offset by a slight increase in general office costs.
The substantial decrease in interest expense was due primarily to the
conversion of substantially all of the Company's $75,000,000 convertible
subordinated debentures into equity during fiscal 1992.
The 40% increase in net earnings in fiscal 1992, as compared with
fiscal 1991, was due to a substantial increase in comparable store
revenues, and decreases, as a percentage of total revenues, in selling,
general and administrative costs and interest expense, offset, in part, by
a decrease in gross profit from merchandise sales.
Effects of Inflation
The Company uses the LIFO method of inventory valuation. Thus, the
cost of merchandise sold approximates current cost. Although the Company
cannot accurately determine the precise effect of inflation on its
operations, it does not believe inflation has had a material effect on
revenues or results of operations.
Liquidity and Capital Resources
The Company's cash requirements arise principally from the need to
finance the acquisition, construction and equipping of new stores and to
purchase inventory. The Company opened 37 stores in fiscal 1993, 29 stores
in fiscal 1992 and 27 stores in fiscal 1991. In fiscal 1993, with
increased levels of capital expenditures due to an accelerated expansion
program coupled with cash from operating activities and lines of credit
utilized to purchase its stock for transfer to the Flexitrust, the Company
increased its debt by $77,525,000. In fiscal 1992, with substantial cash
flows from operating activities and the conversion of substantially all
its $75,000,000 convertible subordinated debentures, the Company reduced
its debt by $72,639,000. In fiscal 1991, with the increased cash flows
from operating activities and reduced levels of capital expenditures, the
Company reduced its debt by $25,037,000.
The following table indicates the Company's principal cash
requirements for the past three years.
<PAGE>
<PAGE> 18
<TABLE>
<CAPTION>
Fiscal 1993 Fiscal 1992 Fiscal 1991 Total
-------------------------------------------------------
(dollar amounts in thousands)
<S> <C> <C> <C> <C>
Capital expenditures ................ $135,165 $78,025 $65,801 $278,991
Increase (decrease) in inventory (net
of checks outstanding and accounts
payable) ........................... 26,487 24,001 (21,715) 28,773
-----------------------------------------------------
Total cash requirements .............. $161,652 $102,026 $ 44,086 $307,764
=====================================================
Cash provided by operating activities
(excluding net inventory additions) $111,595 $100,415 $ 73,625 $285,635
=====================================================
</TABLE>
Inventories have increased in the past three years as the Company
added a net of 73 stores while stock-keeping units per store rose during
the period from approximately 19,000 to approximately 24,000, many of
which were higher cost hard parts.
During the first quarter of 1994, the Company invested $30,032,000 in
property and equipment while inventory increased by $57,097,000.
The Company currently plans to open approximately 50 stores in fiscal
1994, two of which have been opened in the first quarter and eight of
which have been opened in the second quarter. Management estimates that
the cost to open all 50 stores, coupled with capital expenditures relating
to existing stores, warehouses and offices during fiscal 1994 will be
approximately $155,000,000. In addition to the funds required to finance
the Company's store expansion, the Company has authorization to purchase
Common Stock having a value of up to $75,000,000 for sale to the
Flexitrust, of which Common Stock having a value of $52,364,000 had been
purchased as of April 30, 1994 ($57,495,000 as of August 16, 1994). Funds
required to finance the store expansion, including related inventory
requirements, and the stock repurchase are expected to come from operating
activities with the remainder provided by unused lines of credit, which
totalled $104,400,000 at April 30, 1994 ($71,300,000 at July 30, 1994), or
from accessing traditional lending sources which may include the public
capital markets.
The Company's working capital was $95,012,000 at July 30, 1994,
$77,468,000 at April 30, 1994, $92,518,000 at January 29, 1994 and
$104,622,000 at January 30, 1993. The Company's long-term debt, as a
percentage of its total capitalization, was 35% at July 30, 1994, 34% at
April 30, 1994, 32% at January 29, 1994 and 29% at January 30, 1993.
<PAGE>
<PAGE> 19
DESCRIPTION OF NOTES
The Notes are to be issued under an Indenture, dated as of ,
1994 (the "Indenture"), between the Company and First Fidelity Bank,
National Association, as trustee (the "Trustee"), a form of which is
filed as an exhibit to the Registration Statement of which this Prospectus
is a part. The following summaries of certain provisions of the Indenture
do not purport to be complete, and where particular provisions of the
Indenture are referred to, such provisions, including definitions of
certain terms, are incorporated by reference as a part of such summaries
or terms, which are qualified in their entity by reference to the
provisions of the Indenture. The section references appearing below are to
sections in the Indenture.
General
The Notes will be unsecured subordinated obligations of the Company,
will mature on , 1999 and will be limited to $75,000,000 aggregate
principal amount, plus such additional amount not in excess of $11,250,000
as may be purchased by the Underwriters upon exercise of their
over-allotment option. The Notes will bear interest at the rate per annum
stated on the cover page of this Prospectus from the date of issuance, or
from the most recent Interest Payment Date to which interest has been paid
or provided for, payable semi-annually on and in each year,
commencing , 1994, to the person in whose name such Note (or any
predecessor Note) is registered at the close of business on the or
preceding such Interest Payment Date (Sections 301 and 307).
Principal of and premium, if any, and interest on the Notes will be
payable, Notes may be presented for conversion, and transfer of the Notes
will be registrable at the office or agency of the Company in the Borough
of Manhattan, the City of New York, or at any other office or agency
maintained by the Company for such purpose. In addition, payment of
interest may be made, at the option of the Company by check mailed to the
address of the person entitled thereto as shown on the Note Register
(Sections 301, 305, 1002 and 1202). The Notes are to be registered Notes,
without coupons, in denominations of $1,000 or any integral multiple
thereof (Section 302). No service charge will be made for any conversion
or registration of transfer or exchange of Notes, except for any tax or
other governmental charge that may be imposed in connection therewith
(Section 305).
Conversion Rights
The Notes will be convertible, in whole or from time to time in part
(in denominations of $1,000 or integral multiples thereof), at the option
of the holder thereof, into Common Stock of the Company, initially at the
conversion price stated on the cover page hereof, at any time prior to
redemption or maturity, except that the right to convert Notes called for
redemption will terminate at the close of business on the tenth business
day preceding the Redemption Date and will be lost if not exercised prior
to that time, unless the Company defaults in making the payment due upon
redemption (Section 1201).
<PAGE>
<PAGE> 20
If the Company, by dividend or otherwise, declares or makes a
distribution on its Common Stock of the type referred to in clause (4) or
(5) of the following paragraph, the Holder of each Note, upon the
conversion thereof subsequent to the close of business on the date fixed
for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the conversion price
adjustment in respect of such distribution pursuant to such clause (4) or
(5), will be entitled to receive for each share of Common Stock into which
such Note is converted the portion of the evidence of indebtedness, shares
of capital stock, cash and other assets so distributed applicable to one
share of Common Stock; provided, however, that the Company may, with
respect to all Holders so converting, in lieu of distributing any portion
of such distribution not consisting of cash or securities of the Company,
pay such Holder cash equal to the fair market value thereof, as determined
in good faith by the Board of Directors (Section 1201).
The conversion price will be subject to adjustment in certain events,
including: (1) the payment of dividends (and other distributions) in
Common Stock on any class of capital stock of the Company; (2) the
issuance to all holders of Common Stock of rights, warrants or options
entitling them to subscribe for or purchase Common Stock at less than the
current market price (as defined in the Indenture); provided, however,
that if such rights, warrants or options are only exercisable upon the
occurrence of certain triggering events, then the conversion price will
not be adjusted until such triggering events occur; (3) subdivisions,
combinations and reclassifications of Common Stock; (4) distributions to
all holders of Common Stock of evidences of indebtedness of the Company,
shares of any class of capital stock, cash or other assets (including
securities, but excluding those dividends, rights, warrants, options and
distributions referred to above and dividends and distributions paid in
cash out of the retained earnings of the Company); (5) distributions
consisting exclusively of cash (excluding any cash distributions for which
an adjustment has been made pursuant to a preceding clause of this
paragraph) to all holders of Common Stock in an aggregate amount that,
together with (A) other all-cash distributions made within the preceding
12 months not triggering a conversion price adjustment and (B) all Excess
Payments (as defined below) in respect of each tender offer or other
negotiated transaction by the Company or any of its subsidiaries for
Common Stock concluded within the preceding 12 months not triggering a
conversion price adjustment, exceeds an amount equal to 20% of the
Company's market capitalization (being the product of the current market
price of the Common Stock times the number of shares of Common Stock then
outstanding) on the date of such distribution; (6) issuance of Common
Stock to an Affiliate for a net consideration per share less than the
current market price per share (other than issuances of Common Stock under
certain employee benefit plans); and (7) payment of an Excess Payment in
respect of a tender offer or other negotiated transaction by the Company
or any of its subsidiaries for Common Stock, if the aggregate amount of
such Excess Payment, together with (A) the aggregate amount of all-cash
distributions made within the preceding 12 months not triggering a
conversion price adjustment and (B) all Excess Payments in respect of each
tender offer or other negotiated transaction by the Company or any of its
subsidiaries for Common Stock concluded within the preceding 12 months not
triggering a conversion price adjustment, exceeds an amount equal to 20%
of the Company's market capitalization on the expiration of such tender
<PAGE>
<PAGE> 21
offer (Section 1204). "Excess Payment" means the excess of (A) the
aggregate of the cash and value of other consideration paid by the Company
or any of its subsidiaries with respect to the shares acquired in the
tender offer or other negotiated transaction over (B) the market value of
such acquired shares after the completion of the tender offer or other
negotiated transaction.
No adjustment of the conversion price will be required to be made
until cumulative adjustments amount to 1% or more of the conversion price
as last adjusted (Section 1204). Notwithstanding the foregoing, no
adjustment to the conversion price shall reduce the conversion price below
the then par value per share of the Common Stock.
Certain adjustments in the conversion price in accordance with the
foregoing provisions (other than to take account of a stock dividend or
stock split) could be taxable pursuant to Section 305 of the Internal
Revenue Code of 1986, as amended, as a constructive distribution of stock
to holders of the Notes at the time of such adjustments in the conversion
price.
In addition to the foregoing adjustments, the Company will be
permitted to make such reductions in the conversion price as it considers
to be advisable in order that any event treated for federal income tax
purposes as a dividend of stock or stock rights will not be taxable to the
holders of the Common Stock (Section 1204). In the case of certain
consolidations or mergers to which the Company is a party or the transfer
of substantially all of the assets of the Company, each Note then
outstanding would, without the consent of any Holders of Notes, become
convertible only into the kind and amount of securities, cash and other
property receivable upon the consolidation, merger or transfer by a holder
of the number of shares of Common Stock into which such Note might have
been converted immediately prior to such consolidation, merger or transfer
(assuming such holder of Common Stock failed to exercise any rights of
election and received per share the kind and amount receivable per share
by a plurality of non-electing shares) (Section 1211).
Fractional shares of Common Stock are not to be issued upon
conversion, but, in lieu thereof, the Company will pay a cash adjustment
based upon the market price (Section 1203). Notes surrendered for
conversion during the period from the close of business on any Regular
Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date (except Notes that mature prior to
such Interest Payment Date and Notes called for redemption on a redemption
date within such period) must be accompanied by payment of an amount equal
to the interest thereon which the registered Holder is to receive. Except
where Notes surrendered for conversion must be accompanied by payment as
described above, no interest on converted Notes will be payable by the
Company on any Interest Payment Date subsequent to the date of conversion.
No other payment or adjustment for interest or dividends is to be made
upon conversion (Sections 307 and 1202).
Subordination of Notes
The payment of principal of and premium, if any, and interest on the
Notes is, to the extent set forth in the Indenture, subordinated in right
<PAGE>
<PAGE> 22
of payment to the prior payment in full of all Senior Indebtedness (as
defined below), whether now outstanding or incurred in the future (Section
1301). Upon any payment or distribution of assets of the Company to
creditors upon any dissolution, winding up, liquidation or reorganization,
the holders of all Senior Indebtedness will be entitled to receive payment
in full of all amounts due or to become due thereon before the Holders of
the Notes will be entitled to receive any payment in respect of the
principal of or premium, if any, or interest on the Notes (Section 1302),
but the obligation of the Company to make payments of principal of or
premium, if any, and interest on the Notes will not otherwise be affected
(Section 1304).
No payment on account of principal of or premium, if any, or interest
on the Notes may be made and no repurchase of the Notes may be made as
described herein under "Repurchase of Notes at the Option of the Holder
Upon a Change in Control" at any time when there is a continuing default
in any payment of principal of or premium, if any, or interest on any
Senior Indebtedness (as defined below), or any other event of default with
respect to any Senior Indebtedness resulting in the acceleration of the
maturity thereof. In addition, no payment on account of principal of or
premium, if any, or interest on the Notes may be made and no repurchase of
the Notes may be made as described herein under "Repurchase of Notes at
the Option of the Holder Upon a Change in Control" at any time there
shall have occurred and be continuing any event of default (other than a
default referred to in the immediately preceding sentence) with respect to
any Senior Indebtedness, which default would permit immediate acceleration
thereof, for the period commencing on receipt of notice of such default by
the Trustee from the holder of such Senior Indebtedness (or any
representative therefor) and ending on the earlier of (i) the date such
event of default has been cured or waived and (ii) the date 180 days after
receipt of such notice (Section 1303).
The Holders of the Notes will be subrogated to the rights of the
holders of Senior Indebtedness to the extent of payments made on Senior
Indebtedness upon any distribution of assets in any such proceedings out
of the distributive share of the Notes (Section 1302).
By reason of such subordination, in the event of insolvency of the
Company, Holders of the Notes may recover less, ratably, than other
creditors of the Company.
Senior Indebtedness is defined in the Indenture as the principal of
and premium, if any, and unpaid interest on, and any reasonable fees or
costs related to, (a) indebtedness of the Company (including indebtedness
of others guaranteed by the Company), other than the Notes, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed, (i) for money owing to banks, or their subsidiaries
or their affiliates, (ii) for money borrowed other than from banks or
(iii) arising under a lease of or given in connection with the acquisition
of property, equipment or other assets, which indebtedness, pursuant to
generally accepted accounting principles then in effect, is classified
upon the balance sheet of the Company as a liability of the Company,
unless, in each case, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
indebtedness is not superior in right of payment to the Notes; and (b)
<PAGE>
<PAGE> 23
renewals, extensions, modifications, amendments and refundings of any such
indebtedness; provided, however, that Senior Indebtedness shall not
include indebtedness to a subsidiary or other Affiliate of the Company
(Section 101).
As of July 30, 1994, after giving effect to this Offering and
application of the net proceeds therefrom, Senior Indebtedness would have
been approximately $327.4 million. The Company expects from time to time
to incur additional indebtedness constituting Senior Indebtedness. The
Indenture does not prohibit or limit the incurring of additional Senior
Indebtedness by the Company.
Redemption at the Option of the Company
The Notes are not subject to the provisions of any sinking fund. The
Notes will be redeemable, at the Company's option, as a whole or from time
to time in part (in denominations of $1,000 or integral multiples
thereof), on or after , 1997 and prior to maturity, upon not less
than 30 nor more than 60 days' notice mailed to the registered Holders
thereof, at the following redemption prices (expressed as percentages of
principal amount): if redeemed during the period commencing on ,
1997 and ending on (and including) , 1998, %; and thereafter at
100% of the principal amount, plus, in each case, accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the Interest Payment Date that is
on or prior to the redemption date) (Sections 203, 1101, 1105 and 1107).
Repurchase of Notes at the Option of the Holder Upon a Change in Control
In the event of any Change in Control (as defined below), each Holder
of Notes will have the right, at such Holder's option, to require the
Company to purchase all or any part (in denominations of $1,000 or
integral multiples thereof) of the Holder's Notes on the date (the
"Repurchase Date") that is 60 days after the date the Company gives
notice of the Change in Control as described below at a price (the
"Repurchase Price") equal to 100% of the principal amount thereof,
together with accrued and unpaid interest to the Repurchase Date (Section
1401). On or before the Repurchase Date, the Company will deposit with a
Paying Agent an amount of money sufficient to pay the Repurchase Price of
the Notes that are to be repaid on the Repurchase Date (Section 1403).
Promptly, but in any event within 30 days following any Change in
Control, the Company is required, with respect to any Senior Indebtedness
that would prohibit the repurchase of Notes by the Company in the event of
a Change in Control, to either (i) repay all such Senior Indebtedness in
full or (ii) obtain the requisite consents under such Senior Indebtedness
to permit the repurchase of the Notes as provided below (Section 1303).
Notwithstanding the foregoing, failure by the Company to repurchase the
Notes when required under the preceding paragraph will result in an Event
of Default under the Indenture whether or not such repurchase is permitted
by the subordination provisions of the Indenture (Section 501).
On or before the 20th day after the occurrence of a Change in Control,
the Company is obligated to mail to the Trustee and to all Holders of
record of the Notes a notice of the occurrence of such Change in Control,
<PAGE>
<PAGE> 24
the date by which the repurchase right must be exercised, the Repurchase
Price for the Notes and the procedures that the Holder must follow to
exercise this right. To exercise the repurchase right, the Holder of a
Note must deliver, at any time prior to the close of business on the
Repurchase Date, written notice to an agent designated by the Company for
such purpose of the Holder's exercise of such right, stating the
certificate numbers of the Note or Notes with respect to which the right
is being exercised, the portion (which portion must be $1,000 or an
integral multiple thereof) of the principal amount of the Notes that the
Holder will deliver to be repurchased, and that such Notes will be
repurchased pursuant to the terms of Article Fourteen (Section 1401).
Under the Indenture, a "Change in Control" of the Company is deemed
to have occurred at such time as (i) a "person" or "Group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) (A) becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act)
of more than 50% of the total voting rights attaching to the then
outstanding voting capital stock of the Company or (B) has the right or
the ability by voting right, contract or otherwise to elect or designate
for election a majority of the entire Board of Directors; or (ii) (A) the
Company consolidates with or merges into any other Person or conveys,
transfers or leases all or substantially all of its assets to any Person
or (B) any Person merges into the Company, in either event pursuant to a
transaction in which voting capital stock of the Company representing more
than 50% of the total voting rights of the Company outstanding immediately
prior to the effectiveness thereof is reclassified or changed into or
exchanged for cash, securities or other property; provided, that any
consolidation, merger, conveyance, transfer or lease between the Company
and any of its Subsidiaries (including, without limitation, the
reincorporation of the Company in another jurisdiction) shall be excluded
from the operation of this clause (ii). Notwithstanding the above, a
Change in Control shall not be deemed to have occurred by virtue of the
Company's or any of its employee benefit or stock plans' filing (or being
required to file after the lapse of time) a Schedule 13D or 14D-1 (or any
successor or similar schedule, form or report under the Exchange Act) as a
result of the Company's or any such plans' becoming the beneficial owner
of shares of capital stock of the Company entitling such person to
exercise a majority of the total voting power of all shares of capital
stock of the Company entitled to vote in ordinary circumstances in
elections of directors. (Section 101).
The right of Holders of the Notes to require the Company to repurchase
the Notes would not be triggered by certain corporate restructurings and
similar technical changes in corporate form, e.g., in the event of a
merger or consolidation of the Company where the Person formed by such
consolidation or into which the Company is merged expressly and directly
assumes the obligations of the Company in compliance with Section 801 of
the Indenture (Section 801). Furthermore, the right of Holders of the
Notes to require the Company to repurchase the Notes may be modified by
the Company and the Trustee with the consent of the Holders of not less
than a majority in principal amount of the Notes at the time outstanding
(Section 902).
If a Change in Control were to occur, there can be no assurance that
the Company would have sufficient funds to pay the Repurchase Price for
<PAGE>
<PAGE> 25
all Notes tendered. Except as described above with respect to a Change in
Control, the Indenture does not contain provisions that permit the Holders
of the Notes to require that the Company repurchase or redeem the Notes in
the event of a takeover, recapitalization or similar restructuring. In
addition, the Change in Control provisions may in certain circumstances
make more difficult or discourage a takeover of the Company.
In the event a Change in Control occurs and the Holders exercise their
rights to require the Company to repurchase Notes, the Company intends to
comply with applicable tender offer rules under the Exchange Act,
including Rules 13e-4 and 14e-1, as then in effect, with respect to any
such purchase (Section 1405).
Limitations on Mergers
The Company may, without the consent of the Holders of the Notes,
consolidate with or merge into any other entity or convey, transfer or
lease all or substantially all of its properties and assets to any person
provided that (i) the entity formed by such consolidation or into which
the Company is merged or the person that acquires by conveyance or
transfer, or which leases all or substantially all of the properties and
assets of the Company is a corporation, partnership or trust organized and
existing under the laws of the United States, any state thereof or the
District of Columbia, (ii) the successor entity shall expressly assume, by
a supplemental indenture executed and delivered by the successor entity to
the Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of and premium, if any, and interest on the Notes
and the performance of every covenant of the Indenture on the part of the
Company to be performed or observed and has provided for conversion rights
in accordance with the Indenture, (iii) immediately after giving effect to
such transaction, no Event of Default, and no event that, after notice or
lapse of time or both, would become an Event of Default, shall have
occurred and be continuing, and (iv) such consolidation, merger,
conveyance, transfer or lease does not affect the validity or
enforceability of the Notes (Section 801).
Modification and Waiver
Modifications and amendments of the Indenture may be made by the
Company and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the Notes at the time outstanding;
provided, however, that no such modification or amendment may, without the
consent of the Holder of each outstanding Note affected thereby, (i)
change the stated maturity of the principal of, or any installment of
interest on, any Note, (ii) reduce the principal amount of, or the
premium, if any, or interest on, any Note, (iii) change the place or
currency of payment of principal of, or premium, if any, or interest on,
any Note, (iv) impair the right to institute suit for the enforcement of
any payment on or with respect to any Note, (v) adversely affect the right
to convert Notes, (vi) modify the subordination provisions in a manner
adverse to the Holders of the Notes, (vii) reduce the above-stated
percentage of outstanding Notes necessary to modify or amend the Indenture
or (viii) reduce the percentage of aggregate principal amount of
outstanding Notes necessary for waiver of certain defaults (Section 902).
<PAGE>
<PAGE> 26
The Holders of a majority in aggregate principal amount of the
outstanding Notes may waive any past default under the Indenture, except
that a default in the payment of principal of or premium, if any, or
interest on the Notes or a failure to comply with certain covenants of the
Company may not be waived without the consent of the Holder of each
outstanding Note (Section 513).
Events of Default
The following will be Events of Default under the Indenture: (i)
failure to pay principal of or premium, if any, on any Note when due,
whether or not such payment is prohibited by the subordination provisions
of the Indenture; (ii) failure to pay any interest on any Note when due
for 30 days, whether or not such payment is prohibited by the
subordination provisions of the Indenture; (iii) failure to repurchase or
redeem the Notes as provided in the Indenture; (iv) failure to perform any
other covenant of the Company in the Indenture, which failure continues
for 60 days after written notice as provided in the Indenture; (v) default
in the payment of any indebtedness of the Company in excess of $10 million
for borrowed money or representing any Senior Indebtedness at its stated
maturity or default on any such indebtedness that results in the
acceleration of such indebtedness prior to its express maturity; and (vi)
certain events of bankruptcy, insolvency or reorganization of the Company
(Section 501).
Subject to the provisions of the Indenture relating to the duties of
the Trustee, in case an Event of Default shall occur and be continuing,
the Trustee will be under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any of the
Holders, unless such Holders shall have offered to the Trustee reasonable
indemnity (Section 603). Subject to such provisions for the
indemnification of the Trustee, the Holders of a majority in principal
amount of the Outstanding Notes 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
(Section 512).
If an Event of Default shall occur and be continuing, other than an
event of bankruptcy, insolvency or reorganization of the Company, either
the Trustee or the Holders of at least 25% in principal amount of the
Outstanding Notes may accelerate the maturity of all Notes. If an Event of
Default shall occur and be continuing by reason of an event of bankruptcy,
insolvency or reorganization of the Company, the maturity of the Notes
shall immediately become due and payable without any act on the part of
the Trustee or any Holder. After any such acceleration but before a
judgment or decree based on acceleration, the Holders of a majority in
aggregate principal amount of Outstanding Notes may, under certain
circumstances, rescind or annul such acceleration if all Events of
Default, other than the non-payment of acceleration principal, have been
cured or waived as provided in the Indenture (Section 502). For
information as to waiver of defaults, see "Modification and Waiver."
No Holder of any Note will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such
Holder shall have previously given to the Trustee written notice of a
<PAGE>
<PAGE> 27
continuing Event of Default and unless the Holders of at least 25% in
principal amount of the Outstanding Notes shall have made written request
and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, and the Trustee shall not have received from the
Holders of a majority in principal amount of the Outstanding Notes a
direction inconsistent with such request and shall have filed to institute
such proceeding within 60 days (Section 507). However, such limitations do
not apply to a suit instituted by a Holder of a Note for the enforcement
or payment of the principal or premium, if any, or interest on such Note
on or after the respective due dates expressed in such Note or of the
right to convert such Note in accordance with the Indenture (Section 508).
The Company will be required to furnish to the Trustee annually a
statement as to its performance of certain of its obligations under the
Indenture and as to any default in such performance (Section 1004).
Discharge of Indenture; Defeasance
The Company may terminate all obligations under the Indenture at any
time by delivering all outstanding Notes to the Trustee for cancellation
and paying any other sums payable under the Indenture.
The Indenture also provides that the Company may elect:
(a) to defease and be discharged from any and all obligations with
respect to the Notes and that the provisions of the Indenture
will no longer be in effect with respect to the Notes, except
for the obligations to register the transfer or exchange of
the Notes, to replace temporary or mutilated, destroyed, lost
or stolen Notes, to maintain an office or agency in respect of
the Notes and to hold monies for payment in trust
("Defeasance"); or
(b) to be released from its obligations with respect to the Notes
under certain restrictive covenants of the Indenture, and that
violation of such covenants will not constitute an "Event of
Default" under the Indenture ("Covenant Defeasance").
Such Defeasance or Covenant Defeasance will take effect only upon the
deposit with the Trustee, in trust for such purpose, of money and/or U.S.
Government Obligations that, through the payment of principal and interest
in accordance with their terms, will provide money in an amount sufficient
to pay the principal of and premium, if any, and interest on the Notes on
the dates such payments are due, and certain other conditions are
satisfied.
The Trustee
The Trustee is First Fidelity Bank, National Association, which also
serves as trustee of the Flexitrust.
<PAGE>
<PAGE> 28
DESCRIPTION OF COMMON STOCK AND RELATED RIGHTS
The statements made under this caption include summaries of certain
provisions contained in the Company's Articles of Incorporation, Bylaws
and Shareholders Rights Plan (as amended, the "Plan"). These statements
do not purport to be complete and are qualified in their entirety by
reference to such documents.
The Company is authorized to issue 500,000,000 shares of Common Stock,
$1.00 par value, of which 61,321,080 shares were outstanding as of July
30, 1994. Holders of Common Stock are entitled to receive dividends when
and as declared by the Board of Directors out of funds legally available
therefor. See "Price Range of Common Stock and Dividends" for
information as to dividend policy. Holders of Common Stock have no
preemptive right to purchase additional shares. Each share of Common Stock
is entitled to one vote with respect to matters other than the election of
directors. In the election of directors, each holder of Common Stock is
entitled to as many votes as is equal to the number of shares held
multiplied by the number of directors to be elected, and each shareholder
may cast all of such votes for a single director or may distribute them
among any number of directors to be voted for. The Bylaws of the Company
provide that the Board of Directors shall consist of not more than 12
members divided into three classes, the precise number of members to be
fixed from time to time by the Board of Directors. The Board is currently
comprised of nine Directors. The Directors of the class elected at each
annual election hold office for a term of three years, with the term of
each class expiring at successive annual meetings of shareholders.
On December 17, 1987, the Company adopted the Plan. Pursuant thereto,
the Board declared a dividend distribution of one Common Stock Purchase
Right ("Right") for each share of the Company's Common Stock then
outstanding and authorized the issuance of one Right with respect to each
share of Common Stock to become outstanding thereafter, including the
Common Stock issuable upon the conversion of the Notes offered hereby.
Each Right ordinarily entitles its holder to purchase one share of Common
Stock at an exercise price of $55 per share, subject to adjustment
pursuant to certain antidilution provisions. The Rights will become
exercisable only if a person or a group acquires beneficial ownership of
20% or more of the Company's Common Stock (exclusive of holdings as of
December 17, 1987) or announces a tender offer, the consummation of which
would result in ownership by a person or a group of 30% or more of the
Common Stock (exclusive of holdings as of December 17, 1987). The Company,
by action of its Board of Directors, is entitled to redeem the Rights at
$.02 per Right at any time before a person or a group has crossed the 20%
ownership threshold and, provided a majority of the Company's independent
directors approves such redemption, for 15 days thereafter.
If the Company is involved in a merger or other business combination
at any time after the Rights become exercisable, each Right will entitle
its holder to buy a number of shares of common stock of the acquiring
company having a market value equal to twice the exercise price of each
Right. In addition, if a person or group acquires 20% or more of the
Company's Common Stock (exclusive of shareholdings as of December 17,
1987) or if a 20% or greater shareholder (exclusive of shareholders as of
December 17, 1987) acquires the Company by means of a reverse merger or
<PAGE>
<PAGE> 29
engages in certain self-dealing transactions with the Company, each Right
not owned by such party will entitle its holder to purchase, at the
Right's then current exercise price, that number of shares of Common Stock
having a market value at the time of twice the exercise price of each
right. The Plan authorizes the Company's independent directors to waive or
alter certain features of the Rights in certain circumstances. The final
expiration date of the Rights, even if they never become exercisable, is
December 31, 1997.
The foregoing provisions of the Bylaws and the Plan may have an effect
of delaying, deferring or preventing a change in control of the Company.
Although the Flexitrust is not intended to be an antitakeover mechanism,
the creation of the Flexitrust and the purchase of shares of Common Stock
by the Flexitrust may also have certain antitakeover effects. Because the
trustee of the Flexitrust votes the Common Stock held by it in the manner
directed by participants in certain of the Company's employee benefit
plans, the transfer of shares of Common Stock to the Flexitrust may make
it more difficult for an acquiror of Common Stock to obtain an affirmative
vote for a proposed merger without employee support. Additionally, an
Interested Shareholder (as defined in Section 2553 of the Pennsylvania
Business Corporation Law of 1988, as amended (the "BCL")) would find it
difficult to engage in a business combination with the Company during the
five-year period after becoming an Interested Shareholder without the
support of some employees.
The Company's Common Stock is currently listed on the New York Stock
Exchange. The transfer agent and registrar for the Company's Common Stock
is American Stock Transfer & Trust Company, New York, New York.
UNDERWRITING
Under the terms and conditions contained in an underwriting agreement
between CS First Boston Corporation (the "Underwriter") and the Company
(the "Underwriting Agreement"), the Underwriter has agreed with the
Company to purchase from the Company all of the Notes.
The Underwriting Agreement provides that the obligations of the
Underwriter are subject to certain conditions precedent and that the
Underwriter will be obligated to purchase all of the Notes being offered
hereby if any are purchased.
The Company has granted the Underwriter an option, expiring at the
close of business on the 30th day after the date of the initial public
offering of the Notes, to purchase up to an additional $11,250,000
principal amount of Notes at the initial public offering price less the
underwriting discount, all as set forth on the cover page of this
Prospectus. The Underwriter may exercise such option only to cover
over-allotments in the sale of the Notes.
The Company has been advised by the Underwriter that it proposes to
offer the Notes to the public initially at the offering price set forth on
the cover page of this Prospectus and to certain dealers at such price
less a concession of % of the principal amount per Note. The Underwriter
and such dealers may allow a discount of % of such principal amount on
sales to certain other dealers; after the initial public offering, the
<PAGE>
<PAGE> 30
public offering price and concession and discount to dealers may be
changed by the Underwriter.
The Notes have been approved for listing on The New York Stock
Exchange, subject to official notice of issuance; however, no assurance
can be given that an active trading market for the Notes will develop or
continue.
The Company and the directors and executive officers of the Company
have agreed that, for a period of 90 days after the commencement of the
Offering, they will not, without the prior written consent of the
Underwriter, directly or indirectly, issue, offer, sell, contract to sell,
grant any option to purchase, hypothecate or otherwise dispose of, or file
a registration statement under the Securities Act relating to, any Common
Stock or any security convertible into or exchangeable for Common Stock,
other than to the Underwriter pursuant to the Underwriting Agreement, upon
conversion of the Notes or pursuant to employee benefit plans (including
stock option plans) existing on the date of this Prospectus.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including civil liabilities under the Securities Act, and
under certain circumstances, to contribute to payments that the
Underwriter may be required to make in respect thereof.
The Underwriter from time to time performs investment banking services
for the Company for customary fees.
NOTICE TO CANADIAN RESIDENTS
Resale Restrictions
The distribution of the Notes in Canada is being made only on a
private placement basis exempt from the requirement that the Company
prepare and file a prospectus with the securities regulatory authorities
in each province where trades of Notes are effected. Accordingly, any
resale of the Notes in Canada must be made in accordance with applicable
securities laws which will vary depending on the relevant jurisdiction,
and which may require resales to be made in accordance with available
statutory exemptions or pursuant to a discretionary exemption granted by
the applicable Canadian securities regulatory authority. Purchasers are
advised to seek legal advice prior to any resale of the Notes.
Representations of Purchasers
Each purchaser of Notes in Canada who receives a purchase confirmation
will be deemed to represent to the Company and the dealer from whom such
purchase confirmation is received that (i) such purchaser is entitled
under applicable provincial securities laws to purchase such Notes without
the benefit of a prospectus qualified under such securities laws, (ii)
where required by law, such purchaser is purchasing as principal and not
as agent, and (iii) such purchaser has reviewed the text above under
"Resale Restrictions."
<PAGE>
<PAGE> 31
Rights of Action and Enforcement
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a
result, Ontario purchasers must rely on other remedies that may be
available, including common law rights of action for damages or rescission
or rights of action under the civil liability provisions of the U.S.
federal securities laws.
All of the issuer's directors and officers as well as the experts
named herein may be located outside of Canada and, as a result, it may not
be possible for Ontario purchasers to effect service of process within
Canada upon the issuer or such persons. All or a substantial portion of
the assets of the issuer and such persons may be located outside Canada
and, as a result, it may not be possible to satisfy a judgment against the
issuer or such persons in Canada or to enforce a judgment obtained in
Canadian courts against such issuer or person outside of Canada.
Notice to British Columbia Residents
A purchaser of Notes to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the
British Columbia Securities Commission a report within ten days of the
sale of any Notes acquired by such purchaser pursuant to this offering.
Such report must be in the form attached to British Columbia Securities
Commission Blanket Order BOR #88/5, a copy of which may be obtained from
the Company. Only one such report must be filed in respect of Notes
acquired on the same date and under the same prospectus exemption.
LEGAL MATTERS
The validity of the authorization and issuance of the Notes offered
hereby is being passed upon for the Company by Willkie Farr & Gallagher,
New York, New York, and for the Underwriter by Dewey Ballantine, New York,
New York.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended January 29, 1994 have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their
report which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
<PAGE>
<PAGE> 32
<TABLE>
<CAPTION>
<S> <C>
====================================================== ======================================================
No dealer, salesperson or other individual has (Logo)
been authorized to give any information or to make any PEP BOYS(R)
representation not contained in this Prospectus and,
if given or made, such information or representation
must not be relied upon as having been authorized by $75,000,000
the Company or the Underwriter. This Prospectus does
not constitute an offer to sell or solicitation of an
offer to buy any of the securities offered hereby in
any jurisdiction or to any person to whom it is % Convertible Subordinated
unlawful to make such offer in such jurisdiction. Notes Due 1999
Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create
any implication that the information 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 such date. PROSPECTUS
(LOGO) CS FIRST BOSTON
----------
TABLE OF CONTENTS
Page
----
Available Information........................... 2
Incorporation of Certain Documents by
Reference..................................... 2
The Company..................................... 3
Recent Developments............................. 4
Use of Proceeds................................. 4
Capitalization.................................. 5
Price Range of Common Stock and Dividends....... 6
Selected Financial Data......................... 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations. 8
Description of Notes............................ 12
Description of Common Stock and Related Rights.. 18
Underwriting ................................... 20
Notice to Canadian Residents.................... 20
Legal Matters................................... 21
Experts......................................... 21
====================================================== ======================================================
</TABLE>
<PAGE>
<PAGE> 33
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth all expenses (other than the
underwriting discounts and commissions) in connection with the sale and
distribution of the securities being registered, which will be paid solely
by the Company. All the amounts shown are estimates, except the Commission
registration fee and the NASD fee:
SEC Registration Fee ................... $ 29,742
NASD Fee................................ 9,125
Transfer Agent and Registrar Fees and
Expenses ............................. 10,000
Printing and Engraving Expenses......... 25,000
Legal Fees and Expenses................. 100,000
Accounting Fees and Expenses ........... 15,000
Blue Sky Fees and Expenses ............. 10,000
Trustee Fees ........................... 8,500
Miscellaneous Expenses ................. 42,633
--------
Total ............................ $250,000
========
Item 15. Indemnification of Directors and Officers
Sections 1741 through 1750 of Subchapter D, Chapter 17, of the BCL
contain provisions for mandatory and discretionary indemnification of a
corporation's directors, officers and other personnel, and related
matters.
Under Section 1741, subject to certain limitations, a corporation has
the power to indemnify directors and officers under certain prescribed
circumstances against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred in
connection with an action or proceeding, whether civil, criminal,
administrative or investigative (other than derivative actions), to which
any of them is a party or is threatened to be made a party by reason of
his being a representative of the corporation or serving at the request of
the corporation as a representative of another corporation, partnership,
joint venture, trust or other enterprise, if he acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal proceeding,
had no reasonable cause to believe his conduct was unlawful.
Section 1742 permits indemnification in derivative actions if the
appropriate standard of conduct is met, except in respect of any claim,
issue or matter as to which the person has been adjudged to be liable to
the corporation unless and only to the extent that the proper court
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<PAGE> 34
determines upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for the expenses that the court deems
proper.
Under Section 1743, indemnification is mandatory to the extent that
the officer or director has been successful on the merits or otherwise in
defense of any action or proceeding referred to in Section 1741 or 1742.
Section 1744 provides that, unless ordered by a court, any
indemnification under Section 1741 or 1742 shall be made by the
corporation only as authorized in the specific case upon a determination
that the representative met the applicable standard of conduct and that
such determination will be made (i) by the board of directors by a
majority vote of a quorum of directors not parties to the action or
proceeding; (ii) if a quorum is not obtainable, or if obtainable and a
majority of disinterested directors so directs, by independent legal
counsel; or (iii) by the shareholders.
Section 1745 provides that expenses incurred by an officer or director
in defending an action or proceeding may be paid by the corporation in
advance of the final disposition of such action or proceeding upon receipt
of an undertaking by or on behalf of such person to repay such amount if
it shall ultimately be determined that he is not entitled to be
indemnified by the corporation.
Section 1746 provides generally that the indemnification and
advancement of expenses provided by Subchapter 17D of the BCL (i) will not
be deemed exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding that office, and (ii) may not be made in
any case where the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted willful
misconduct or recklessness.
Section 1747 grants a corporation the power to purchase and maintain
insurance on behalf of any director or officer against any liability
incurred by him in his capacity as officer or director, whether or not the
corporation would have the power to indemnify him against that liability
under Subchapter 17D of BCL.
Sections 1748 and 1749 extend the indemnification and advancement of
expenses provisions contained in Subchapter 17D of the BCL to successor
corporations in fundamental corporate changes and to representatives
serving as fiduciaries of employee benefit plans.
Section 1750 provides that the indemnification and advancement of
expenses provided by, or granted pursuant to, Subchapter 17D of the BCL
shall, unless otherwise provided when authorized or ratified, 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 and personal representative of
such person.
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<PAGE> 35
Article VII of the Company's Bylaws provides in general that the
Company shall indemnify its officers and directors to the fullest extent
permitted by law. The Bylaws further provide that any alteration,
amendment, or repeal of the indemnification provisions, if not approved by
80% of the Board of Directors, requires the affirmative vote of
shareholders owning at least 80% of the outstanding shares entitled to
vote.
The Company has purchased liability insurance on behalf of its
directors and officers. A form of such policy is filed as Exhibit 10.5 to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
February 3, 1990.
See Section 7 of the Underwriting Agreement, filed as Exhibit 1
hereto, pursuant to which the Underwriter agrees to indemnify the Company,
its directors, certain officers and controlling persons against certain
liabilities, including liabilities under the Securities Act.
Item 16. Exhibits.
Exhibit
Number Description
------ -----------
1 Form of Underwriting Agreement
4.1 Form of Indenture between the Company and First Fidelity Bank,
National Association, as Trustee, including form of Note
4.2 Rights Agreement, dated as of December 17, 1987, between the Company
and The Philadelphia National Bank, including form of Right
Certificate and Summary of Rights to Purchase Common Stock
(incorporated by reference to Exhibit 1 to the Company's Current
Report on Form 8-K dated December 17, 1987)
4.3 Amendment to Rights Agreement, dated as of June 6, 1989, between the
Company and The Philadelphia National Bank (incorporated by
reference to Exhibit 1 to the Company's Current Report on Form 8-K
dated June 6, 1989)
5 Opinion of Willkie Farr & Gallagher
12.1 Calculation of Ratio of Earnings to Fixed Charges (incorporated by
reference to Exhibit 12 to the Company's Annual Report on Form 10-K
for the year ended January 29, 1994)
12.2 Calculation of Ratio of Earnings to Fixed Charges for the 13 weeks
ended April 30, 1994 and May 1, 1993
23.1 Consent of Willkie Farr & Gallagher (included as part of Exhibit 5)
23.2 Consent of Deloitte & Touche LLP
24 Power of Attorney (included as part of signature page)
25 Form T-1, Statement of Eligibility under the Trust Indenture Act of
1939 of the Trustee
Item 17. Undertakings
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall
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<PAGE> 36
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 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that, in the opinion of the
Commission, such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by them is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that: (1) for purposes of
determining any liability under the Securities Act, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective; and (2) for the
purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that is 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 Philadelphia, Commonwealth of
Pennsylvania, on August 17, 1994.
THE PEP BOYS - MANNY, MOE & JACK
By: /s/ MITCHELL G. LEIBOVITZ
------------------------------
Mitchell G. Leibovitz
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
<PAGE> 38
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mitchell G. Leibovitz and Michael
J. Holden, and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments to this Registration Statement, and to file the same, with all
exhibits thereto, and other documentation in connection therewith, with
the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, 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/ MITCHELL G. LEIBOVITZ Chairman of the Board, August 17, 1994
------------------------------- President and Chief
Mitchell G. Leibovitz Executive Officer and
Director (Principal
Executive Officer)
/s/ MICHAEL J. HOLDEN Senior Vice President and August 17, 1994
-------------------------------- Chief Financial Officer
Michael J. Holden (Principal Financial and
Accounting Officer)
/s/ LENNOX K. BLACK Director August 17, 1994
--------------------------------
Lennox K. Black
/s/ PEMBERTON HUTCHINSON Director August 17, 1994
--------------------------------
Pemberton Hutchinson
/s/ BERNARD J. KORMAN Director August 17, 1994
--------------------------------
Bernard J. Korman
/s/ J. RICHARD LEAMAN, JR. Director August 17, 1994
--------------------------------
J. Richard Leaman, Jr.
/s/ LESTER ROSENFELD Director August 17, 1994
--------------------------------
Lester Rosenfeld
/s/ BENJAMIN STRAUSS Director August 17, 1994
--------------------------------
Benjamin Strauss
/s/ MYLES H. TANENBAUM Director August 17, 1994
--------------------------------
Myles H. Tanenbaum
/s/ DAVID V. WACHS Director August 17, 1994
--------------------------------
David V. Wachs
</TABLE>
<PAGE>
<PAGE> 39
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
1 Form of Underwriting Agreement
4.1 Form of Indenture between the Company and First Fidelity
Bank, National Association, as Trustee, including form
of Note
4.2 Rights Agreement, dated as of December 17, 1987, between
the Company and The Philadelphia National Bank,
including form of Right Certificate and Summary of
Rights to Purchase Common Stock (incorporated by
reference to Exhibit 1 to the Company's Current Report
on Form 8-K dated December 17, 1987)
4.3 Amendment to Rights Agreement, dated as of June 6, 1989,
between the Company and The Philadelphia National Bank
(incorporated by reference to Exhibit 1 to the Company's
Current Report on Form 8-K dated June 6, 1989)
5 Opinion of Willkie Farr & Gallagher
12.1 Calculation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12 to the
Company's Annual Report on Form 10-K for the year ended
January 29, 1994)
12.2 Calculation of Ratio of Earnings to Fixed Charges for
the 13 weeks ended April 30, 1994 and May 1, 1993
23.1 Consent of Willkie Farr & Gallagher (included as part of
Exhibit 5)
23.2 Consent of Deloitte & Touche LLP
24 Power of Attorney (included as part of signature page)
25 Form T-1, Statement of Eligibility under the Trust
Indenture Act of 1939 of the Trustee
<PAGE>
<PAGE>
<PAGE> 1 EX-1
Draft of 8/16/94
$__________
THE PEP BOYS - MANNY, MOE AND JACK
____% Convertible Subordinated Notes Due 1999
UNDERWRITING AGREEMENT
____ __, 1994
CS FIRST BOSTON CORPORATION
Park Avenue Plaza
New York, NY 10055
Ladies and Gentlemen:
1. Introductory. The Pep Boys - Manny, Moe and Jack, a
Pennsylvania corporation (the "Company"), proposes to issue and sell to CS
First Boston Corporation (the "Underwriter") $__________ principal amount
(the "Firm Securities") of its ____% Convertible Subordinated Notes Due 1999
(the "Notes") to be issued under an indenture, dated as of ____ __, 1994
("Indenture"), between the Company and First Fidelity Bank, National
Association, as Trustee, and also proposes to issue and sell, at the option
of the Underwriter, an aggregate of not more than $_________ principal amount
(the "Option Securities") of the Notes as set forth below. The Firm
Securities and the Option Securities are hereinafter collectively referred to
as the "Securities". The Company hereby agrees with the Underwriter as
follows:
2. Representations and Warranties of the Company. (a) The
Company represents and warrants to, and agrees with, the Underwriter that:
(i) A registration statement on Form S-3 (No. 33- ), including
a form of prospectus, relating to the Securities has been filed with the
Securities and Exchange Commission ("Commission") and either (A) has
been declared effective under the Securities Act of 1933, as amended
("Act"), and is not proposed to be amended or (B) is proposed to be
amended by amendment or post-effective amendment. If the Company does
not propose to amend such registration statement and if any post-
effective amendment to such registration statement has been filed with
the Commission prior to the execution and delivery of this Agreement,
the most recent such amendment has been declared effective by the
Commission. For purposes of this Agreement, "Effective Time" means (A)
if the Company has advised you that it does not propose to amend such
registration statement, the date and time as of which such registration
statement, or the most recent post-effective amendment thereto (if any)
<PAGE>
<PAGE> 2 EX-1
filed prior to the execution and delivery of this Agreement, was
declared effective by the Commission or (B) if the Company has advised
you that it proposes to file an amendment or post-effective amendment to
such registration statement, the date and time as of which such
registration statement, as amended by such amendment or post-effective
amendment, as the case may be, is declared effective by the Commission.
"Effective Date" means the date of the Effective Time. Such
registration statement, as amended at the Effective Time, including all
material incorporated by reference therein and including all information
(if any) deemed to be a part of such registration statement as of the
Effective Time pursuant to Rule 430A(b) under the Act, is hereinafter
referred to as the "Registration Statement," and the form of prospectus
relating to the Securities, as first filed with the Commission pursuant
to and in accordance with Rule 424(b) ("Rule 424(b)") under the Act or
(if no such filing is required) as included in the Registration
Statement, including all material incorporated by reference in such
prospectus, is hereinafter referred to as the "Prospectus". No stop
order suspending the effectiveness of such Registration Statement or any
part thereof has been issued and no proceeding for that purpose has been
instituted or, to the Company's knowledge, threatened by the Commission.
(ii) If the Effective Time is prior to the execution and delivery
of this Agreement: (A) at the Effective Time, the Registration Statement
conformed in all material respects to the requirements of the Act, the
Trust Indenture Act of 1939 ("Trust Indenture Act") and the rules and
regulations of the Commission ("Rules and Regulations") and did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and (B) on the date of this Agreement,
the Registration Statement conforms, and at the time of filing of the
Prospectus pursuant to Rule 424(b) and on the First Closing Date and any
Second Closing Date, the Registration Statement and the Prospectus will
conform, in all material respects to the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations, and neither of such
documents includes, or will include, any untrue statement of a material
fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. If the
Effective Time is subsequent to the execution and delivery of this
Agreement: (A) at the Effective Time, the Registration Statement and the
Prospectus will conform in all material respects to the requirements of
the Act, the Trust Indenture Act and the Rules and Regulations, and
neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and (B) on the First Closing Date and
any Second Closing Date, the Registration Statement and the Prospectus
will conform in all material respects to the requirements of the Act,
the Trust Indenture Act and the Rules and Regulations, and neither of
such documents will include any untrue statement of a material fact or
will omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The two preceding sentences
do not apply to statements in or omissions from the Registration
Statement or Prospectus based upon written information furnished to the
Company by the Underwriter specifically for use therein.
(iii) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Act, conformed when so filed in all
material respects to the requirements of the Act and the Rules and
Regulations.
(iv) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the Commonwealth of
Pennsylvania, and has the corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus; and the Company is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of its
business or its ownership, leasing or operation of property requires
such qualification, except to the extent that the failure to be so
qualified or in good standing would not have a material adverse effect
on the Company and its Subsidiaries, taken as a whole.
<PAGE>
<PAGE> 3 EX-1
(v) The Company's only subsidiaries are listed on Schedule A
hereto (collectively, the "Subsidiaries"). Each Subsidiary of the
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership, leasing or operation of property requires such
qualification, except to the extent that the failure to be so qualified
or in good standing would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole. All of the outstanding
capital stock of each Subsidiary has been duly authorized and validly
issued and is fully paid and non-assessable and is owned by the Company,
directly or through Subsidiaries, free and clear of any mortgage,
pledge, lien, perfected security interest, claim or encumbrance of any
kind or, to the knowledge of the Company, any unperfected security
interest.
(vi) All outstanding shares of capital stock of the Company have
been duly authorized, are validly issued, fully paid and non-assessable
and have been issued in compliance with applicable federal and state
securities laws; the Company has an authorized and outstanding capital
stock as set forth in the Prospectus under the caption "Capitalization";
and the stockholders of the Company have no preemptive or similar rights
with respect to the capital stock or any other securities of the
Company.
(vii) The Securities are convertible into common stock, par value
$1.00 per share, of the Company (the "Common Stock") in accordance with
the terms of the Indenture; the shares of Common Stock issuable upon
conversion of the Securities have been duly authorized and reserved for
issuance upon such conversion and, if and when issued upon such
conversion, will be validly issued, fully paid and non-assessable and
will conform to the description thereof contained in the Prospectus.
(viii) There are no contracts, agreements or understandings between
the Company and any third party granting such third party the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
third party or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
other securities being registered pursuant to any other registration
statement filed by the Company under the Act.
(ix) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except to the extent that (A) enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to creditors' rights generally and by general
principles of equity and (B) rights to indemnity and contribution may be
limited by federal or state securities laws or policies underlying such
laws.
(x) The Indenture has been duly authorized by the Company, will be
substantially in the form heretofore delivered to you and, when duly
executed and delivered by the Company and the Trustee, will constitute a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally
and by general principles of equity; the Indenture is (or, if the
<PAGE>
<PAGE> 4 EX-1
Effective Time is subsequent to the execution and delivery of this
Agreement, at the Effective Time the Indenture will be) duly qualified
under the Trust Indenture Act; and the Indenture conforms to the
description thereof contained in the Prospectus.
(xi) The Securities have been duly authorized by the Company, and
when executed, authenticated, issued and delivered in the manner
provided for in the Indenture and sold and paid for as provided in this
Agreement, the Securities will constitute valid and binding obligations
of the Company entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except to the extent
that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors'
rights generally and by general principles of equity; and the Securities
conform to the description thereof contained in the Prospectus.
(xii) No consent, approval or authorization, and no order,
registration or qualification of or with any natural person,
corporation, partnership, trust, firm, association or other entity,
whether acting in an individual, fiduciary or other capacity ("Person"),
or any court or government agency or body, is required for the issuance
of the Securities or for the consummation of the other transactions
contemplated by this Agreement, except such as have been obtained and
made under the Act, the Trust Indenture Act or the Rules and Regulations
and such as may be required under state securities laws in connection
with the offer and sale of the Securities.
(xiii) The execution, delivery and performance of the Indenture and
this Agreement and the consummation of the transactions herein and
therein contemplated have been duly authorized by all necessary
corporate action on the part of the Company and its Subsidiaries and
will not (A) contravene any provision of the charter or by-laws of the
Company or any of its Subsidiaries, or (B) conflict with or result in a
breach or violation of any of the terms and provisions of, or constitute
a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any assets or property of the Company or any
of its Subsidiaries under, any statute, rule, regulation, order or
decree of any governmental agency or body or any court having
jurisdiction over the Company or any of its Subsidiaries or any of their
properties or any indenture, mortgage, loan agreement, note, lease,
permit, license or other agreement or instrument to which the Company or
any such Subsidiary is bound or to which any of the properties of the
Company or any such Subsidiary is subject, except, in the case of clause
(B), as would not, singly or in the aggregate, have a material adverse
effect on the condition (financial or other), business, prospects,
results of operations or general affairs of the Company and its
Subsidiaries, taken as a whole, or on the transactions contemplated by
this Agreement and the Indenture; and the Company has full power and
authority to authorize, issue and sell the Securities as contemplated by
this Agreement.
(xiv) (A) Neither the Company nor any of its Subsidiaries is in
violation of its charter or by-laws, (B) neither the Company nor any of
its Subsidiaries is in violation of any applicable law, ordinance,
administrative or governmental rule or regulation, or any order of any
court or governmental agency or body having jurisdiction over the
Company or any Subsidiary and (C) no event of default or event that, but
for the giving of notice or the lapse of time or both, would constitute
an event of default exists, or upon the use of proceeds from the sale of
the Securities in the manner contemplated by the description under the
caption "Use of Proceeds" contained in the Prospectus or upon the
consummation of the other transactions contemplated by the Prospectus
will exist, under any agreement or instrument for borrowed money, any
guarantee of any agreement or instrument for borrowed money or any
lease, permit, license or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or to which any of the
properties or assets of the Company or any such Subsidiary is subject,
<PAGE>
<PAGE> 5 EX-1
except, in the case of clauses (B) and (C), for such violations and
defaults that would not, singly or in the aggregate, have a material
adverse effect on the condition (financial or other), business,
prospects, results of operations or general affairs of the Company and
its Subsidiaries, taken as a whole.
(xv) The Company and its Subsidiaries have such permits, licenses,
franchises, consents, approvals, authorizations and clearances
("Licenses") and are in compliance with all applicable laws and
regulations of federal, state, local and foreign governmental or
regulatory authorities, as are necessary to own, lease or operate their
properties and to conduct their businesses in the manner described in
the Prospectus and all such Licenses are in full force and effect, in
each case except as would not, singly or in the aggregate, have a
material adverse effect on the condition (financial or other), business,
prospects, results of operations or general affairs of the Company and
its Subsidiaries, taken as a whole.
(xvi) The Company and its Subsidiaries have good and marketable
title to all properties (real and personal) owned by the Company and its
Subsidiaries, free and clear of all liens, claims, security interests or
other encumbrances that are material or that may interfere with the
conduct of the business of the Company and its Subsidiaries, taken as a
whole; all properties held under lease or sublease by the Company and
its Subsidiaries are held under valid, subsisting and enforceable leases
or subleases with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property by
the Company and its Subsidiaries; neither the Company nor any of its
Subsidiaries is in default under any such lease or sublease, except for
defaults which are not material and will not interfere with the conduct
of the business of the Company and its Subsidiaries, taken as a whole;
and no material claim of any sort has been asserted by anyone adverse to
the rights of the Company or any Subsidiary under any such lease or
subleases or affecting or questioning the right of such entity to the
continued possession of the leased or subleased properties under any
such lease or sublease.
(xvii) The Company and its Subsidiaries carry or are entitled to the
benefits of insurance, including, without limitation, product liability
and business interruption insurance, in such amounts and covering such
risks as the Company reasonably believes is generally maintained by
companies of established repute engaged in the same or similar business,
and all such insurance is in full force and effect.
(xviii) The properties, assets and operations of the Company and its
Subsidiaries are in compliance in all material respects with all
applicable federal, state, local and foreign laws, rules and
regulations, orders, decrees, judgments, permits and licenses relating
to public and worker health and safety and to the protection and clean-
up of the natural environment and activities or conditions related
thereto, including, without limitation, those relating to the
generation, handling, disposal, transportation or release of hazardous
materials (collectively, "Environmental Laws"). With respect to such
properties, assets and operations, including any previously owned,
leased or operated properties, assets or operations there are no past,
present or, to the knowledge of the Company or any of its Subsidiaries,
reasonably anticipated future events, conditions, circumstances,
activities, practices, incidents, actions or plans of the Company or any
of its Subsidiaries that may interfere with or prevent compliance or
continued compliance with applicable Environmental Laws in any material
respect. Neither the Company nor any of its Subsidiaries is the subject
of any federal, state, local or foreign investigation, and neither the
Company nor any of its Subsidiaries has received any notice or claim (or
is aware of any facts that would form a reasonable basis for any claim),
or entered into any negotiations or agreements with any third party
<PAGE>
<PAGE> 6 EX-1
relating to any liability or remedial action or potential liability or
remedial action under Environmental Laws, nor are there any pending,
reasonably anticipated or, to the best knowledge of the Company or any
of its Subsidiaries, threatened actions, suits or proceedings against or
affecting the Company, any of its Subsidiaries or their properties,
assets or operations, in connection with any such Environmental Laws.
The term "hazardous materials" shall mean those substances that are
regulated by or form the basis for liability under any applicable
Environmental Laws.
(xix) There are no pending actions, suits or proceedings against or
affecting the Company, any of its Subsidiaries or any of their
properties that are required under the Act to be described in the
Registration Statement and the Prospectus (other than as described
therein) or that could, singly or in the aggregate, have a material
adverse effect on the condition (financial or other), business,
prospects, results of operations or general affairs of the Company and
its Subsidiaries, taken as a whole, or could have a material adverse
effect on the ability of the Company to perform its obligations under
this Agreement, the Indenture or the Securities, or that are otherwise
material in the context of the sale of the Securities; and, to the
Company's knowledge, no such actions, suits or proceedings are
threatened or contemplated.
(xx) The Company and its Subsidiaries own or possess all the
patents, trademarks, service marks, trade names, copyrights, licenses
and rights with respect thereto (collectively, "Intellectual Property")
necessary for the conduct of their businesses as described in the
Prospectus, except where the failure to own or possess the same would
not, singly or in the aggregate, have a material adverse effect on the
condition (financial or other), business, prospects, results of
operations or general affairs of the Company and its Subsidiaries, taken
as a whole; and to the knowledge of the Company and its Subsidiaries, no
conflict with the rights of others exists with respect to any such
Intellectual Property.
(xxi) The Company and its Subsidiaries have filed all federal,
state, local and foreign tax returns required to be filed, such returns
are complete and correct in all material respects, and all taxes shown
by such returns or otherwise assessed or due and payable have been paid,
except such taxes as are being contested in good faith and as to which
adequate reserves have been provided. The charges, accruals and
reserves on the books of the Company and its Subsidiaries in respect of
any tax liability for any year not finally determined are adequate to
meet any assessments or reassessments for additional taxes, and there
has been no tax deficiency asserted and, to the knowledge of the Company
and its Subsidiaries, no tax deficiency might be asserted against the
Company or any of its Subsidiaries, except for such inadequacies or
deficiencies that could not, singly or in the aggregate, have a material
adverse effect on the condition (financial or other), business,
prospects, results of operations or general affairs of the Company and
its Subsidiaries, taken as a whole.
(xxii) There are no contracts, agreements or understandings between
the Company and any person entitling such person to any fee, commission
or payment from the Company in connection with the Securities to be sold
by the Company, other than the compensation due and payable to the
Underwriter as described in the Prospectus.
(xxiii) The Flexitrust (as defined in the Prospectus) has been duly
authorized by all necessary corporate action on the part of the Company
and its Subsidiaries. Neither the establishment and maintenance of the
Flexitrust nor the consummation of the transactions contemplated by the
Flexitrust will (A) contravene any provision of the charter or by-laws
of the Company or any of its Subsidiaries or (B) conflict with or result
<PAGE>
<PAGE> 7 EX-1
in a breach or violation of any of the terms and provisions of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any assets or property of the
Company or any of its Subsidiaries under, any statute, rule, regulation,
order or decree of any governmental agency or body or any court having
jurisdiction over the Company or any of its Subsidiaries or any of their
properties or any indenture, mortgage, loan agreement, note, lease,
permit, license or other agreement or instrument to which the Company or
any such Subsidiary is bound or to which any of the properties of the
Company or any such Subsidiary is subject, except, in the case of clause
(B), as would not, singly or in the aggregate, have a material adverse
effect on the condition (financial or other), business, prospects,
results of operations or general affairs of the Company and its
Subsidiaries, taken as a whole.
(xxiv) No labor disturbance by the employees of the Company exists,
or to the knowledge of the Company, is threatened, that could, singly or
in the aggregate, have a material adverse effect on the condition
(financial or other), business, prospects, results of operations or
general affairs of the Company and its Subsidiaries, taken as a whole.
(xxv) The financial statements and related schedules and notes
included or incorporated by reference in the Registration Statement and
the Prospectus comply, in all material respects, with the requirements
of the Act and the Rules and Regulations, were prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved and fairly present the financial
condition and results of operations of the Company and its Subsidiaries,
on a consolidated basis, at the dates and for the periods presented.
The financial information and statistical data set forth in the
Prospectus under the captions "Selected Financial Data" and
"Capitalization" are fairly stated in all material respects in relation
to the consolidated financial statements of the Company from which they
have been derived.
(xxvi) Since the dates as of which information is given in the
Registration Statement and the Prospectus, (A) neither the Company nor
its Subsidiaries has incurred any material liability or obligation
(indirect, direct or contingent) or entered into any material verbal or
written agreement or other transaction that is not in the ordinary
course of business or that could result in a material reduction in the
future earnings of the Company; (B) neither the Company nor its
Subsidiaries has sustained any material loss or interference with its
business or properties from fire, flood, windstorm, accident or other
calamity (whether or not covered by insurance); (C) there has been no
change in the indebtedness of the Company and, except as contemplated by
the Prospectus, no change in the capital stock of the Company and no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock; and (D) there has been no
material adverse change, nor any development reasonably likely to result
in a material adverse change, in the condition (financial or other),
business, prospects, results of operations or general affairs of the
Company and its Subsidiaries, taken as a whole.
(xxvii) On the date the registration statement was first filed with
the Commission, and at the Effective Time, the Company met the
conditions for use of Form S-3 under the Act and the Rules and
Regulations.
(xxviii) The Company has complied, and will continue to comply, with
all provisions of Section 517.075, Florida Statutes (Chapter 92-198,
Laws of Florida), and the regulations thereunder.
(xxix) The Company has obtained the written agreement of each
director and executive officer of the Company, in form reasonably
<PAGE>
<PAGE> 8 EX-1
satisfactory to the Underwriter, that such persons will not, directly or
indirectly, issue, offer, sell, contract to sell, grant any option to
purchase, hypothecate or otherwise dispose or cause the disposition of,
any shares of Common Stock or any security convertible into or
exchangeable or exercisable for Common Stock, for a period of 90 days
after the commencement of the public offering of the Securities by the
Underwriter, without the prior written consent of the Underwriter.
(b) The Company hereby acknowledges and agrees with the
Underwriter that, for all purposes of this Agreement and the transactions
herein contemplated, the only information furnished to the Company by the
Underwriter specifically for use in the Registration Statement, the
Prospectus or any amendment or supplement thereto, or any related preliminary
prospectus, are (i) the statements with respect to stabilization appearing on
the inside front cover page of the preliminary prospectus and the Prospectus,
(ii) the first sentence of the last paragraph of text appearing on the front
cover page of the preliminary prospectus and the Prospectus and (iii) the
information appearing in the preliminary prospectus and the Prospectus in the
fourth paragraph under the caption "Underwriting."
3. Purchase, Sale and Delivery of Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, at a
purchase price of _____% of the principal amount thereof plus accrued
interest, if any, from __________, 1994 to the First Closing Date (as defined
below), the Firm Securities.
The Company will deliver the Firm Securities to you for the account
of the Underwriter, against payment of the purchase price by certified or
official bank check in New York Clearing House (next day) funds drawn to the
order of the Company at the offices of Dewey Ballantine, 1301 Avenue of the
Americas, New York, New York, at 10:00 A.M., New York time, on _________,
1994, or at such other time not later than seven full business days
thereafter as you and the Company determine, such time and date being herein
referred to as the "First Closing Date". The Securities so to be delivered
will be in definitive fully registered form, in such denominations and
registered in such names as you request and will be made available for
checking and packaging at the offices of CS First Boston Corporation, Park
Avenue Plaza, New York, New York 10055 at least 24 hours prior to the Closing
Date.
In addition, upon written notice from you given to the Company not
more than 30 days subsequent to the date of the initial public offering of
the Securities, the Underwriter may purchase all or less than all of the
Option Securities at a purchase price of _____% of the principal amount
thereof plus accrued interest, if any, from _______________ __, 1994 to the
Second Closing Date (as defined below). The Company agrees to sell to the
Underwriter the principal amount of Option Securities specified in such
notice and the Underwriter agrees to purchase such Option Securities. Such
Option Securities may be purchased by the Underwriter only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Option Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered.
The right to purchase the Option Securities or any portion thereof may be
surrendered and terminated at any time upon notice by you to the Company.
The time for the delivery of and payment for the Option Securities,
being herein referred to as the "Second Closing Date" (which date may be the
same as the First Closing Date), shall be determined by you but shall be not
later than seven full business days after notice of election to purchase
Option Securities is given. The Company will deliver the Option Securities
to you against payment of the purchase price therefor by certified or
<PAGE>
<PAGE> 9 EX-1
official bank check in New York Clearing House (next day) funds drawn to the
order of the Company at the above office of Dewey Ballantine. The Option
Securities will be in definitive fully registered form, in such denominations
and registered in such names as you request upon reasonable notice prior to
the Second Closing Date and will be made available for checking and packaging
at the office of CS First Boston Corporation at a reasonable time in advance
of the Second Closing Date.
4. Offering by Underwriter. It is understood that the Underwriter
proposes to offer the Securities for sale to the public as set forth in the
Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
Underwriter that:
(a) If the Effective Time is prior to the execution and delivery
of this Agreement, the Company will file the Prospectus with the
Commission pursuant to and in accordance with subparagraph (1) (or, if
applicable and if consented to by you, subparagraph (4)) of Rule 424(b)
not later than the earlier of (A) the second business day following the
execution and delivery of this Agreement or (B) the fifth business day
after the Effective Date. The Company will advise you promptly of any
such filing pursuant to Rule 424(b).
(b) The Company will advise you promptly of any proposal to amend
or supplement the registration statement as filed or the related
prospectus or the Registration Statement or the Prospectus and will not
effect such amendment or supplementation without your prior consent,
which consent shall not be unreasonably withheld; and the Company will
also advise you promptly of the effectiveness of the Registration
Statement (if the Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplementation of
the Registration Statement or the Prospectus and of the institution by
the Commission of any stop order proceedings in respect of the
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(c) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs or a
condition exists as a result of which it is necessary, in the reasonable
opinion of counsel to the Underwriter or counsel to the Company, to
amend the Registration Statement or amend or supplement the Prospectus
in order that the Prospectus would not include 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, or if it is necessary, in the reasonable
opinion of either such counsel, at any time to amend the Registration
Statement or amend or supplement the Prospectus to comply with the Act,
the Company promptly will prepare and file with the Commission an
amendment or supplement that will correct such statement or omission or
an amendment that will effect such compliance. Neither your consent to,
nor the Underwriter's delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section
6 of this Agreement.
(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to
its securityholders an earnings statement covering a period of at least
12 months beginning after the Effective Date that will satisfy the
provisions of Section 11(a) of the Act and Rule 158 thereunder. For the
purpose of the preceding sentence, "Availability Date" means the 45th
day after the end of the fourth fiscal quarter following the fiscal
quarter that includes the Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
<PAGE>
<PAGE> 10 EX-1
(e) The Company will furnish to you copies of the Registration
Statement (at least two of which will be signed and will include all
exhibits and a signed accountant's report of Deloitte & Touche), each
related preliminary prospectus, the Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in
such quantities as you reasonably request.
(f) The Company will arrange for the qualification of the
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as you designate and
will continue such qualifications in effect so long as required for the
distribution thereof.
(g) During the period of five years hereafter, the Company will
furnish to you, as soon as practicable after the end of each fiscal
year, a copy of its annual report to stockholders for such year; and the
Company will furnish to you (i) as soon as available, a copy of each
report or definitive proxy statement of the Company filed with the
Commission under the Securities Exchange Act of 1934, as amended, or
mailed to stockholders and (ii) from time to time, such other
information concerning the Company as you may reasonably request.
(h) Other than pursuant to this Agreement or upon conversion of
the Securities or pursuant to employee benefit plans (including stock
option plans) in accordance with the terms thereof in existence on the
date hereof, the Company will not, directly or indirectly, issue, offer,
sell, contract to sell, grant any option to purchase, hypothecate or
otherwise dispose or cause the disposition of, or file a registration
statement under the Act relating to, any shares of Common Stock or any
security convertible into or exchangeable or exercisable for Common
Stock, for a period of 90 days after the commencement of the public
offering of the Securities by the Underwriter, without the prior written
consent of the Underwriter.
The Company agrees with the Underwriter that the Company will pay
all expenses incident to the performance of its obligations under this
Agreement, and will reimburse the Underwriter for any expenses (including
reasonable fees and disbursements of counsel) incurred by it in connection
with the qualification of the Securities for sale under the laws of such
jurisdictions as you designate and the printing of memoranda relating
thereto, for the filing fee of and the related reasonable fees and expenses
of counsel for the Underwriter in connection with any filings required to be
made with the National Association of Securities Dealers, Inc. relating to
the Securities, any fees charged by investment rating agencies for the rating
of the Securities and for expenses incurred in printing and distributing the
Registration Statement, preliminary prospectuses and the Prospectus
(including any amendments and supplements thereto) or related documents.
6. Conditions of the Obligations of the Underwriter. The
obligations of the Underwriter to purchase and pay for the Firm Securities on
the First Closing Date and the Option Securities on the Second Closing Date
will be subject to the accuracy of the representations and warranties on the
part of the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional
conditions precedent:
(a) You shall have received a letter, dated the date of delivery
thereof (which, if the Effective Time is prior to the execution and
delivery of this Agreement, shall be on or prior to the date of this
Agreement or, if the Effective Time is subsequent to the execution and
delivery of this Agreement, shall be prior to the filing of the
<PAGE>
<PAGE> 11 EX-1
amendment or post-effective amendment to the registration statement to
be filed shortly prior to the Effective Time), of Deloitte & Touche
confirming that they are independent public accountants within the
meaning of the Act and the applicable published Rules and Regulations
thereunder and stating in effect that:
(i) in their opinion the financial statements and schedules
examined by them and included or incorporated by reference in the
Registration Statement comply in form in all material respects with
the applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) they have made a review of the unaudited financial
statements included or incorporated by reference in the
Registration Statement in accordance with standards established by
the American Institute of Certified Public Accountants, as
indicated in their report attached to such letter;
(iii)on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial
statements of the Company, a reading of the minutes of all meetings
of the stockholders and directors (including each committee
thereof) of the Company and its Subsidiaries, inquiries of
officials of the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) the unaudited financial statements included or
incorporated by reference in the Registration Statement do not
comply in form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included or incorporated by reference in the
Registration Statement;
(B) the information set forth under the caption
"Selected Financial Data" in the Prospectus does not agree
with the amounts set forth in the financial statements from
which it was derived or was not determined on a basis
substantially consistent with that of the corresponding
amounts in the audited financial statements included or
incorporated by reference in the Registration Statement;
(C) at the date of the latest available balance sheet
read by such accountants, and at a subsequent specified date
not more than five days prior to the date of such letter,
there was any decrease in stockholders' equity or change in
the capital stock or any increase in short-term indebtedness
or long-term debt of the Company and its consolidated
Subsidiaries or, at the date of the latest available balance
sheet read by such accountants, there was any decrease in
consolidated net current assets or total assets, as compared
with amounts shown on the latest balance sheet included in the
Prospectus; or
(D) for the period from the closing date of the latest
income statement included or incorporated by reference in the
Prospectus to the closing date of the latest available income
statement read by such accountants there were any decreases,
as compared with the corresponding period of the previous year
and with the period of corresponding length ended the date of
<PAGE>
<PAGE> 12 EX-1
the latest income statement included or incorporated by
reference in the Prospectus, in merchandise sales, service
revenue, total gross profit or operating profit or in the
total or per share amounts of net earnings, or any increases
or decreases, as the case may be, in other items specified by
the Underwriter;
except in all cases set forth in clauses (C) and (D) above for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter;
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts), numerical data and
other financial information contained in the Registration Statement
(in each case to the extent that such dollar amounts, percentages,
numerical data and other financial information are derived from the
general accounting records of the Company and its Subsidiaries
subject to the internal controls of the Company's accounting system
or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages,
numerical data and other financial information to be in agreement
with such results.
For purposes of this subsection, if the Effective Time is
subsequent to the execution and delivery of this Agreement, "Registration
Statement" shall mean the registration statement as proposed to be amended by
the amendment or post-effective amendment to be filed shortly prior to the
Effective Time, and "Prospectus" shall mean the prospectus included in the
Registration Statement. All financial statements and schedules included in
material incorporated by reference into the Prospectus shall be deemed
included in the Registration Statement for purposes of this subsection.
(b) If the Effective Time is not prior to the execution and
delivery of this Agreement, the Effective Time shall have occurred not
later than 10:00 P.M., New York time, on the date of this Agreement or
such later date as shall have been consented to by you. If the Effective
Time is prior to the execution and delivery of this Agreement, the
Prospectus shall have been filed with the Commission in accordance with
the Rules and Regulations and Section 5(a) of this Agreement. On or
prior to such Closing Date, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or you, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting particularly the
business or properties of the Company or any of its Subsidiaries that,
in the judgment of the Underwriter, materially impairs the investment
quality of the Securities; (ii) any downgrading in the rating of any
debt securities of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Company
(other than an announcement with positive implications of a possible
upgrading, and no implications of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by Federal or New York
<PAGE>
<PAGE> 13 EX-1
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress
or any other substantial national or international calamity or emergency
if, in the judgment of the Underwriter, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the sale of and payment for
the Securities.
(d) You shall have received an opinion, dated such Closing Date,
of Willkie Farr & Gallagher, counsel for the Company, to the effect
that:
(i) Each of the Company and its Subsidiaries has been duly
incorporated and is a validly existing corporation in good
standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own,
lease and operate its properties and conduct its business as
described in the Prospectus; and each of the Company and its
Subsidiaries is duly qualified to transact business as a
foreign corporation in good standing in all other
jurisdictions in which it owns, leases or operates property or
in which the conduct of its business requires such
qualification, except to the extent that the failure to be so
qualified or in good standing would not have a material
adverse effect on the Company and its Subsidiaries, taken as a
whole; and all of the outstanding shares of capital stock of
the Company's Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and are
owned by the Company, directly or through Subsidiaries, free
and clear, to the knowledge of such counsel after reasonable
inquiry, of any mortgage, pledge, lien, claim, security
interest or other encumbrance.
(ii) The authorized and outstanding shares of capital stock of the
Company are as set forth in the Prospectus under the caption
"Capitalization"; and the stockholders of the Company have no
preemptive or similar rights with respect to the capital stock
or any other securities of the Company.
(iii)The Securities are convertible into Common Stock in accordance
with the terms of the Indenture; the shares of Common Stock
issuable upon conversion of the Securities have been duly
authorized and reserved for issuance upon such conversion and,
when issued upon such conversion, will be validly issued,
fully paid and non-assessable and will conform to the
description thereof contained in the Prospectus.
(iv) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the legal, valid and
binding obligation of the Company enforceable against the
Company in accordance with its terms, except to the extent
that (A) enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally and by general
principles of equity and (B) rights to indemnity and
contribution may be limited by federal or state securities
laws or policies underlying such laws.
(v) The Indenture has been duly authorized, executed and delivered
by the Company and has been duly qualified under the Trust
Indenture Act and, assuming due authorization, execution and
delivery by the Trustee, constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency,
<PAGE>
<PAGE> 14 EX-1
reorganization, moratorium or other similar laws relating to
creditors' rights generally and by general principles of
equity; and the Securities have been duly authorized, executed
and (assuming they have been duly authenticated in accordance
with the terms of the Indenture) issued, constitute legal,
valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms entitled to
the benefits provided by the Indenture, except to the extent
that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
creditors' rights generally and by general principles of
equity; and the Indenture and the Securities conform to the
descriptions thereof contained in the Prospectus.
(vi) No consent, approval or authorization, and no order,
registration or qualification of or with any Person or any
court or governmental agency or body is required for the
issuance of the Securities sold by the Company or for the
consummation of the other transactions contemplated by this
Agreement, except such as have been obtained and made under
the Act, the Trust Indenture Act or the Rules and Regulations
and such as may be required under state securities laws in
connection with the offer and sale of the Securities.
(vii) The execution, delivery and performance of the Indenture and
this Agreement and the consummation of the transactions herein
and therein contemplated have been duly authorized by all
necessary corporate action on the part of the Company and its
Subsidiaries and will not (A) contravene any provision of the
charter or by-laws of the Company or any of its Subsidiaries,
or (B) conflict with or result in a breach or violation of any
of the terms and provisions of, or constitute a default under,
or result in the creation or imposition or encumbrance upon
any assets or property of the Company or any of its
Subsidiaries under, any statute, rule, regulation, order or
decree of any governmental agency or body or any court having
jurisdiction over the Company or any of its Subsidiaries or
any of their properties, or any indenture, mortgage, loan
agreement, note, lease, permit, license or other agreement or
instrument known to such counsel after reasonable inquiry to
which the Company or any such Subsidiary is bound or to which
any of the properties of the Company or any such Subsidiary is
subject, except, in the case of clause (B), as would not,
singly or in the aggregate, have a material adverse effect on
the condition (financial or other), business, prospects,
results of operations or general affairs of the Company and
its Subsidiaries, taken as a whole, or on the transactions
contemplated by this Agreement and the Indenture; and the
Company has full power and authority to authorize, issue and
sell the Securities as contemplated by this Agreement.
(viii) Neither the Company nor any of its Subsidiaries is in
violation of its charter or by-laws or, to the knowledge of
such counsel after reasonable inquiry, any applicable law,
ordinance, administrative or governmental rule or regulation,
or any order of any court or governmental agency or body
having jurisdiction over the Company or any Subsidiary or, to
<PAGE>
<PAGE> 15 EX-1
the knowledge of such counsel after reasonable inquiry, in
default in the performance or observance of any material
obligation, agreement or condition in any agreement or
instrument to which the Company or any of its Subsidiaries is
a party or to which any of the properties or assets of the
Company or any such Subsidiary is subject.
(ix) To the knowledge of such counsel after reasonable inquiry,
there are no pending or threatened actions, suits or
proceedings against or affecting the Company, any of the
Subsidiaries or any of their properties that are required
under the Act to be described in the Registration Statement
and the Prospectus (other than as described therein) or that
could have a material effect on the ability of the Company to
perform its obligations under this Agreement, the Indenture or
the Securities, or that are otherwise material in the context
of the sale of the Securities.
(x) To the knowledge of such counsel after reasonable inquiry,
there are no contracts, agreements or understandings between
the Company and any third party granting such third party the
right to require the Company to file a registration statement
under the Act with respect to any securities of the Company
owned or to be owned by such third party or to require the
Company to include such securities in the securities
registered pursuant to the Registration Statement or in any
other securities being registered pursuant to any other
registration statement filed by the Company under the Act.
(xi) The descriptions in the Registration Statement and the
Prospectus of contracts and other documents are accurate and
fairly present the information required to be shown; and such
counsel does not know of any statutes, regulations or legal or
governmental proceedings required to be described in the
Registration Statement or the Prospectus that are not
described as required or that could materially and adversely
affect the ability of the Company to perform its obligations
under the Indenture, the Securities or this Agreement, or of
any contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement that are
not described and filed as required; it being understood that
such counsel need express no opinion as to the financial
statements or other financial data contained in the
Registration Statement or the Prospectus.
(xii) The Registration Statement was declared effective under the
Act as of the date and time specified in such opinion, the
Prospectus either was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified in such opinion on
the date specified therein or was included in the Registration
Statement (as the case may be) and, to the knowledge of such
counsel after reasonable inquiry, no stop order suspending the
effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the
Act.
(xiii) The Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective
effective or issue dates and as of such Closing Date, complied
as to form in all material respects with the requirements of
the Act, the Trust Indenture Act and the Rules and
Regulations; and such counsel have no reason to believe that
either the Registration Statement at the time the Registration
Statement became effective contained an untrue statement of a
<PAGE>
<PAGE> 16 EX-1
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus or any
amendment or supplement thereto, as of their respective dates
and as of the Closing Date, as the case may be, contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated in the Prospectus or
necessary in order to make the statements in the Prospectus,
in light of the circumstances under which they were made, not
misleading; it being understood that such counsel need express
no opinion as to the financial statements or other financial
data contained in the Registration Statement or the
Prospectus.
(e) You shall have received from Dewey Ballantine, counsel for the
Underwriter, such opinion or opinions, dated such Closing Date, with
respect to the validity of the Securities, the Registration Statement,
the Prospectus and other related matters as you may require, and the
Company shall have furnished to such counsel such documents or
certificates as they reasonably request for the purpose of enabling them
to pass upon such matters.
(f) You shall have received a certificate, dated such Closing
Date, of the President and the principal financial officer of the
Company in which such officers, to the best of their knowledge after
reasonable investigation, shall state that (A) the representations and
warranties of the Company in this Agreement are true and correct, (B)
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to such Closing Date, (C) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated by
the Commission, (D) they have carefully examined the Registration
Statement and the Prospectus and neither the Registration Statement nor
the Prospectus or any amendment or supplement thereto, (i) as of the
Effective Time, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (ii) as of
their respective issue dates and as of such Closing Date, contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading and (E) subsequent to the dates as of which information is
given in the Registration Statement and the Prospectus, there has been
no material adverse change, nor any development reasonably likely,
singly or in the aggregate, to result in a material adverse change, in
the condition (financial or other), business, prospects, results of
operations or general affairs of the Company and its Subsidiaries, taken
as a whole.
(g) You shall have received a letter, dated such Closing Date, of
Deloitte & Touche that meets the requirements of subsection (a) of this
Section, except that the specified date referred to in such subsection
will be a date not more than five days prior to such Closing Date for
the purposes of this subsection.
All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel. The Company will
furnish you with such conformed copies of such opinions, certificates,
letters and documents as you reasonably request.
7. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless the Underwriter against any losses, claims,
damages or liabilities, joint or several, to which the Underwriter may become
<PAGE>
<PAGE> 17 EX-1
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action
as such expenses are incurred; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information
furnished to the Company by the Underwriter specifically for use therein; and
provided, further, that with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of the Underwriter to the extent that any such loss, claim, damage or
liability of the Underwriter results from the fact that there was not sent or
given to such person, if required by law, at or prior to the written
confirmation of the sale of such Securities to the person asserting any such
loss, claim, damage or liability, a copy of the Prospectus (exclusive of
material incorporated by reference therein) if the Company had previously
furnished copies thereof in requisite quantities to the Underwriter.
(b) The Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by the Underwriter specifically
for use therein, and will reimburse any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying
party under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above, except to the extent
that the omission so to notify the indemnifying party actually prejudices the
indemnifying party's ability to defend the action. In case any such action
is brought against any indemnified party and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
<PAGE>
<PAGE> 18 EX-1
could have been a party and indemnity could have been sought hereunder by
such indemnified party unless such settlement includes an unconditional
release of such indemnified party from all liability on any claims that are
the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then the indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriter on the
other from the offering of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one hand
and the Underwriter on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriter on the other
shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriter.
The relative fault 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 or the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount
of any damages which the Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls the Underwriter within the meaning of the Act; and the obligations
of the Underwriter under this Section shall be in addition to any liability
which the Underwriter may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed the Registration Statement and to each person, if any,
who controls the Company within the meaning of the Act.
8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and the Underwriter set forth in or
made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made
by or on behalf of the Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Securities. If for any reason the
purchase of the Securities by the Underwriter is not consummated, the Company
shall remain responsible for the expenses to be paid or reimbursed by them
pursuant to Section 5 and the respective obligations of the Company and the
Underwriter under Section 7 shall remain in effect. If the purchase of the
<PAGE>
<PAGE> 19 EX-1
Securities by the Underwriter is not consummated for any reason other than
solely because of the default by the Underwriter of its obligations hereunder
or the occurrence of any event specified in clause (iii), (iv) or (v) of
Section 6(c), the Company will reimburse the Underwriter for all
out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by it in connection with the offering of the Securities.
9. Notices. All communications hereunder will be in writing and,
if sent to the Underwriter, will be mailed, delivered or telegraphed and
confirmed to CS First Boston Corporation, Park Avenue Plaza, New York, N.Y.
10055, Attention: Investment Banking Department - New Issue Processing
Group, or, if sent to the Company, will be mailed, delivered or telegraphed
and confirmed to it at The Pep Boys - Manny, Moe and Jack, 3111 West
Allegheny Avenue, Philadelphia, Pennsylvania, 19132, Attention: Chief
Financial Officer.
10. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective personal
representatives and successors and the officers and directors and controlling
persons referred to in Section 7, and no other person will have any right or
obligation hereunder.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
12. Applicable Law; Consent to Jurisdiction. This Agreement shall
be governed by, and construed in accordance with, the laws of the State of
New York. The Company hereby consents to personal jurisdiction in the State
of New York and voluntarily submits to the jurisdiction of the courts of such
State in any proceeding with respect to this Agreement, including federal
district courts located in such State.
<PAGE>
<PAGE> 20 EX-1
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement among the Company and the
Underwriter in accordance with its terms.
Very truly yours,
THE PEP BOYS - MANNY, MOE AND JACK
By________________________________
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
CS FIRST BOSTON CORPORATION
By_____________________________
Name:
Title:
<PAGE>
<PAGE> 21 EX-1
SCHEDULE A
Subsidiaries of the Company
---------------------------
PBY Corporation
The Pep Boys - Manny, Moe and Jack of California
<PAGE>
<PAGE>
<PAGE> 1 EX-4.1
DB Draft of August 16, 1994
============================================================================
THE PEP BOYS - MANNY, MOE & JACK
Issuer
to
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
Trustee
Indenture
Dated as of ________________, 1994
$_______________*
__% Convertible Subordinated Notes Due 1999
============================================================================
*Subject to increase up to $___________.
<PAGE>
<PAGE> 2 EX-4.1
THE PEP BOYS - MANNY, MOE & JACK
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture dated as of _________, 1994.
Trust Indenture Indenture
Act Section Section
* 310(a)(1).....................................609
(a)(2).....................................609
(a)(3).....................................Not Applicable
(a)(4).....................................Not Applicable
(a)(5).....................................609
(b)........................................608
(c)........................................Not Applicable
610
* 311(a)........................................613
(b)........................................613
(b)(2).....................................613
(c)........................................Not Applicable
* 312(a)........................................701
702(a)
(b)........................................702(b)
(c)........................................702(b)
* 313(a)........................................703(a)
(b)........................................703(b)
(c)........................................703(a)
(d)........................................703(b)
* 314(a)........................................704; 1004
(b)........................................Not Applicable
(c)(1).....................................102
(c)(2).....................................102
(c)(3).....................................Not Applicable
(d)........................................Not Applicable
(e)........................................102
(f)........................................Not Applicable
* 315(a)........................................601(a)
(b)........................................602
703
(c)........................................601(b)
(d)........................................601(c)
(d)(1).....................................601(c)(1)
(d)(2).....................................601(c)(2)
(d)(3).....................................601(c)(3)
(e)........................................514
* 316(a)(1)(A)..................................512
(a)(1)(B)..................................513
(a)(2).....................................Not Applicable
(b)........................................508
(c)........................................114
<PAGE>
<PAGE> 3 EX-4.1
* 317(a)(1).....................................503
(a)(2).....................................504
(b)........................................1003
* 318(a)........................................107
- -------------------
Note:This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE>
<PAGE> 4 EX-4.1
THE PEP BOYS - MANNY, MOE & JACK
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION................................... 1
SECTION 101. Definitions.......................................... 1
SECTION 102. Compliance Certificates and Opinions................. 7
SECTION 103. Form of Documents Delivered to Trustee............... 7
SECTION 104. Acts of Holders...................................... 8
SECTION 105. Notices, Etc., to Trustee and Company................ 9
SECTION 106. Notice to Holders; Waiver............................ 9
SECTION 107. Conflict with Trust Indenture Act.................... 9
SECTION 108. Effect of Headings and Table of Contents............. 9
SECTION 109. Successors and Assigns............................... 10
SECTION 110. Separability Clause.................................. 10
SECTION 111. Benefits of Indenture................................ 10
SECTION 112. Governing Law........................................ 10
SECTION 113. Legal Holidays....................................... 10
SECTION 114. Record Date for Vote or Consent of Holders........... 10
SECTION 115. Incorporators, Stockholders, Officers and Directors
of the Company Exempt from Individual Liability...... 11
ARTICLE TWO FORM OF SECURITIES....................................... 11
SECTION 201. Forms Generally...................................... 11
SECTION 202. Form of Face of Security............................. 11
SECTION 203. Form of Reverse of Security.......................... 13
SECTION 204. Form of Trustee's Certificate of Authentication...... 16
SECTION 205. Form of Election to Convert.......................... 16
SECTION 206. Form of Option of Holder to Elect Purchase........... 17
ARTICLE THREE THE SECURITIES........................................... 18
SECTION 301. Title and Terms...................................... 18
SECTION 302. Denominations........................................ 19
SECTION 303. Execution, Authentication, Delivery and Dating....... 19
SECTION 304. Temporary Securities................................. 19
SECTION 305. Registration, Registration of Transfer and Exchange.. 19
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities..... 20
SECTION 307. Payment of Interest; Interest Rights Preserved....... 21
SECTION 308. Persons Deemed Owners................................ 22
SECTION 309. Cancellation......................................... 22
SECTION 310. Computation of Interest.............................. 22
ARTICLE FOUR SATISFACTION AND DISCHARGE............................... 23
SECTION 401. Satisfaction and Discharge of Indenture.............. 23
SECTION 402. Application of Trust Money........................... 23
<PAGE>
<PAGE> 5 EX-4.1
ARTICLE FIVE REMEDIES................................................. 24
SECTION 501. Events of Default.................................... 24
SECTION 502. Acceleration of Maturity, Rescission and Annulment... 25
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee............................... 26
SECTION 504. Trustee May File Proofs of Claim..................... 27
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities........................................... 27
SECTION 506. Application of Money Collected....................... 27
SECTION 507. Limitation on Suits.................................. 28
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest and to Convert....... 28
SECTION 509. Restoration of Rights and Remedies................... 29
SECTION 510. Rights and Remedies Cumulative....................... 29
SECTION 511. Delay or Omission Not Waiver......................... 29
SECTION 512. Control by Holders................................... 29
SECTION 513. Waiver of Past Defaults.............................. 29
SECTION 514. Undertaking for Costs................................ 30
SECTION 515. Waiver of Stay or Extension Laws..................... 30
ARTICLE SIX THE TRUSTEE.............................................. 30
SECTION 601. Certain Duties and Responsibilities.................. 30
SECTION 602. Notice of Defaults................................... 31
SECTION 603. Certain Rights of Trustee............................ 32
SECTION 604. Not Responsible for Recitals or Issuance of
Securities........................................... 32
SECTION 605. May Hold Securities.................................. 33
SECTION 606. Money Held in Trust.................................. 33
SECTION 607. Compensation and Reimbursement....................... 33
SECTION 608. Disqualification; Conflicting Interest............... 33
SECTION 609. Corporate Trustee Required; Eligibility.............. 34
SECTION 610. Resignation and Removal; Appointment of Successor.... 34
SECTION 611. Acceptance of Appointment by Successor............... 35
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business............................................. 35
SECTION 613. Preferential Collection of Claims Against Company.... 36
SECTION 614. Appointment of Authenticating Agent.................. 36
ARTICLE SEVEN HOLDERS LISTS AND REPORTS BY TRUSTEE
AND COMPANY.............................................. 37
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.............................................. 37
SECTION 702. Preservation of Information, Communications to
Holders.............................................. 37
SECTION 703. Reports by Trustee................................... 38
SECTION 704. Reports by Company................................... 38
<PAGE>
<PAGE> 6 EX-4.1
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE........................................ 39
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms................................................ 39
SECTION 802. Successor Substituted for Company.................... 39
ARTICLE NINE SUPPLEMENTAL INDENTURES.................................. 40
SECTION 901. Supplemental Indentures Without Consent of Holders... 40
SECTION 902. Supplemental Indentures with Consent of Holders...... 40
SECTION 903. Execution of Supplemental Indentures................. 41
SECTION 904. Effect of Supplemental Indentures.................... 41
SECTION 905. Conformity with Trust Indenture Act.................. 41
SECTION 906. Reference in Securities to Supplemental Indentures... 41
ARTICLE TEN COVENANTS................................................ 42
SECTION 1001. Payment of Principal, Premium and Interest.......... 42
SECTION 1002. Maintenance of Office or Agency..................... 42
SECTION 1003. Money for Security Payments to be Held in Trust..... 42
SECTION 1004. Statements of Officers of Company as to Default..... 43
SECTION 1005. Existence........................................... 44
SECTION 1006. Maintenance of Properties........................... 44
SECTION 1007. Payment of Taxes and Other Claims................... 44
SECTION 1008. Further Instruments and Acts........................ 44
SECTION 1009. Waiver of Certain Covenants......................... 45
ARTICLE ELEVEN REDEMPTION OF SECURITIES................................. 45
SECTION 1101. Right of Redemption................................. 45
SECTION 1102. Applicability of Article............................ 45
SECTION 1103. Election to Redeem; Notice to Trustee............... 45
SECTION 1104. Selection by Trustee of Securities to Be Redeemed... 45
SECTION 1105. Notice of Redemption................................ 46
SECTION 1106. Deposit of Redemption Price......................... 46
SECTION 1107. Securities Payable on Redemption Date............... 47
SECTION 1108. Securities Redeemed in Part......................... 47
SECTION 1109. Conversion Arrangements on Call for Redemption...... 47
ARTICLE TWELVE CONVERSION OF SECURITIES................................. 48
SECTION 1201. Conversion Privilege and Conversion Price........... 48
SECTION 1202. Exercise of Conversion Privilege.................... 49
SECTION 1203. Fractions of Shares................................. 49
SECTION 1204. Adjustment of Conversion Price...................... 50
SECTION 1205. Notice of Adjustments of Conversion Price........... 55
SECTION 1206. Notice of Certain Corporate Activities.............. 56
SECTION 1207. Company to Reserve Common Stock..................... 56
SECTION 1208. Taxes on Conversions................................ 56
SECTION 1209. Covenant as to Common Stock......................... 56
SECTION 1210. Cancellation of Converted Securities................ 57
SECTION 1211. Provisions in Case of Consolidation, Merger......... 57
<PAGE>
<PAGE> 7 EX-4.1
SECTION 1212. Trustee Adjustment Disclaimer....................... 57
ARTICLE THIRTEEN SUBORDINATION OF SECURITIES............................. 58
SECTION 1301. Agreement to Subordinate by Company................. 58
SECTION 1302. Distribution on Dissolution, Liquidation and
Reorganization: Subrogation......................... 58
SECTION 1303. No Payment in Event of Default on Senior
Indebtedness........................................ 60
SECTION 1304. Payments Permitted.................................. 60
SECTION 1305. Authorization to Trustee to Effect Subordination.... 61
SECTION 1306. Notices to Trustee.................................. 61
SECTION 1307. Trustee as Holder of Senior Indebtedness............ 61
SECTION 1308. Modification of Terms of Senior Indebtedness........ 61
ARTICLE FOURTEEN RIGHT TO REQUIRE REPURCHASE............................. 62
SECTION 1401. Repurchase of Securities at Option of the Holder
upon Change of Control.............................. 62
SECTION 1402. Effect of Change of Control Purchase Notice......... 64
SECTION 1403. Deposit of Change of Control Purchase Price......... 65
SECTION 1404. Securities Purchased in Part........................ 65
SECTION 1405. Covenant to Comply with Securities Laws Upon
Purchase of Securities.............................. 65
ARTICLE FIFTEEN DEFEASANCE AND COVENANT DEFEASANCE....................... 65
SECTION 1501. Company's Option to Effect Defeasance or Covenant
Defeasance.......................................... 65
SECTION 1502. Defeasance and Discharge............................ 65
SECTION 1503. Covenant Defeasance................................. 66
SECTION 1504. Conditions to Defeasance or Covenant Defeasance..... 66
SECTION 1505. Deposited Money and U.S. Government Obligations to
be Held in Trust; Other Miscellaneous Provisions.... 68
SECTION 1506. Reinstatement....................................... 69
<PAGE>
<PAGE> 8 EX-4.1
INDENTURE, dated as of ____________________, 1994, between THE PEP
BOYS - MANNY, MOE & JACK, a Pennsylvania corporation (the "Company"), having
its principal office at 3111 West Allegheny Avenue, Philadelphia,
Pennsylvania 19132, and FIRST FIDELITY BANK, NATIONAL ASSOCIATION,
Philadelphia, Pennsylvania, as Trustee (the "Trustee").
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles;
(d) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(e) unless otherwise specifically stated herein, the words
"Article" and "Section" refer to an Article and Section, respectively,
of this Indenture.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act," when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
to act on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
<PAGE>
<PAGE> 9 EX-4.1
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the city of New
York, New York or the city of Philadelphia, Pennsylvania are authorized or
obligated by law or executive order to close.
"Called Securities" have the meaning specified in Section 1109.
"Capital Stock" means, with respect to any corporation, any and all
shares, interest, rights to purchase, warrants, options, participations or
other equivalents of or interests (however designated) in stock issued by
that corporation.
"Change of Control" means such time as (i) a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), (A)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than 50% of the total voting rights attaching to the then
outstanding voting capital stock of the Company or (B) has the right or the
ability by voting right, contract or otherwise to elect or designate for
election a majority of the entire Board of Directors; or (ii) (A) the Company
consolidates with or merges into any other Person or conveys, transfers or
leases all or substantially all of its assets to any Person or (B) any Person
merges into the Company, in either event pursuant to a transaction in which
voting capital stock of the Company representing more than 50% of the total
voting rights of the Company outstanding immediately prior to the
effectiveness thereof is reclassified or changed into or exchanged for cash,
securities or other property; provided that any consolidation, merger,
conveyance, transfer or lease between the Company and any of its Subsidiaries
(including, without limitation, the reincorporation of the Company in another
jurisdiction) shall be excluded from the operation of this clause (ii).
Notwithstanding the foregoing, a Change in Control shall not be deemed to
have occurred by virtue of the Company's or any of its employee benefit or
stock plans' filing (or being required to file after the lapse of time) a
Schedule 13D or 14D-1 (or any successor or similar schedule, form or report
under the Exchange Act) as a result of the Company's or any such plans'
becoming the beneficial owner of shares of capital stock of the Company
entitling such person to exercise a majority of the total voting power of all
shares of capital stock of the Company entitled to vote in ordinary
circumstances in elections of directors.
"Change of Control Notice" has the meaning specified in Section
1401.
"Change of Control Purchase Date" has the meaning specified in
Section 1401.
"Change of Control Purchase Price" has the meaning specified in
Section 1401.
"Change of Control Purchase Notice" has the meaning specified in
Section 1401.
"Closing Price" on any Trading Day with respect to the per share
price of Common Stock means the last reported sales price regular way or, in
case no such reported sale takes place on such Day, the average of the
reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if the Common Stock is not listed or admitted to
trading on such Exchange, on the principal national securities exchange on
<PAGE>
<PAGE> 10 EX-4.1
which the Common Stock is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on the Nasdaq
National Market or, if the Common Stock is not listed or admitted to trading
on any national securities exchange or the Nasdaq National Market, the
average of the closing bid and asked prices in the over-the-counter market as
furnished by any New York Stock Exchange member firm that is selected from
time to time by the Company for that purpose and is reasonably acceptable to
the Trustee.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution of this instrument such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event
of any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which is not subject to redemption by the Company. However,
subject to the provisions of Section 1211, shares issuable on conversions of
Securities shall include only shares of the class designated as Common Stock
of the Company at the date of this Indenture or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up
of the Company and which are not subject to redemption by the Company;
provided that if at any time there shall be more than one such resulting
class, the shares of each such class then so issuable shall be substantially
in the proportion which the total number of shares of such class resulting
from all such reclassifications bears to the total number of shares of all
such classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its
President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee
in Philadelphia, Pennsylvania, at which at any particular time its corporate
trust business shall be administered.
"Corporation" means a corporation, association, company,
joint-stock company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1503.
"Current Purchase" has the meaning specified in Section 1204.
"Current Purchase Expiration Time" has the meaning specified in
Section 1204.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1502.
"Event of Default" has the meaning specified in Section 501.
<PAGE>
<PAGE> 11 EX-4.1
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
including, for all purposes of this instrument, the provisions of the Trust
Indenture Act that are deemed to be a part of and govern this instrument.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Securities.
"Maturity," when used with respect to any Security, means the date
on which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Non-Payment Default" means, at any time when the Company has
outstanding obligations constituting Senior Indebtedness, the occurrence or
existence of any event, circumstance, condition or state of facts that, by
the terms of such Senior Indebtedness, permits one or more holders of such
obligations (or a trustee or agent on behalf of the holders thereof) to
declare such obligations immediately due and payable prior to the date on
which they would otherwise become due and payable, other than a Payment
Default.
"Obligation" of any Person means any obligation of such Person to
pay principal, premium, interest (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating to the
Company, whether or not a claim for such post-petition interest is allowed in
such proceeding), penalties, reimbursement or indemnification amounts, fees,
expenses or other amounts.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company
and delivered to the Trustee; provided, however, that for purposes of Section
1004, "Officers' Certificate" means a certificate signed by the principal
executive officer, principal financial officer or principal accounting
officer of the Company.
"Opinion of Counsel" means a written opinion of counsel reasonably
acceptable to the Trustee which may include counsel for the Company.
"Outstanding," when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
<PAGE>
<PAGE> 12 EX-4.1
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Company proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid obligations
of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which
the Trustee actually knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay
the principal of (and premium, if any) or interest on any Securities on
behalf of the Company.
"Payment Blockage Period" has the meaning specified in Section
1303.
"Payment Default" means a default in the payment of any principal
of or premium, if any, interest or sinking fund on, or other payment
Obligation of the Company constituting, Senior Indebtedness when due, whether
at the Stated Maturity of any such payment or by declaration of acceleration,
call for redemption or otherwise.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Security.
"Prior Purchase" has the meaning specified in Section 1204.
"Purchase Shares" has the meaning specified in Section 1204.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture, including as applicable without duplication, any premium or
accrued interest due upon such redemption pursuant to the terms of this
Indenture.
<PAGE>
<PAGE> 13 EX-4.1
"Reference Date has the meaning specified in Section 1204.
"Reference Price" has the meaning specified in Section 1204.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the __________ or __________ (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
"Responsible Officer," when used with respect to the Trustee, means
any vice president, any assistant vice president, any corporate trust officer
or any other officer within the Trustee's Corporate Trust Office customarily
performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Securities" means the __% Convertible Subordinated Debentures Due
1999 of the Company authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means the principal of and premium, if any,
and unpaid interest on, and any reasonable fees or costs related to the
following: (a) indebtedness of the Company (including indebtedness of others
guaranteed by the Company), other than the Securities, whether outstanding on
the date hereof or hereafter created, incurred, assumed or guaranteed, (i)
for money owing to banks, or their subsidiaries or their affiliates, (ii) for
money borrowed other than from banks or (iii) arising under a lease of or
given in connection with the acquisition of property, equipment or other
assets which indebtedness, pursuant to generally accepted accounting
principles then in effect, is classified upon the balance sheet of the
Company as a liability of the Company, unless, in each case, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such indebtedness is not superior in right of payment
to the Securities, and (b) renewals, extensions, modifications, amendments
and refundings of any such indebtedness; provided, however, that Senior
Indebtedness shall not include indebtedness to a Subsidiary or other
Affiliate of the Company.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by
one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such
voting power by reason of any contingency.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday, other than any day on which securities are not traded on the
applicable securities exchange or in the applicable securities market.
<PAGE>
<PAGE> 14 EX-4.1
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as
provided in Section 905; provided that in the event the Trust Indenture Act
of 1939 is amended after such date, "Trust Indenture Act" means, to the
extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"U.S. Government Obligations" has the meaning specified in Section
1504.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as
to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
<PAGE>
<PAGE> 15 EX-4.1
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company,
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
601) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgements of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the
same, may also be provided in any other manner which the Trustee deems
sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security. Without limiting the foregoing, a Holder
entitled hereunder to give or take any action hereunder with regard to any
particular Security may do so with regard to all or any part of the principal
amount of such Security or by one or more duly appointed agents each of which
may do so pursuant to such appointment with regard to all or any different
part of such principal amount.
<PAGE>
<PAGE> 16 EX-4.1
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Department, or
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company, addressed to it at the address of its principal
office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the
Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers
of notice by Holders shall be filed with the Trustee, but such filing shall
not be a condition precedent to the validity of any action taken in reliance
upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such modification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose
hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If
any provision of this Indenture modifies or excludes any provision of the
Trust Indenture Act that may be so modified or excluded, the provisions of
the Trust Indenture Act shall be deemed to apply to this Indenture as so
modified, or if excluded shall not be deemed to apply to this Indenture, as
the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
<PAGE>
<PAGE> 17 EX-4.1
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness and the Holders of Securities,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of laws as applied in such state.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security or the last date on which a Holder has the
right to convert his Securities shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) or conversion of the
Securities need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity, or on
such last day for conversion, provided that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, if such payment is made or duly provided for on
the next succeeding Business Day.
SECTION 114. Record Date for Vote or Consent of Holders.
The Company (or, in the event deposits have been made pursuant to
Articles Four of Fifteen or after the occurrence of an Event of Default the
Trustee has called for action by the Holders, the Trustee) may set a record
date for purposes of determining the identity of Holders entitled to vote or
consent to any action by vote or consent authorized or permitted under this
Indenture, which record date shall be the later of ten days prior to the
first solicitation of such vote or consent or the date of the most recent
list of Holders furnished to the Trustee pursuant to Section 701 hereof prior
to such solicitation. If a record date is fixed, those persons who were
Holders of Securities at such record date (or their duly designated proxies),
and only those persons, shall be entitled to take such action by vote or
consent or to revoke any vote or consent previously given, whether or not
such persons continue to be Holders after such record date.
<PAGE>
<PAGE> 18 EX-4.1
SECTION 115. Incorporators, Stockholders, Officers and Directors of the
Company Exempt from Individual Liability.
No recourse under or upon any obligation, covenant or agreement of
this Indenture or any indenture supplemental hereto or of any Security, or
for any claim based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer or director, as such past,
present or future, of the Company or of any successor Person, either directly
or through the Company or any successor Person, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that this Indenture
and the obligations issued hereunder are solely corporate obligations, and
that no such personal liability whatever shall attach to, or is or shall be
incurred by the incorporators, stockholders, officers or directors, as such,
of the Company or of any successor Person, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director, as such, because
of the creation of the indebtedness hereby authorized, or under or by reason
of the obligations, covenants or agreements contained in this Indenture or in
any of the Securities or implied therefrom are hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of such Securities.
ARTICLE TWO
FORM OF SECURITIES
SECTION 201. Forms Generally.
The Securities and the Trustee's certificates of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution thereof, with the
consent of the Trustee.
The definitive Securities relating thereto shall be printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner permitted by
the rules of any securities exchange on which the Securities may be listed,
all as determined by the officers executing such Securities, as evidenced by
their execution thereof, with the consent of the Trustee.
SECTION 202. Form of Face of Security.
THE PEP BOYS - MANNY, MOE & JACK
___% Convertible Subordinated Note Due 1999
No. _______ $_________
<PAGE>
<PAGE> 19 EX-4.1
The Pep Boys - Manny, Moe & Jack, a Pennsylvania corporation
(herein called the "Company," which term includes any successor corporation
under the Indenture hereinafter referenced), for value received, hereby
promises to pay to ____________________ or registered assigns, the principal
sum of __________________ Dollars on _______________, 1999, and to pay
interest thereon from ______________, 1994 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-
annually on __________ and __________ in each year, commencing
_______________, 1994, until the principal hereof is paid or made available
for payment, at the rate per annum of ___% from and including the date of
issuance of this Security until maturity or earlier redemption. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall
be the __________ and __________ (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof shall
be given to Holders of Securities not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. Payment of the
principal of (and premium, if any) and interest on this Security will be made
at the office or agency of the Company in the Borough of Manhattan, the City
of New York, or at any other office or agency maintained by the Company for
such purpose, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company, payment of interest may
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated: THE PEP BOYS- MANNY, MOE & JACK
By:____________________________________
Attest:
By: ______________________________
<PAGE>
<PAGE> 20 EX-4.1
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of Securities of
the Company designated as its ___% Convertible Subordinated Notes Due 1999
(herein called the "Securities"), limited in aggregate principal amount to
$__________ (subject to increase as provided in the Indenture up to
$__________ aggregate principal amount), issued and to be issued under an
Indenture, dated as of _________, 1994 (herein called the "Indenture"),
between the Company and ______________, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee, the holders of Senior
Indebtedness and the Holders of the Securities and of the terms upon which
the Securities are, and are to be, authenticated and delivered.
Subject to and upon compliance with the provisions of the
Indenture, the Holder of this Security is entitled at his option, at any time
on or before the close of business on __________, 1999, or in case this
Security or a portion hereof is called for redemption, then in respect of
this Security or such portion hereof until and including, but (unless the
Company defaults in making the payment due upon redemption) not after, the
close of business on the fifth Business Day preceding the Redemption Date, to
convert this Security (or any portion of the principal amount hereof which is
$1,000 or an integral multiple thereof), at the principal amount hereof, or
of such portion, into fully paid and non-assessable shares (calculated as to
each conversion to the nearest 1/100 of a share) of Common Stock of the
Company at a conversion price equal to $___________ aggregate principal
amount of Securities for each share of Common Stock (or at the current
adjusted conversion price if an adjustment has been made as provided in the
Indenture) by surrender of this Security, duly endorsed or assigned to the
Company or in blank, to the Company at its office or agency in the Borough of
Manhattan, the City of New York, or at any other office or agency maintained
by the Company for such purpose, accompanied by written notice to the Company
that the Holder hereof elects to convert this Security, or if less than the
entire principal amount hereof is to be converted, the portion hereof to be
converted, and, in case such surrender shall be made during the period from
the close of business on any Regular Record Date next preceding any Interest
Payment Date to the opening of business on such Interest Payment Date (unless
this Security or the portion thereof being converted matures prior to such
Interest Payment Date), also accompanied by payment in New York Clearing
House or other funds acceptable to the Company of an amount equal to the
interest payable on such Interest Payment Date on the principal amount of
this Security then being converted. Subject to the aforesaid requirement for
payment and, in the case of a conversion after the Regular Record Date next
preceding any Interest Payment Date and on or before such Interest Payment
Date, to the right of the Holder of this Security (or any Predecessor
Security) of record at such Regular Record Date to receive an installment of
interest (with certain exceptions provided in the Indenture), no payment or
adjustment is to be made on conversion for interest accrued hereon or for
dividends on the Common Stock issued on conversion. The Company's delivery
to the Holder of the fixed number of shares of Common Stock of the Company
(and any cash in lieu of fractional shares of such Common Stock) into which
the Security is convertible shall be deemed to satisfy the Company's
obligation to pay the principal amount of the Security and all accrued
interest and original issue discount that has not previously been paid. The
Common Stock of the Company so delivered shall be treated as issued first in
payment of accrued interest and original issue discount and then in payment
of principal. Thus, accrued interest and original issue discount, if any,
shall be treated as paid rather than canceled, extinguished or forfeited. No
fractions of shares or scrip representing fractions of shares will be issued
on conversion, but instead of any fractional interest the Company shall pay a
cash adjustment as provided in the Indenture. The conversion price is
subject to adjustment as provided in the Indenture. In addition, the
<PAGE>
<PAGE> 21 EX-4.1
Indenture provides that in case of certain consolidations or mergers to which
the Company is a party or the transfer or lease of its properties and assets
substantially as an entirety, the Indenture shall be amended, without the
consent of any Holders of Securities, so that this Security, if then
outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon the consolidation, merger
or transfer by a holder of the number of shares of Common Stock into which
this Security might have been converted immediately prior to such
consolidation, merger or transfer (assuming such holder of Common Stock
failed to exercise any rights of election and received per share the kind and
amount received per share by a plurality of non-electing shares).
The Securities are redeemable, at the Company's option, as a whole
or from time to time in part (in denominations of $1,000 or integral
multiples thereof), on or after _______________, 1997, upon not less than 30
nor more than 60 days notice mailed to the registered Holder thereof at a
redemption price of _____% of principal amount if redeemed during the period
commencing on __________, 1997 and ending on (and including) __________, 1998,
and thereafter at a Redemption Price equal to 100% of the principal amount,
together, in each case, with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the
Indenture.
In the event of redemption or conversion of this Security in part
only, a new Security or Securities for the unredeemed or unconverted portion
thereof will be issued in the name of the Holder thereof upon the
cancellation hereof.
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder
of this Security, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact
for any and all such purposes.
In the event there shall occur any Change of Control with respect
to the Company, each Holder of Securities shall have the right, at such
Holder's option but subject to the conditions set forth in the Indenture, to
require the Company to purchase on the Change of Control Purchase Date all or
any part of such Holder's Securities at a Change of Control Purchase Price
equal to 100% of the principal amount thereof, together with accrued and
unpaid interest to the Change of Control Purchase Date and in the manner
specified in the Indenture.
<PAGE>
<PAGE> 22 EX-4.1
If an Event of Default shall occur and be continuing, the principal
of all the Securities may be declared due and payable in the manner and with
the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Securities under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Securities at the
time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the
Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders
of this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed or to convert this Security as
provided in the Indenture.
The Securities are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of
Securities of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered in the
Securities Register as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
The 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, without regard to principles
of conflicts of laws.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
<PAGE>
<PAGE> 23 EX-4.1
ASSIGNMENT FORM
To Assign this Security, fill in the form below:
I or we assign and transfer this Security to _______________ whose tax
identification number or social security number is ____________, and whose
address is (print or type below, including zip code):
________________________
________________________
________________________
I or we irrevocably appoint _________________________ agent to transfer this
Security on the books of the Company. The Agent may substitute another to
act for him.
Date:__________________
Your signature: _________________________________
(Sign exactly as your name
appears on the other side of
of this Security)
Signature Guarantee:
__________________________________________
Member firm of the New York Stock Exchange
or commercial bank or trust Company having
an office in the United States
SECTION 204. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within-mentioned
Indenture.
[insert name of trustee]
as Trustee
By:________________________________
Authorized Signatory
Dated:___________________
SECTION 205. Form of Election to Convert.
To The Pep Boys - Manny, Moe & Jack:
The undersigned owner of this Security hereby irrevocably exercises
the option to convert this Security, or the portion (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of
The Pep Boys - Manny, Moe & Jack in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable
and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned
registered Holder hereof, unless a different name has been indicated in the
assignment below. If shares are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto and shall cause the undersigned's signature to be
guaranteed. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
<PAGE>
<PAGE> 24 EX-4.1
Dated:________________
Portion of Security to be converted
($1,000 or an integral multiple thereof):
$_____________________
________________________________________
Signature (for conversion only)
If shares of Common Stock are to be issued and registered
otherwise than to the registered Holder named above,
please have the above signature guaranteed and print or
typewrite name and address, including zip code, and
social security or other taxpayer identification number.
________________________________________
________________________________________
________________________________________
Date:______________
Signature:______________________________
(Sign exactly as your name appears on the other
side of this Security)
Signature Guarantee:
_____________________________
Member firm of the New York
Stock Exchange or commercial
bank or trust company having
an office in the United States
SECTION 206. Form of Option of Holder to Elect Purchase.
If you wish to have this Security purchased by the Company pursuant
to Section 1402 of the Indenture, check the box: ____
If you wish to elect to have only part of this Security purchased
by the Company pursuant to Section 1402 of the Indenture, state the amount:
$______________
Date:_____________
Signature:______________________________
(Sign exactly as your name appears on the other
side of this Security)
<PAGE>
<PAGE> 25 EX-4.1
Signature Guarantee:
_________________________________
Member firm of the New York Stock
Exchange or commercial bank or trust
company having an office in the
United States
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to (a)
$__________, plus (b) such aggregate principal amount (which may not exceed
$__________ principal amount) of Securities as shall be purchased by the
Underwriters on the Second Closing Date pursuant to the Underwriting
Agreement, ____________, 1994 between the Company and CS First Boston
Corporation, as Underwriter, except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Securities pursuant to Sections 304, 305, 306, 906, 1108, 1202 or
1404.
The Securities shall be known and designated as the "____%
Convertible Subordinated Notes Due 2001" of the Company. Their Stated
Maturity shall be _______________, 2001 and they shall bear interest at the
rate of ___% per annum, from and including the date of issuance thereof until
maturity or earlier redemption, payable semi-annually on __________ and
__________ commencing _______________, 1994, until the principal thereof is
paid or made available for payment.
The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Company in the
Borough of Manhattan, the City of New York maintained for such purpose and at
any other office or agency maintained by the Company for such purpose;
provided, however, that at the option of the Company, payment of interest may
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.
The Securities shall be redeemable as provided in Article Eleven.
The Securities shall be convertible as provided in Article Twelve.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Thirteen.
The Securities shall be subject to repurchase by the Company, at
the option of the Holders, as provided in Article Fourteen.
<PAGE>
<PAGE> 26 EX-4.1
SECTION 302. Denominations.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple
thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile. Securities bearing the manual or
facsimile signatures of individuals who were at any time the proper officers
of the Company shall bind the Company, notwithstanding that such individuals
or any of them have ceased to hold such offices prior to the authentication
and delivery of such Securities or did not hold such offices at the date of
such Securities. At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by
the Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities; and the Trustee in
accordance with such Company Order shall authenticate and deliver such
Securities as in this Indenture provided and not otherwise. Each Security
shall be dated the date of its authentication. No Security shall be entitled
to any benefit under this Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of authentication
substantially in the form provided for herein executed by the Trustee by
manual signature, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities with the consent of the
Trustee.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to
Section 1002, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Securities the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of authorized denominations. Until so
exchanged the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register) maintained in such office and in any
other office or agency designated pursuant to Section 1002 being herein
sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities.
<PAGE>
<PAGE> 27 EX-4.1
The Trustee is hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided. Upon
surrender for registration of transfer of any Security at an office or agency
of the Company designated pursuant to Section 1002 for such purpose, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities
of any authorized denominations and of a like aggregate principal amount. At
the option of the Holder, Securities may be exchanged for other Securities of
any authorized denominations and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive. All Securities issued
upon any registration of transfer or exchange of Securities shall be the
valid obligations of the Company evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Securities surrendered upon
such registration of transfer or exchange. Every Security presented or
surrendered for registration of transfer or for exchange shall (if so
required by the Company or the Trustee) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Company and
the Security Registrar duly executed, by the Holder thereof or his attorney
duly authorized in writing. No service charge shall be made for any
registration of transfer or exchange of Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section 304, 906,
1108, 1202 or 1404 not involving any transfer. The Company shall not be
required (i) to issue, register the transfer of or exchange any Security
during a period beginning at the opening of business 15 days before the day
of the mailing of a notice of redemption of Securities selected for
redemption under Section 1104 and ending at the close of business on the day
of such mailing, or (ii) to register the transfer of or exchange any Security
so selected for redemption in whole or in part, except the unredeemed portion
of any Security being redeemed in part.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity, as may be required by them to
save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
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
may, instead of issuing a new Security, pay such Security.
<PAGE>
<PAGE> 28 EX-4.1
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
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 Regular 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 (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date notwithstanding the fact that such
Holder was a Holder on such Regular Record Date, and such Defaulted Interest
may be paid by the Company at its election, as provided in Clause (a) or (b)
below:
(a) 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 money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 days and no less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at his address as it
appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and shall no longer
be payable pursuant to the following Clause (b).
<PAGE>
<PAGE> 29 EX-4.1
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
In the case of any Security which is converted after any Regular
Record Date (without regard to any Special Record Date) and on or prior to
the next succeeding Interest Payment Date (other than any Security whose
Maturity is prior to such Interest Payment Date), subject to the obligation
to deliver funds pursuant to Section 1202, interest whose Stated Maturity is
on such Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close
of business on such Regular Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any Security
which is converted, interest whose Stated Maturity is after the date of
conversion of such Security shall not be payable.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Security is registered in the
Securities Register as the owner of such Security for the purpose of
receiving payment of principal of (and premium, if any) and (subject to
Section 307) interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to
the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange, conversion or repurchase shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be
promptly canceled by it. The Company may at any time deliver to the Trustee
for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and
all Securities so delivered shall be promptly canceled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee
shall be disposed of by the Trustee and a certificate of destruction
delivered to the Company.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
<PAGE>
<PAGE> 30 EX-4.1
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of conversion, registration of
transfer or exchange of Securities and rights of the Trustee herein expressly
provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation have become due and payable and the Company has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company;
(3) the Trustee has not received any notice pursuant to the terms
of Section 1306; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company in Sections 305, 306, 607, 608, 702, 1001,
1002 and 1003 and in Article Twelve shall survive until the Securities are no
longer outstanding and the obligations of the Company in Section 607 shall
survive termination of this Indenture.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal (and
<PAGE>
<PAGE> 31 EX-4.1
premium, if any) and interest for whose payment such money has been deposited
with the Trustee. All moneys deposited with the Trustee pursuant to Section
401 (and held by it or any Paying Agent) for the payment of Securities
subsequently converted shall be returned to the Company upon Company Request.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether
it shall be occasioned by the provisions of Article Thirteen or be voluntary
or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(1) default in the payment of any interest upon any Security when
it becomes due and payable, and continuance of such default for a period of
30 days, whether or not such payment is prohibited by Article Thirteen; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security at its Maturity; or
(3) default in the payment of the Redemption Price in respect of
any Security on the Redemption Date therefor in accordance with the
provisions of Article Eleven; or
(4) default in the payment of the Change of Control Purchase Price
in respect of any Security on the Change of Control Purchase Date therefor in
accordance with the provisions of Article Fourteen; or
(5) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or warranty
a default in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach 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 the
Holders of at least 25% in principal amount of the Outstanding Securities a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder; or
(6) default in the payment of any mortgage, indenture, bond, note
or other instrument under which there may be issued, or by which there may be
secured or evidenced, any indebtedness of the Company in excess of an
aggregate of $10,000,000 either for borrowed money or representing any Senior
Indebtedness, or default under any such indebtedness that results in the
acceleration of such indebtedness prior to its express maturity; provided,
however, that if such default under such mortgage, indenture or instrument
shall be remedied or cured by the Company or waived by the holders of such
indebtedness prior to an acceleration under this Indenture, then the Event of
Default hereunder by reason thereof shall be deemed likewise to have been
thereupon remedied, cured or waived without further action upon the part of
either the Trustee or any of the Holders of the Securities; or
(7) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in an involuntary
<PAGE>
<PAGE> 32 EX-4.1
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as properly filed
a petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 60 consecutive days; or
(8) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by the Company to the
entry of decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it,
or the filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state law, or the consent by it to
the filing of such petition or to the appointment of or taking possession by
a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the admission
by it in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company in furtherance of any
such action.
SECTION 502. Acceleration of Maturity, Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
clause (7) or (8) of Section 501) occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount
of the Outstanding Securities may declare the principal of all the Securities
to be due and payable, by a notice in writing to the Company (and to the
Trustee if given by Holders), and such principal shall become immediately due
and payable. If an Event of Default specified in clause (7) or (8) of
Section 501 occurs, all unpaid principal and accrued interest on the
Securities then outstanding shall become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Holder.
At any time after a declaration of acceleration has been made as a
result of an Event of Default described in clause (6) of Section 501, and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a
majority in principal amount of the Outstanding Securities, by written notice
to the Company and the Trustee, may rescind and annul such declaration and
its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any, on) any Securities
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the
Securities,
<PAGE>
<PAGE> 33 EX-4.1
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities,
and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair
any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues
for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof, including
payment of the Redemption Price on any Redemption Date, or
(3) default is made in the payment of the Change in Control
Purchase Price in respect of any Security on the Change in Control
Purchase Date therefor in accordance with the provisions of Article
Fourteen,
the Company will, 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 (and premium, if any) and interest, and, to the
extent that payment of such interest shall be legally enforceable, interest
on any overdue principal (and premium, if any) and on any overdue interest,
at the rate borne by the Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other obligor upon
the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of
the Holders by such appropriate judicial proceedings as the Trustee shall
deem appropriate 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.
<PAGE>
<PAGE> 34 EX-4.1
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor
upon the Securities or the property of the Company or of such other obligor
or their creditors, the 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 or
interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be
necessary or advisable and to take any and all actions authorized under
the Trust Indenture Act or any other applicable laws as may be
appropriate in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Holder 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 reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder 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 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Subject to Article Thirteen, any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of such money
on account of principal (or premium, if any) or interest, upon presentation
of the Securities and the notation thereon of the payment if only partially
paid and upon surrender thereof if fully paid:
<PAGE>
<PAGE> 35 EX-4.1
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively; and
THIRD: To the payment of the remainder, if any, to whomsoever
may be lawfully entitled thereto, or as a court of competent
jurisdiction may direct.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder,
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more 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 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert.
Notwithstanding any other provision in 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) and (subject to
Section 307) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to convert such Security in accordance with Article Twelve and to
institute suit for the enforcement of any such payment and right to convert,
and such rights shall not be impaired without the consent of such Holder.
<PAGE>
<PAGE> 36 EX-4.1
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, 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 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities
waive any past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security, or
<PAGE>
<PAGE> 37 EX-4.1
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Company, to any suit instituted by the Trustee, to
any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities, or
to any suit instituted by any Holder for the enforcement of the payment of
the principal of (or premium, if any) or interest on any Security on or after
the respective Stated Maturities expressed in such Security (or, in the case
of redemption, on or after the Redemption Date) or for the enforcement of the
right to convert any Security in accordance with Article Twelve.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Indenture, and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
<PAGE>
<PAGE> 38 EX-4.1
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case 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 man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder, the
Trustee shall transmit by mail to all Holders, as their names and addresses
appear in the Security Register, notice of such default hereunder known to
the Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Security, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors or
Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders. For the
purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default.
<PAGE>
<PAGE> 39 EX-4.1
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board of Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Securities. The Trustee shall not be accountable
for the use or application by the Company of Securities or the proceeds
thereof.
<PAGE>
<PAGE> 40 EX-4.1
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or
any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 608 and 613, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it from time to time
hereunder except as otherwise agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to any
action or failure to act by the Trustee that breaches the applicable
standard of care relating thereto; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred unless incurred in connection
with any action or failure to act by the Trustee that breaches the
applicable standard of care relating thereto, arising out of or in
connection with the acceptance or administration of the trust hereunder,
including the 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.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in clauses (7) and (8) of Section 501, the
expenses (including the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency
or other similar law.
The provisions of this Section shall survive the termination of
this Indenture.
SECTION 608. Disqualification; Conflicting Interest.
The Trustee shall be subject to the provisions of * 310(b) of the
Trust Indenture Act. Nothing herein shall prevent the Trustee from filing
with the SEC the application referred to in the penultimate paragraph of
* 310(b) of the Trust Indenture Act.
<PAGE>
<PAGE> 41 EX-4.1
SECTION 609. Corporate Trustee Required; Eligibility
There shall at all times be a Trustee hereunder who satisfies the
requirements of paragraphs (1), (2) and (5) of * 310 of the Trust Indenture
Act and which shall be a corporation organized and doing business under the
laws of the United States of America, any state thereof or the District of
Columbia, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $100,000,000 and subject to
supervision or examination by federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 611 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
of a majority in principal amount of the Outstanding Securities, delivered to
the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
<PAGE>
<PAGE> 42 EX-4.1
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor
Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so
appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of
a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective, the retiring Trustee
shall be released from all obligations for future actions under this
Indenture and such successor Trustee, without any further act, deed or
conveyance, shall become vested, with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and
certainly, vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or convened or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any, Securities shall have
been authenticated, but not delivered, by, the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
<PAGE>
<PAGE> 43 EX-4.1
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with * 311(a) of the Trust Indenture Act,
excluding any creditor relationship listed in * 310(b) of the Trust Indenture
Act. A trustee who has resigned or been removed shall be subject to * 311(a)
of the Trust Indenture Act to the extent indicated therein.
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents which
shall be authorized to act on behalf of the Trustee to authenticate
Securities issued upon original issue and upon exchange, registration of
transfer, partial conversion or partial redemption thereof or pursuant to
Section 306, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes
as if authenticated by the Trustee hereunder. Wherever reference is made in
this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by
an Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent
shall be acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States of America,
any state thereof or the District of Columbia, authorized under such laws to
act as Authenticating Agent, having a combined capital and surplus of not
less than $100,000,000 and subject to supervision or examination by federal
or state authority. If such Authenticating Agent publishes reports of
condition at least annually pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such Authenticating Agent shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such corporation shall be otherwise
eligible under this Section without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to
all Holders as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
<PAGE>
<PAGE> 44 EX-4.1
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section, the Securities
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Securities described in the within mentioned
Indenture.
[insert name of trustee]
As Trustee
By:__________________________________________
As Authenticating Agent
By:__________________________________________
Authorized Signatory
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE
AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may request in writing,
within 10 Business Days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in
its capacity as Security Registrar.
SECTION 702. Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) Holders may communicate pursuant to * 312(b) of the Trust
Indenture Act with other Holders 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 * 312(c) of the Trust Indenture
Act.
<PAGE>
<PAGE> 45 EX-4.1
SECTION 703. Reports by Trustee.
(a) If such report is required by * 313 of the Trust Indenture
Act, within 60 days after each May 15, beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Holder a brief
report dated as of such May 15 that complies with * 313(a) of the Trust
Indenture Act. The Trustee also shall comply with * 313(b)(2), (c) and (d)
of the Trust Indenture Act.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange
upon which the Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when the Securities are listed
on any stock exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports pursuant to either of
said Sections, then it shall file with the Trustee and the Commission,
in accordance with rules and regulations prescribed from time to time by
the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of
the Securities Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations including, in the case of
annual reports, if required by such rules and regulations, certificates
or opinions of independent public accountants, conforming to the
requirements of Section 102, as to compliance with conditions or
covenants, compliance with which is subject to verification by
accountants;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit by mail to all Holders, in the manner and to the
extent provided in Subsection 703(a), such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
<PAGE>
<PAGE> 46 EX-4.1
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
Person or convey, transact or lease all or substantially all of its
properties and assets to any Person, and the Company shall not permit any
Person to consolidate with or merge into the Company or convey, transfer or
lease its properties and assets substantially as an entirety to the Company,
unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
corporation, partnership or trust, organized and validly existing under
the laws of the United States of America, any state thereof or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered by the successor corporation
to the Trustee in form satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any) and interest on all
the Securities and the performance of every covenant of this Indenture
on the part of the Company to be performed or observed and shall have
provided for conversion rights in accordance with Section 1211;
(2) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing;
(3) such consolidation, merger, conveyance, transfer or lease does
not materially affect the validity or enforceability of the Securities;
and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
SECTION 802. Successor Substituted for Company.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of all or
substantially all the properties and assets of the Company in accordance with
Section 801, the successor Person formed by such consolidation or into which
the Company is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
<PAGE>
<PAGE> 47 EX-4.1
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory
to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities in accordance with Article Eight; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default; or
(4) to secure the Securities; or
(5) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Section 1211; or
(6) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, 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 such action pursuant to this Clause (6)
shall not adversely affect the interests of the Holders in any material
respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the place of payment where, or the coin or
currency in which, any Security or any premium or the interest thereon
is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the
case of redemption, on or after the Redemption Date or, in the case of a
repurchase pursuant to Article Fourteen, on or after the Change of
Control Purchase Date), or adversely affect the right to convert any
<PAGE>
<PAGE> 48 EX-4.1
Security as provided in Article Twelve (except as permitted by Section
901(5)) or modify the provisions of this Indenture with respect to the
subordination of the Securities in a manner adverse to the Holders, or
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section or Section 513 or
Section 1009, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel of the Company stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and, subject to Section 902, every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in
effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee
shall so determine, new Securities so modified as to conform, in the opinion
of the Trustee and the Company, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered to the
Trustee in exchange for Outstanding Securities.
<PAGE>
<PAGE> 49 EX-4.1
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually
pay the principal of (and premium, if any) and interest on the Securities and
the Redemption Price and the Change of Control Purchase Price, if any, each
in accordance with the terms of the Securities and this Indenture.
To the extent permitted by applicable law, the Company shall pay
interest on overdue amounts at the rate set forth in paragraph 1 of the
Securities, and it shall pay interest on overdue interest at the same rate
compounded semi-annually (to the extent that the payment of such interest
shall be legally enforceable), which interest on overdue interest shall
accrue from the date such amounts became overdue.
SECTION 1002. Maintenance of Office or Agency.
The Company will 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, where Securities may be surrendered for conversion or purchase
pursuant to Article Fourteen and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and
any change in the location, of 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 Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) 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 will give prompt written
notice to the Trustee of any such designation or rescission and of any change
in the location of any such other office or agency.
SECTION 1003. Money for Security Payments to be Held in Trust.
If the Company, shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of (and premium, if any) or
interest on any of the Securities, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due until such sums shall be
paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of (and premium, if any) or interest
on any Securities, deposit with a Paying Agent a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due, such sum to be
<PAGE>
<PAGE> 50 EX-4.1
held in trust for the benefit of the Persons entitled to such principal,
premium or interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities in trust for the benefit
of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal (and premium, if any) or interest; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company in trust for the payment of the principal of (and
premium, if any) or interest on any Security and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due
and payable shall be paid to the Company on Company Request or (if then held
by the Company) shall be discharged from such trust; and the Holder of such
Security), shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in New York, New York and
Philadelphia, Pennsylvania, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining, will be repaid to the Company.
SECTION 1004. Statements of Officers of Company as to Default.
(a) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company ending after the date hereof
(but no later than the time of filing of the annual report of the Company,
with the Trustee pursuant to Section 704), an Officers' Certificate, stating
whether or not to the best knowledge of the signers thereof the Company is in
compliance with all conditions and covenants hereunder, without regard to any
period of grace or requirement of notice provided hereunder. If the Company
<PAGE>
<PAGE> 51 EX-4.1
shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge. The Officers' Certificate need not
comply with Section 102 hereof.
(b) The Company shall file with the Trustee written notice of the
occurrence of any default or Event of Default within five Business Days of
its becoming aware of any such default or Event of Default.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or
franchise if its Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and that the loss thereof is not disadvantageous in any material respect to
the Holders.
SECTION 1006. Maintenance of Properties.
The Company will cause all properties material to the conduct of
its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company, may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times while any
Securities are Outstanding; provided, however, that nothing in this Section
shall prevent the Company from discontinuing the operation or maintenance of
any of such properties if such discontinuance is, in the judgment of the
Company, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) 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 Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all material lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary, in each case material to the
Company and its Subsidiaries taken as a whole; provided, however, that the
Company, shall not 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 made.
SECTION 1008. Further Instruments and Acts.
Upon reasonable request of the Trustee, the Company will execute
and deliver such further instruments and perform such further acts as may be
reasonably necessary, or proper to carry out more effectively the purposes of
this Indenture, including, but not limited to, any reporting requirements
relating to original issue discount for purposes of federal income taxation.
<PAGE>
<PAGE> 52 EX-4.1
SECTION 1009. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in this Article Ten (other than
Sections 1001 through 1005, inclusive), if before the time for such
compliance the Holders of at least a majority (or such greater amount as may
be specified in any such term, provision or condition) in principal amount of
the Outstanding Securities shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and
the duties of the Trustee in respect of any such term, provision or condition
shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
The Securities may be redeemed at the election of the Company, as a
whole or from time to time in part, at any time on or after _______________,
1997, at the Redemption Prices specified in the form of Security hereinbefore
set forth for redemptions, together with accrued interest to the Redemption
Date.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, at least 45
days prior to the Redemption Date fixed by the Company (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities to be redeemed.
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to
the Redemption Date by the Trustee, from the Outstanding Securities not
previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption
of portions (equal to $1,000 or any integral multiple thereof) of the
principal amount of Securities of a denomination larger than $1,000.
If any Security selected for partial redemption is converted in
part before termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption.
<PAGE>
<PAGE> 53 EX-4.1
Securities which have been converted during a selection of Securities to be
redeemed shall be treated by the Trustee as Outstanding for the purpose of
such selection.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the
case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address,
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date,
(5) the conversion price, the date on which the right to convert
the principal of the Securities to be redeemed will terminate and the
place or places where such Securities may be surrendered for conversion,
and
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election
of the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities which are to be redeemed on that date other than any
Securities called for redemption on that date which have been converted prior
to the date of such deposit.
<PAGE>
<PAGE> 54 EX-4.1
If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held
in trust for the redemption of such Security shall (subject to any right of
the Holder of such Security or any Predecessor Security to receive interest
as provided in the last paragraph of Section 307) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from
such trust.
SECTION 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at
the Redemption Price therein specified, and from and after such date (unless
the Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of
any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that installments
of interest whose Stated Maturity is on or prior to the Redemption Date shall
be payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant
Record Dates according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory
to the Company and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of any authorized denomination
as requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered.
SECTION 1109. Conversion Arrangements on Call for Redemption.
Notwithstanding anything to the contrary contained in this
Indenture, in connection with any redemption of Securities, the Company, by
an agreement with one or more investment bankers or other purchasers, may
arrange for such purchasers to purchase all Securities called for redemption
(the "Called Securities") which are either (i) surrendered for redemption or
(ii) not duly surrendered for redemption or conversion prior to the close of
business on the Redemption Date, and to convert the same into shares of
Common Stock, by the purchasers' depositing with the Trustee (acting as
Paying Agent with respect to the deposit of such amount and as conversion
agent with respect to the conversion of such Called Securities), in trust for
the Holders of the Called Securities, on or prior to the Redemption Date in
the manner agreed to by the Company and such purchasers, an amount sufficient
to pay the Redemption Price, payable by the Company on redemption of such
Called Securities. In connection with any such arrangement for purchase and
conversion, the Trustee as Paying Agent shall pay on or after the Redemption
Date such amounts so deposited by the purchasers in exchange for Called
Securities surrendered for redemption prior to the close of business on the
Redemption Date and for all Called Securities surrendered after such
<PAGE>
<PAGE> 55 EX-4.1
Redemption Date. Notwithstanding anything to the contrary contained in this
Article Eleven, the obligation of the Company to pay the Redemption Price of
such Called Securities shall be satisfied and discharged to the extent such
amount is so paid by such purchasers, provided, however, that nothing in this
Section 1109 shall in any way relieve the Company of the obligation to any
such Redemption Price on all Called Securities to the extent such amount is
not so paid by said purchasers. For all purposes of this Indenture, any
Called Securities surrendered by the Holders for redemption, and any Called
Securities not duly surrendered for redemption or conversion prior to the
close of business on the Redemption Date, shall be deemed acquired by such
purchasers from such Holders and surrendered by such purchasers for
conversion and shall in all respects be deemed to have been converted, all as
of immediately prior to the close of business on the Redemption Date, subject
to the deposit by the purchasers of the above amount as aforesaid. Nothing
in this Section 1109 shall in any way limit the right of any Holder of a
Security to convert his Security pursuant to the terms of this Indenture any
time prior to the close of business on the fifth Business Day preceding the
Redemption Date.
ARTICLE TWELVE
CONVERSION OF SECURITIES
SECTION 1201. Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions of this Article,
at the option of the Holder thereof, any Security or any portion of the
principal amount thereof which is $1,000 or an integral multiple of $1,000
may be converted at the principal amount thereof, or of such portion thereof,
into fully paid and nonassessable shares (calculated as to each conversion to
the nearest 1/100th of a share) of Common Stock of the Company, at the
conversion price, determined as hereinafter provided, in effect at the time
of conversion. Such conversion right shall expire at the close of business
on _______________, 1999. In case a Security or portion thereof is called
for redemption, such conversion right in respect of the Security or portion
so called shall expire at the close of business on the fifth Business Day
preceding the Redemption Date, unless the Company defaults in making the
payment due upon redemption.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "conversion price") shall be initially
$_________ per share of Common Stock. The conversion price shall be adjusted
in certain instances as provided in Section 1204.
In case the Company shall, by dividend or otherwise, declare or
make a distribution on its Common Stock referred to in paragraph (4) or (5)
of Section 1204, the Holder of each Security, upon the conversion thereof
pursuant to this Article subsequent to the close of business on the date
fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the conversion price
adjustment in respect of such distribution pursuant to paragraph (4) or (5)
of Section 1204, shall also be entitled to receive for each share of Common
Stock into which such Security is converted, the portion of the evidences of
indebtedness, shares of capital stock, cash and assets so distributed
applicable to one share of Common Stock, provided that, at the election of
the Company (whose election shall be evidenced by a Board Resolution) with
respect to all Holders so converting, the Company may, in lieu of
distributing to such Holder any portion of such distribution not consisting
of cash or securities of the Company, pay such Holder an amount in cash equal
to the fair market value thereof (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution).
<PAGE>
<PAGE> 56 EX-4.1
If any conversion of a Security described in the immediately preceding
sentence occurs prior to the payment date for a distribution to holders of
Common Stock which the Holder of the Security so converted is entitled to
receive in accordance with the immediately preceding sentence, the Company
may elect (such election to be evidenced by a Board Resolution) to distribute
to such Holder a due bill for the evidences of indebtedness, shares of
capital stock, cash or assets to which such Holder is so entitled, provided
that such due bill (i) meets any applicable requirements of the principal
national securities exchange or other market on which the Common Stock is
then traded and (ii) requires payment or delivery of such evidences of
indebtedness, shares of capital stock, cash or assets no later than the date
of payment or delivery thereof to holders of Common Stock receiving such
distribution.
SECTION 1202. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank, at any office or agency maintained by
the Company pursuant to Section 1002, accompanied by written notice to the
Company at such office or agency that the Holder elects to convert such
Security, or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted. Securities surrendered for
conversion during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on
such Interest Payment Date shall (except for Securities whose Maturity is
prior to such Interest Payment Date and Securities called for redemption on a
Redemption Date within such period) be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of Securities being surrendered for conversion. Except as provided in
the preceding sentence and subject to the last paragraph of Section 307, no
payment or adjustment shall be made upon any conversion on account of any
interest accrued on the Securities surrendered for conversion on account of
any dividends on the Common Stock issued upon conversion.
Securities shall be deemed to have been converted immediately prior
to the close of business on the day of surrender of such Securities for
conversion in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Securities as Holders shall cease, and the
Person or Persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders
of such Common Stock at such time. As promptly as practicable on or after
the conversion date, the Company shall issue and shall deliver at such office
or agency a certificate or certificates for the number of full shares of
Common Stock issuable upon conversion, together with payment in lieu of any
fraction of a share, as provided in Section 1203.
In the case of any Security which is converted in part only, upon
such conversion the Company shall execute and the Trustee shall authenticate
and deliver to the Holder thereof, at the expense of the Company, a new
Security or Securities, of authorized denominations in aggregate principal
amount equal to the unconverted portion of the principal amount of such
Security.
SECTION 1203. Fractions of Shares.
No fractional shares of Common Stock 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 (or specified portions
thereof) so surrendered. Instead of any fractional share of Common Stock
<PAGE>
<PAGE> 57 EX-4.1
which would otherwise be issuable upon conversion of any Security or
Securities (or specified portions thereof), the Company shall pay a cash
adjustment (rounded to the nearest cent) in respect of such fraction in an
amount equal to the same fraction of the Closing Price per share of the
Common Stock at the close of business on the day of conversion (or, if such
day is not a Trading Day, on the Trading Day immediately preceding such day).
SECTION 1204. Adjustment of Conversion Price.
(1) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in Common Stock or shall pay or
make a dividend or other distribution on any other class of capital stock of
the Company which dividend or distribution includes Common Stock, the
conversion price in effect at the opening of business on the day following
the 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 the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the
opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (1), the number of shares
of Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
(2) Subject to the last sentence of paragraph (8) of this Section,
in case the Company shall pay or make a dividend or other distribution on its
Common Stock consisting exclusively of, or shall otherwise issue to all
holders of its Common Stock, rights or warrants entitling the holders thereof
to subscribe for or purchase shares of Common Stock at a price per share less
than the current market price per share (determined as provided in paragraph
(9) of this Section) of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights or warrants,
the conversion price in effect at the opening of business on the day
following the date fixed for such determination 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 the date fixed for such determination plus the number of shares of Common
Stock which the aggregate of the offering price of the total number of shares
of Common Stock so offered for subscription or purchase would purchase at
such current market price and the denominator shall be the number of shares
of Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective immediately
after the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares
of Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any rights or warrants in respect of Common Stock
held in the treasury of the Company. If at the end of the period during
which such rights or warrants are convertible into Common Stock, not all such
rights or warrants have been converted into Common Stock, the adjustment
shall be immediately readjusted (on a prospective basis for any Securities
not theretofore converted) to what it would have been based on the number of
additional shares of Common Stock actually issued.
(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the conversion price in
<PAGE>
<PAGE> 58 EX-4.1
effect at the opening of business on the day following the day upon which
such subdivision become effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the conversion price in
effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(4) Subject to the last sentence of this paragraph (4), in case
the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock evidences of its indebtedness, shares of any class of capital
stock, cash or assets (including securities, but excluding (x) any rights or
warrants referred to in paragraph (2) of this Section, (y) any dividend or
distribution paid exclusively in cash out of the retained earnings of the
Company and (z) any dividend or distribution referred to in paragraph (1) of
this Section), the conversion price shall be reduced so that the same shall
equal the price determined by multiplying the conversion price in effect
immediately prior to the effectiveness of the conversion price reduction
contemplated by this paragraph (4) by a fraction of which the numerator shall
be the current market price per share (determined as provided in paragraph
(9) of this Section) of the Common Stock on the date of such effectiveness
less the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), on
the date of such effectiveness, of the portion of the evidences of
indebtedness, shares of capital stock, cash and assets so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such reduction to become
effective immediately prior to the opening of business on the day following
the date fixed for the determination of stockholders entitled to receive such
distribution (the "Reference Date"). If the Board of Directors determines
the fair market value of any distribution for purposes of this paragraph (4)
by reference to the actual or when issued trading market value for any
securities comprising such distribution, it must in doing so consider the
prices in such market over the same period used in computing the current
market price per share pursuant to paragraph (9) of this Section. For
purposes of this paragraph (4), any dividend or distribution that includes
shares of Common Stock, rights or warrants to subscribe for or purchase
shares of Common Stock or other securities convertible into or exchangeable
for shares of Common Stock shall be deemed instead to be (a) (i) a dividend
or distribution of the evidences of indebtedness, cash, assets or shares of
capital stock other than such shares of Common Stock, such rights or warrants
or such other convertible or exchangeable securities (making any conversion
price reduction required by this paragraph (4)) immediately followed by (ii)
in the case of such shares of Common Stock or such rights or warrants, a
dividend or distribution thereof (making any further conversion price
reduction required by paragraph (1) or (2) of this Section, except any shares
of Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such
determination" within the meaning of paragraph (1) of this Section) or
(b) in the case of such other convertible or exchangeable securities, a
dividend or distribution of such number of shares of Common Stock as would
then be issuable upon the conversion or exchange thereof, whether or not the
conversion or exchange of such securities is subject to any conditions
(making any further conversion price reduction required by paragraph (1) of
this Section, except the shares deemed to constitute such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination," within the meaning of paragraph (1) of
this Section).
(5) In case the Company shall, by dividend or otherwise, at any
time distribute to all holders of its Common Stock cash (including any
distributions of cash out of the retained earnings of the Company but
excluding any cash that is distributed as part of a distribution requiring a
purchase price adjustment pursuant to paragraph (4) of this Section) in an
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<PAGE> 59 EX-4.1
aggregate amount that, together with (i) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash
within the 12 months preceding the date of payment of such distribution and
in respect of which no conversion price adjustment pursuant to paragraph (4)
of this Section or this paragraph (5) has been made and (ii) the portion of
the aggregate of any cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in
a Board Resolution) of consideration payable in respect of any tender offer
or other negotiated purchase by the Company or a Subsidiary for all or any
portion of the Company's Common Stock concluded within the 12 months
preceding the date of payment of such distribution and in respect of which no
conversion price adjustment pursuant to paragraph (7) of this Section has
been made that is in excess of an amount equal to the product of (x) the
number of shares of Common Stock with respect to which the aggregate tender
offer or negotiated purchase consideration is payable times (y) the average
of the daily Closing Prices per share of Common Stock in the five consecutive
Trading Days selected by the Company out of the 10 consecutive Trading Days
next succeeding the date of payment of the negotiated purchase consideration
or expiration of the tender offer, as the case may be (the "Reference
Price"), exceeds 20% of the product of the current market price per share
(determined as provided in paragraph (9) of this Section) of the Common Stock
on the date fixed for stockholders entitled to receive such distribution
times the number of shares of Common Stock outstanding on such date
(excluding shares held in the Treasury of the Company), the conversion price
shall be reduced so that the same shall equal the price determined by
multiplying such conversion price in effect immediately prior to the
effectiveness of the conversion price reduction contemplated by this
paragraph (5) by a fraction of which the numerator shall be the current
market price per share (determined as provided in paragraph (9) of this
Section) of the Common Stock on the date of such effectiveness less the
amount of cash so distributed applicable to one share of Common Stock and the
denominator shall be such current market price per share (determined as
provided in paragraph (9) of this Section) of the Common Stock on the date of
such distribution, such reduction to become effective immediately prior to
the opening of business on the day following the date fixed for the payment
of such distribution.
(6) In case the Company shall issue to an Affiliate shares of its
Common Stock at a net price per share less than the current market price per
share (determined as provided in paragraph (9) of this Section) on the date
the Company fixes the offering price of such additional shares, the
conversion price shall be reduced immediately thereafter so that it shall
equal the price determined by multiplying such conversion price in effect
immediately prior thereto by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding immediately prior to the
issuance of such additional shares plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Common
Stock so offered would purchase at the current market price and the
denominator shall be the number of shares of Common Stock that would be
outstanding immediately after the issuance of such additional shares. Such
adjustment shall be made successively whenever such an issuance is made. For
the purposes of this paragraph (6), the number of shares of Common Stock at
any time outstanding shall not include shares held in the Treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. This paragraph (6)
shall not apply to Common Stock issued to any Affiliate under bona fide
benefits plans adopted by the Board of Directors for the benefit of the
Company's directors, employees and advisers and approved by the holders of
Common Stock when required by law.
(7) In case a tender offer or other negotiated purchase (the
"Current Purchase") made by the Company or any Subsidiary for all or any
portion of the Company's Common Stock shall be consummated, if the aggregate
of any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
<PAGE>
<PAGE> 60 EX-4.1
Resolution) of consideration payable in respect of such tender offer or other
negotiated purchase is in excess of the Reference Price with respect to such
transaction, and the amount of such excess, together with (i) the portion of
the aggregate of the cash, plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in
a Board Resolution) of consideration payable in respect of any tender offer
or other negotiated purchase (the "Prior Purchase") by the Company or a
Subsidiary for all or any portion of the Company's Common Stock concluded
within the 12 months preceding the expiration of a tender offer or the
consummation of any negotiated purchase, as the case may be, that is the
subject of the Current Purchase (the "Current Purchase Expiration Time") and
in respect of which no conversion price adjustment pursuant to this paragraph
(7) has been made, that is in excess of the Reference Price with respect to
such Prior Purchase, and (ii) the aggregate amount of any distributions to
all holders of the Company's Common Stock made exclusively in cash
(specifically including distributions of cash out of retained earnings)
within the 12 months preceding the expiration of the tender offer and as to
which no adjustment pursuant to paragraph (4) or paragraph (5) of this
Section has been made, exceeds 20% of the product of the Reference Price
times the number of shares of Common Stock outstanding (including any
tendered shares but excluding any shares held in the Treasury of the Company)
at the Current Purchase Expiration Time, the conversion price shall be
reduced so that the same shall equal the price determined by multiplying such
conversion price in effect immediately prior to the Current Purchase
Expiration Time by a fraction of which the numerator shall be (i) the product
of the Reference Price times the number of shares of Common Stock outstanding
(including any tendered shares but excluding any shares held in the Treasury
of the Company) at the Current Purchase Expiration Time minus (ii) the fair
market value (determined as aforesaid) of the aggregate consideration payable
to stockholders based on the acceptance (up to any maximum specified in the
terms of the tender offer or other negotiated purchase) of all shares validly
tendered and not withdrawn or purchased in any negotiated purchase as of the
Current Purchase Expiration Time (the shares deemed so accepted or purchased,
up to any such maximum, being referred to as the "Purchase Shares") and the
denominator shall be the product of (i) such Reference Price times (ii) such
number of outstanding shares (excluding any shares held in the Treasury of
the Company) at the Current Purchase Expiration Time less the number of
Purchase Shares, such reduction to become effective immediately prior to the
opening of business on the day following the Current Purchase Expiration
Time.
(8) The reclassification of Common Stock into securities other
than Common Stock (other than any reclassification upon a consolidation or
merger to which Section 1211 applies) shall be deemed to involve (a) a
distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be deemed
to be the "Reference Date" within the meaning of paragraph (4) of this
Section), and (b) a subdivision or combination, as the case may be, of the
number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall
be deemed to be "the day upon which such subdivision becomes effective"or
"the day upon which such combination becomes effective," as the case may be,
and "the day upon which such subdivision or combination becomes effective"
within the meaning of paragraph (3) of this Section). Rights, warrants or
options issued by the Company to all holders of its Common Stock entitling
the holders thereof to subscribe for or purchase shares of Common Stock or
Preferred Stock, which rights, warrants or options (i) are deemed to be
transferred with such shares of Common Stock, (ii) are not exercisable and
(iii) are also issued in respect of future issuances of Common Stock, in each
case in clauses (i) through (iii) until the occurrence of a specified event
or events ("Trigger Event"), shall for purposes of this Section 1204 not be
deemed issued until the occurrence of the earliest Trigger Event.
<PAGE>
<PAGE> 61 EX-4.1
(9) For the purpose of any computation under this paragraph and
paragraphs (2), (4), (5) and (6) of this Section, the current market price
per share of Common Stock on any date shall be deemed to be the average of
the daily Closing Prices for the 5 consecutive Trading Days selected by the
Company commencing not more than 20 Trading Days before, and ending not later
than, the date in question; provided, however, that (i) if the "ex" date for
any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion price pursuant to
paragraph (1), (2), (3), (4), (5), (6) or (7) above occurs on or after the
20th Trading Day prior to the day in question and prior to the "ex" date for
the issuance or distribution requiring such computation, the Closing Price
for each Trading Day prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the same fraction by which the
conversion price is so required to be adjusted as a result of such other
event, (ii) if the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
conversion price pursuant to paragraph (1), (2), (3), (4), (5), (6) or (7)
above occurs on or after the "ex" date for the issuance or distribution
requiring such computation and on or prior to the day in question, the
Closing Price for each Trading Day on and after the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the reciprocal
of the fraction by which the conversion price is so required to be adjusted
as a result of such other event, and (iii) if the "ex" date for the issuance
or distribution requiring such computation is on or prior to the day in
question, after taking into account any adjustment required pursuant to
clause (ii) of this proviso, the Closing Price for each Trading Day on or
after such "ex" date shall be adjusted by adding thereto the amount of any
cash and the fair market value on the day in question (as determined by the
Board of Directors in a manner consistent with any determination of such
value for purposes of paragraph (4) or (5) of this Section, whose
determination shall be conclusive and described in a Board Resolution) of the
evidences of indebtedness, shares of capital stock or assets being
distributed applicable to one share of Common Stock as of the close of
business on the day before such "ex" date. For the purpose of any
computation under paragraph (7) of this Section, the current market price per
share of Common Stock on any date shall be deemed to be the average Closing
Prices for the 5 consecutive Trading Days selected by the Company commencing
on or after the latest (the "Commencement Date") of (i) the date 20 Trading
Days before the date in question, (ii) the date of commencement of a tender
offer requiring such computation and (iii) the date of the last amendment, if
any, of such a tender offer involving a change in the maximum number of
shares for which tenders are sought or a change in the consideration offered,
and ending not later than the expiration time with respect to the tender
offer or negotiated purchase, as the case may be; provided, however, that if
the "ex" date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the conversion price pursuant to
paragraph (1), (2), (3), (4), (5), (6) or (7) above occurs on or after the
Commencement Date and prior to the expiration time for the tender offer
requiring such computation, the Closing Price for each Trading Day prior to
the "ex" date, for such other event shall be adjusted by multiplying such
Closing Price by the same fraction by which the conversion price is so
required to be adjusted as a result of such other event. For purposes of
this paragraph, the term "ex" date, (i) when used with respect to any
issuance or distribution, means the first date on which the Common Stock
trades regular way on the relevant exchange or in the relevant market from
which the Closing Price was obtained without the right to receive such
issuance or distribution, (ii) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which the
Common Stock trades regular way on such exchange or in such market after the
time at which such subdivision or combination becomes effective, and (iii)
when used with respect to any tender offer means the first date on which the
Common Stock trades regular way on such exchange or in such market after the
expiration time of such tender offer.
<PAGE>
<PAGE> 62 EX-4.1
(10) The Company may make such reductions in the conversion price,
in addition to those required by paragraphs (1), (2), (3), (4), (5), (6), (7)
and (8) of this Section, as it considers to be advisable in order that any
event treated for federal income tax purposes as a dividend of stock or stock
rights shall not be taxable to the recipients.
(11) No adjustment in the conversion price shall be required
unless such adjustment would require an increase or decrease of at least 1%
in the conversion price; provided, however, that any adjustments which by
reason of this paragraph (11) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
(12) Anything herein to the contrary notwithstanding, in the event
the Company shall declare any dividend or distribution requiring an
adjustment in the conversion price hereunder and shall, thereafter and before
the payment of such dividend or distribution to stockholders, legally abandon
its plan to pay such dividend or distribution, the conversion price then in
effect hereunder, if changed to reflect such dividend or distribution, shall
upon the legal abandonment of such plan be changed to the conversion price
which would have been in effect at the time of such abandonment (after giving
effect to all other adjustments not so legally abandoned pursuant to the
provisions of this Article Twelve) had such dividend or distribution never
been declared.
(13) Notwithstanding any other provision of this Section 1204, no
adjustment to the conversion price shall reduce the conversion price below
the then par value per share of the Common Stock, and any such purported
adjustment shall instead reduce the conversion price to such par value. The
Company hereby covenants not to take any action (i) to increase the par value
per share of the Common Stock or (ii) that would or does result in any
adjustment in the conversion price that, if made without giving effect to the
previous sentence, would cause the conversion price to be less than the then
par value per share of the Common Stock.
SECTION 1205. Notice of Adjustments of Conversion Price.
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price
in accordance with Section 1204 and shall prepare a certificate signed
by the Treasurer of the Company setting forth the adjusted conversion
price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed (with
a copy to the Trustee) at each office or agency maintained for the
purpose of conversion of Securities pursuant to Section 1002 and each of
the Paying Agent and the Trustee, in the absence of bad faith on its
part, may rely on such certificate in determining the Conversion Price
in effect at any time, provided that the Trustee shall be under a duty
to examine such certificate to determine whether or not it conforms to
the requirements of this Indenture; and
(b) a notice stating that the conversion price has been
adjusted and setting forth the adjusted conversion price shall forthwith
be required, and as soon as practicable after it is required, such
notice shall be mailed by the Company to all Holders at their last
addresses as they shall appear in the Security Register.
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<PAGE> 63 EX-4.1
SECTION 1206. Notice of Certain Corporate Activities.
In case:
(a) the Company takes any action that would require an
adjustment in the conversion price pursuant to paragraphs (1) through
(8) of Section 1204; or
(b) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed at each office or agency maintained
for the purpose of conversion of Securities pursuant to Section 1002, and
shall cause to be mailed to all Holders at their last addresses as they shall
appear in the Security Register, at least 20 days prior to the applicable
record, effective or expiration date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such
dividend, distribution or granting of rights, warrants or options, 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 are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares
of Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up, or (z) the date on which such tender offer
commenced, the date on which such tender offer is scheduled to expire unless
extended or such negotiated purchase is scheduled to be consummated, the
consideration offered and the other material terms thereof (or the material
terms of any amendment thereto).
SECTION 1207. Company to Reserve Common Stock.
The Company, shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock, for
the purpose of effecting the conversion of Securities, the full number of
shares of Common Stock then issuable upon the conversion of all outstanding
Securities.
SECTION 1208. Taxes on Conversions.
The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant hereto. The Company shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock in a name other than that of the
Holder of the Security or Securities to be converted, and no such issue or
delivery shall be made unless and until the Person requesting such issue has
paid to the Company or Securities Registrar the amount of any such tax, or
has established to the satisfaction of the Company or Securities Registrar
that such tax has been paid.
SECTION 1209. Covenant as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 1208, the Company will pay
all taxes, liens and charges with respect to the issue thereof.
<PAGE>
<PAGE> 64 EX-4.1
The Company will endeavor promptly to comply with all federal and
state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Securities, if any, and will list or cause to have
quoted such shares of Common Stock on each national securities exchange or in
the over-the-counter market or such other market on which the Common Stock is
then listed or quoted.
SECTION 1210. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.
SECTION 1211. Provisions in Case of Consolidation, Merger or Sale of Assets.
In case of any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the Company
(other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company) or any sale, transfer or lease of all or substantially all of
the Company's properties or assets, the Person formed by such consolidation
or resulting from such merger or which acquires such assets, as the case may
be, shall execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then outstanding and such Person
shall have the right thereafter, during the period such Security shall be
convertible as specified in Section 1201, to convert such Security only into
the kind and amount of securities, cash and other property receivable, if
any, upon such consolidation, merger, sale, transfer or lease by a holder of
the number of shares of Common Stock of the Company into which such Security
might have been converted immediately prior to such consolidation, merger,
sale, transfer or lease, assuming such holder of Common Stock of the Company
(i) is not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale,
transfer or lease was made, as the case may be ("Constituent Person"), or an
Affiliate of a Constituent Person and (ii) failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, sale, transfer or lease
(provided that if the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale, transfer or lease is not
the same for each share of Common Stock of the Company held immediately prior
to such consolidation, merger, sale, transfer or lease by other than a
Constituent Person or an Affiliate thereof and in respect of which such right
of election shall not have been exercised ("non-electing share"), then for
the purpose of this Section the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale, transfer or lease
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, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in
this Article. The above provisions of this Section shall similarly apply to
successive consolidations, mergers, sales, transfers and leases.
SECTION 1212. Trustee Adjustment Disclaimer.
The Trustee has no duty to determine when an adjustment under this
Article Twelve should be made, how it should be made or what it should be.
The Trustee has no duty to determine whether a supplemental indenture under
Section 1211 need be entered into or whether any provisions of any
supplemental indenture are correct. The Trustee shall not be accountable for
<PAGE>
<PAGE> 65 EX-4.1
and makes no representation as to the validity or value of any securities or
assets issued upon conversion of Securities. The Trustee shall not be
responsible for the Company's failure to comply with this Article Twelve.
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 1301. Agreement to Subordinate by Company.
Notwithstanding anything in this Indenture to the contrary (other
than the last paragraph of Section 1505), the Company, for itself, its
successors and assigns, covenants and agrees, and each Holder of Securities,
by his acceptance thereof, likewise covenants and agrees, that payment by the
Company of the principal of and premium, if any, and interest on each and all
of the Securities, and payment in respect of any repurchase of the Securities
pursuant to Section 1401, is hereby expressly subordinated, to the extent and
in the manner hereinafter set forth, in right of payment to the prior payment
in full of all Senior Indebtedness.
SECTION 1302. Distribution on Dissolution, Liquidation and Reorganization:
Subrogation.
Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company,
whether in bankruptcy, insolvency, reorganization or receivership proceeding
or upon an assignment for the benefit of creditors or any other marshalling
of the assets and liabilities of the Company or otherwise (subject to the
power of a court of competent jurisdiction to make other equitable provision
reflecting the rights conferred in this Indenture upon the Senior
Indebtedness and the holders thereof, with respect to the Securities and the
holders thereof, by a lawful plan of reorganization under applicable
bankruptcy law),
(a) the holders of all Senior Indebtedness shall be entitled
to receive payment in full of the principal thereof, premium, if any,
and the interest due thereon before the Holders of the Securities are
entitled to receive any payment upon the principal of or premium, if
any, or interest on indebtedness evidenced by the Securities; and
(b) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to which
the Holders of the Securities or the Trustee would be entitled except
for the provisions of this Article Thirteen shall be paid by the
liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of Senior Indebtedness or
their representative or representatives or to the trustee or trustees
under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the principal of,
premium, if any, and interest on the Senior Indebtedness held or
represented by each, to the extent necessary to make payments in full
of all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior
Indebtedness; and
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<PAGE> 66 EX-4.1
(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, shall be received by
the Holders of the Securities or by the Trustee before all Senior
Indebtedness is paid in full, such payment or distribution shall be paid
over to the holders of such Senior Indebtedness, or their representative
or representatives or to the trustee or trustees under any indenture
under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably as aforesaid, for application to the
payment of all Senior Indebtedness remaining unpaid until all such
Senior Indebtedness shall have been paid in full, after giving effect to
any concurrent payment or distribution to the holders of such Senior
Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distribution of cash, property, or
securities of the Company, applicable to Senior Indebtedness until the
principal of, premium, if any, and interest on the Securities shall be paid
in full and no such payments or distributions to the Holders of the
Securities of cash, property or securities otherwise distributable to the
holders of Senior Indebtedness shall, as between the Company, its creditors
other than the holders of Senior Indebtedness and the Holders of the
Securities be deemed to be a payment by the Company to or on account of the
Securities. It is understood that the provisions of this Article Thirteen
are and are intended solely for the purpose of defining the relative rights
of the Holders of the Securities on the one hand, and the holders of Senior
Indebtedness on the other hand. Nothing contained in this Article Thirteen
or elsewhere in this Indenture or in the Securities is intended to or shall
impair, as between the Company, its creditors other than the holders of
Senior Indebtedness and the Holders of the Security, as the case may be, the
obligations of the Company, which are unconditional and absolute, to pay to
the Holders of the Securities principal of, premium, if any, and interest on
the Securities as and when the same shall become due and payable in
accordance with their terms, or to affect the relative rights of the Holders
of the Securities and creditors of the Company other than the holders of
Senior Indebtedness, nor shall anything herein or in the Securities prevent
the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article Thirteen of the holders of
Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy. Upon any payment or
distribution of assets of the Company referred to in this Article Thirteen,
the Trustee, subject to the provisions of Section 601, shall be entitled to
rely upon a certificate of the liquidating trustee or agent or other person
making any distribution to the Trustee for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of 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 Thirteen.
The Trustee, however, shall not be deemed to owe any fiduciary duty
to the holders of Senior Indebtedness. The Trustee shall not be liable to
any such holder if it shall pay over or distribute to or on behalf of Holders
of Securities or the Company moneys or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article Thirteen.
If the Trustee or any Holder of Securities does not file a proper
claim or proof of debt in the form required in any proceeding referred to
above prior to 30 days before the expiration of the time to file such claim
in such proceeding, then the holder of any Senior Indebtedness is hereby
authorized, and has the right, to file an appropriate claim or claims for or
on behalf of such Holder of Securities.
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<PAGE> 67 EX-4.1
SECTION 1303. No Payment in Event of Default on Senior Indebtedness.
In the event that any Payment Default shall have occurred and be
continuing, then no payment on account of any principal, premium (if any),
interest, redemption or repurchase of the Securities shall be made unless and
until such Payment Default shall have been cured or waived or shall have
ceased to exist or all amounts then due and payable in respect of Senior
Indebtedness shall have been paid in full, or provision shall have been made
for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Indebtedness.
In the event that any Non-Payment Default shall have occurred with
respect to any Senior Indebtedness and be continuing, then, upon the receipt
by the Trustee of written notice of such Non-Payment Default from a holder of
such Senior Indebtedness or a representative thereof, no payment on account
of any principal, premium (if any), interest, redemption or repurchase of the
Securities shall be made during the period (the "Payment Blockage Period")
commencing on the date of such receipt of such written notice and ending on
the earlier of (i) the date on which the Trustee shall have received written
notice of such Non-Payment Default shall have been cured or waived or shall
have ceased to exist or any acceleration of the Senior Indebtedness to which
such Non-Payment Default relates shall have been rescinded or annulled or
such Senior Indebtedness shall have been discharged and (ii) the 180th day
after the date of such receipt of such written notice. During any 360-day,
period the aggregate of all Payment Blockage Periods shall not exceed 180
days and there shall be a period of at least 180 consecutive days in each
360-day period when no Payment Blockage Period is in effect. For all
purposes of this paragraph, no Payment Default or Non-Payment Default that
existed or was continuing on the date of commencement of any Payment Blockage
Period shall be, or be made, the basis for the commencement of a subsequent
Payment Blockage Period by Holders of Senior Indebtedness or their
representatives unless such Payment Default or Non-Payment Default shall have
been cured for a period of not less than 60 consecutive days.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by
the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, be actually known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over
and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 1302 would be applied.
SECTION 1304. Payments Permitted.
Nothing contained in this Indenture or in any of the Securities
shall (a) affect the obligation of the Company to make, or prevent the
Company from making, at any time, except as provided in Sections 1302 and
1303, payments of principal of, premium, if any, or interest on the
Securities or (b) prevent the application by the Trustee of any moneys
deposited with it hereunder to the payment of or on account of the principal
of, premium, if any, or interest on the Securities unless the Trustee shall
have received at its Corporate Trust Office written notice of any event
prohibiting the making of such payment more than two Business Days prior to
the date fixed for such payment.
<PAGE>
<PAGE> 68 EX-4.1
SECTION 1305. Authorization to Trustee to Effect Subordination.
Each Holder of Securities by his acceptance thereof authorizes and
directs the Trustee in his behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article
Thirteen and appoints the Trustee his attorney-in-fact for any and all such
purposes.
SECTION 1306. Notices to Trustee.
Notwithstanding the provisions of this Article or any other
provisions of this Indenture, neither the Trustee nor any Paying Agent (other
than the Company) shall be charged with knowledge of the existence of any
Senior Indebtedness or of any event which would prohibit the making of any
payment of moneys to or by the Trustee or such Paying Agent, unless and until
the Trustee or such Paying Agent shall have received (in the case of the
Trustee, at its Corporate Trust Office) written notice thereof from the
Company or from the holder of any Senior Indebtedness or from the trustee for
any such holder, together with proof satisfactory to the Trustee of such
holding of Senior Indebtedness or of the authority of such trustee; provided,
however, that if at least two Business Days prior to the date upon which by
the terms hereof any such moneys may become payable for any purpose
(including, without limitation, the payment of either the principal of,
premium, if any, or interest on any Security) the Trustee shall not have
received with respect to any such moneys the notice provided for in this
Section 1306, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have the full power and authority to
receive such moneys and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary, which may
be received by it on or after such two Business Days prior to such date. The
Trustee shall be entitled to rely on the delivery to it of a written notice
by a person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such a notice has been
given by a holder of Senior Indebtedness or a trustee on behalf of any such
holder. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Thirteen, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such person, the extent to which such person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such person under this Article Thirteen and, if
such evidence is not furnished, the Trustee may defer any payment to such
person pending judicial determination as to the right of such person to
receive such payment.
SECTION 1307. Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this
Article Thirteen in respect of any Senior Indebtedness at any time held by it
to the same extent as any other holding of Senior Indebtedness and nothing in
Section 613 or elsewhere in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
SECTION 1308. Modification of Terms of Senior Indebtedness.
Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under any instrument creating or evidencing Senior Indebtedness,
including without limitation the waiver of defaults thereunder, may be made
or done all without notice to or assent from the Holders of the Securities or
the Trustee.
<PAGE>
<PAGE> 69 EX-4.1
No compromise, alteration, amendment, modification, extension,
renewal or other change of, or waiver, consent or other action in respect of,
any liability or obligation under or in respect of, or of any of the terms,
covenants or conditions of any indenture or other instrument under which any
Senior Indebtedness or of such Senior Indebtedness, whether or not such
release is in accordance with the provisions of any applicable document,
shall in any way alter or affect any of the provisions of this Article
Thirteen or of the Securities relating to the subordination thereof.
ARTICLE FOURTEEN
RIGHT TO REQUIRE REPURCHASE
SECTION 1401. Repurchase of Securities at Option of the Holder upon Change
of Control.
(a) If at any time there shall have occurred a Change of
Control with respect to the Company, each Holder shall have the right,
at such Holder's option, subject to the terms and conditions of this
Indenture, to require the Company to repurchase all or a portion of such
Holder's Securities (in denominations of $1,000 or integral multiples
thereof), at the purchase price equal to 100% of the principal amount
plus accrued interest to the Change of Control Purchase Date (the
"Change of Control Purchase Price"), on the date (the "Change of Control
Purchase Date") that is 60 days after the date the Company's Change of
Control Notice (as defined below) is mailed (or such later date as is
required by law), subject to substantial satisfaction by or on behalf of
the Holder of the requirements set forth in Section 1401(c). Promptly,
but in any event within 30 days following any such Change of Control,
the Company hereby covenants, with respect to any Senior Indebtedness
that would prohibit the repurchase of Securities by the Company in the
event of such Change of Control, to: either (i) repay all such Senior
Indebtedness in full, in cash; or (ii) obtain the requisite consents
under such Senior Indebtedness or any agreement pursuant to which any
such Senior Indebtedness is issued to permit the repurchase of the
Securities as provided below. The foregoing shall in no way limit the
occurrence of an Event of Default, including an Event of Default arising
from a default under the covenants of the second sentence of this
Section 1401(a), and the right to demand payment of the Securities upon
acceleration thereafter.
(b) Within 20 days after the occurrence of a Change of
Control, the Company covenants that it shall mail a written notice (the
"Change of Control Notice") of Change of Control by first-class mail to
the Trustee and to each Holder (and to beneficial owners as required by
applicable law) and shall cause a copy of such notice to be published in
a daily newspaper of national circulation. The notice shall state:
(1) the events causing a Change of Control (specifying such
event) and the date of such Change of Control;
(2) the date by which the Change of Control Purchase Notice
(as defined below) pursuant to this Section 1401 must be given;
(3) the Change of Control Purchase Date;
(4) the Change of Control Purchase Price;
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<PAGE> 70 EX-4.1
(5) the name and address of the Paying Agent and the
conversion agent;
(6) the conversion price and any adjustments thereto;
(7) that Securities as to which a Change of Control Purchase
Notice has been given may be converted into Common Stock only if
the Change of Control Purchase Notice has been withdrawn in
accordance with the terms of this Indenture;
(8) the procedures the Holder must follow to exercise rights
under this Section 1401 and a brief description of such rights;
(9) a brief description of the conversion rights of the
Securities; and
(10) the procedures for withdrawing a Change of Control
Purchase Notice.
The Change of Control Notice shall also state whether or not the Company has
satisfied its obligations to the holders of the Senior Indebtedness of the
type referred to in Section 1401(a) as required pursuant to Section 1401(a).
If the Company is unable to satisfy such obligations, the Change of Control
Notice shall also state that the Company is or will be in default under
Section 501(4) of the Indenture, that receipt by the Company of one or more
Change of Control Purchase Notices by Holders of at least 25% of the
outstanding Securities will constitute a Notice of Default thereunder, and
that the failure of the Company to cure such default within 60 days (or the
then applicable time period) shall be an Event of Default allowing the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities to declare the principal of all the Securities to be
due and payable immediately.
(c) A Holder may exercise its rights specified in Section
1401(a) upon delivery of a written notice of purchase (a "Change of
Control Purchase Notice") to the Paying Agent at any time prior to the
close of business on the Change of Control Purchase Date, stating:
(1) the certificate number or numbers of the Security or
Securities which the Holder will deliver to be purchased;
(2) the portion of the principal amount of the Security or
Securities which the Holder will deliver to be repurchased, which
portion must be $1,000 or an integral multiple thereof; and
(3) that such Security or Securities shall be repurchased
pursuant to the terms and conditions specified in this Article
Fourteen.
The delivery of such Security or Securities to the Paying Agent prior to, on
or after the Change of Control Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent shall be a condition to the
receipt by the Holder of the Change of Control Purchase Price therefor;
provided, however, that such Change of Control Purchase Price shall be so
paid pursuant to this Section 1401 only if the Security or Securities so
delivered to the Paying Agent shall conform in all respects to the
description thereof set forth in the related Change of Control Purchase
Notice. The Company shall repurchase from the Holder thereof, pursuant to
this Section 1401, a portion of a Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000. Any repurchase by the
Company contemplated pursuant to the provisions of this Section 1401 shall be
<PAGE>
<PAGE> 71 EX-4.1
consummated by the delivery of the consideration to be received by the Holder
promptly following the later of the Change of Control Purchase Date and the
time of delivery of the Security. Notwithstanding anything herein to the
contrary, any Holder delivering to the Paying Agent the Change of Control
Purchase Notice contemplated by this Section 1401(c) shall have the right to
withdraw such Change of Control Purchase Notice at any time prior to the
close of business on the Change of Control Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section
1401.
SECTION 1402. Effect of Change of Control Purchase Notice.
Upon receipt by the Company of the Change of Control Purchase
Notice specified in Section 1401, the Holder of the Security in respect of
which such notice was given shall (unless such notice is withdrawn as
specified in the following paragraph) thereafter be entitled to receive
solely the Change of Control Purchase Price with respect to such Security.
Such price shall be paid to such Holder (provided the conditions in Section
1401 have been satisfied) promptly following the later of (x) the Change of
Control Purchase Date with respect to such Security and (y) the time of
delivery of such Security to the Paying Agent by the Holder thereof in the
manner required by Section 1401(c). Securities in respect of which a Change
of Control Purchase Notice has been given by the Holder thereof may not be
converted into shares of Common Stock on or after the date of the delivery of
such Change of Control Purchase Notice unless such notice has first been
validly withdrawn as specified in the following paragraph.
A Change of Control Purchase Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Paying Agent at
any time prior to the close of business on the Change of Control Purchase
Date specifying:
(1) the certificate number or numbers of the Security or
Securities in respect of which such notice of withdrawal
is being submitted;
(2) the portion of the principal amount of the Security or
Securities with respect to which such notice of
withdrawal is being submitted, which amount must be
$1,000 or an integral multiple thereof; and
(3) the portion of the principal amount, if any, of such
Security or Securities which remains subject to the
original Change of Control Purchase Notice and which has
been or will be delivered for purchase by the Company,
which amount must be $1,000 or an integral multiple
thereof.
In addition to the requirement that the Company must first comply
with the covenants set forth in Section 1401, there shall be no repurchase of
any Securities pursuant to Section 1401 if there has occurred (prior to, on
or after the giving, by the Holders of such Securities, of the required
Change of Control Purchase Notice) and is continuing an Event of Default.
The foregoing shall in no way limit the occurrence of an Event of Default,
including an Event of Default arising from a default under the covenants in
this Article Fourteen and the right to demand payment of the Securities upon
acceleration thereafter.
<PAGE>
<PAGE> 72 EX-4.1
SECTION 1403. Deposit of Change of Control Purchase Price.
On or before the Change of Control Purchase Date, the Company shall
deposit with the Trustee or with the Paying Agent (or, if the Company or a
Subsidiary or an Affiliate of either of them is the Paying Agent, shall
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the aggregate Change of Control Purchase Price of all the
Securities or portions thereof which are to be purchased as of the Change of
Control Purchase Date.
SECTION 1404. Securities Purchased in Part.
Any Security which is to be purchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or writing instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and make available for
delivery to the Holder of such Security, without service charge, a new
Security or Securities of any authorized denomination as requested by such
Holder in aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Security so surrendered which is not
purchased.
SECTION 1405. Covenant to Comply with Securities Laws Upon Purchase of
Securities.
In connection with any purchase of Securities under Section 1401
hereof, the Company shall, to the extent then applicable and required by law:
(i) comply with Rule 13e-4 (which term, as used herein, includes any
successor provision thereto) under the Exchange Act; (ii) file the related
Schedule 13E-4 (or any successor or similar schedule, form or report) under
the Exchange Act; and (iii) otherwise comply with all federal and state
securities laws so as to permit the rights and obligations under Section 1401
to be exercised in the time and in the manner specified in Section 1401.
ARTICLE FIFTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1501. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may, at its option by Board Resolution, at any time,
elect to have either Section 1502 or Section 1503 applied to the Outstanding
Securities upon compliance with the conditions set forth below in this
Article Fifteen.
SECTION 1502. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1501
applicable to this Section 1502, the Company shall be deemed to have been
discharged from its obligations with respect to the Outstanding Securities
(including the provisions of Article Thirteen hereof) on the date the
conditions set forth below are satisfied (hereinafter, "Defeasance"). For
this purpose, such Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Outstanding
Securities and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
<PAGE>
<PAGE> 73 EX-4.1
otherwise terminated or discharged hereunder: (A) the rights of Holders of
Outstanding Securities to receive, solely from the trust fund described in
Section 1504 and as more fully set forth in such Section, payments in respect
of the principal of and premium, if any, and interest on such Securities when
such payments are due, (B) the Company's obligations with respect to such
Securities under Sections 305, 306, 702, 1002 and 1003, (C) the rights,
powers, trusts, duties and immunities of the Trustee hereunder, (D) the
Company's obligations under Article Twelve and (E) this Article Fifteen.
Subject to compliance with this Article Fifteen, the Company may
exercise its option under this Section 1502 notwithstanding the prior
exercise of its option under Section 1503.
SECTION 1503. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1501
applicable to this Section 1503, the Company (i) shall be released from its
obligations under Sections 1006, 1007 and 1008, and the provisions of Article
Thirteen hereof, and (ii) the occurrence of an event specified in Section
501(6) shall not constitute an Event of Default, and such Sections and
Article shall no longer apply with respect to or for the benefit of the
Company, the Securities, the Holders of Securities and the holders of Senior
Indebtedness on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that the Company may omit to comply with and shall
have no liability, in respect of any term, condition or limitation set forth
in any such Sections or Article whether directly or indirectly by reason of
any reference elsewhere herein to any such Sections or Article or by reason
of any reference in an) such Sections or Article to any other provision
herein or in any other document, but the remainder of this Indenture and such
Securities shall be unaffected thereby.
SECTION 1504. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 1502 or Section 1503 to the Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused
to be deposited with the Trustee (or another trustee satisfying the
requirements of Section 609 who shall agree to comply with the
provisions of this Article Fifteen applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal
and interest in respect thereof in accordance with their terms and
without further reinvestment thereof will provide, not later than one
Business Day before the due date of any payment, money in an amount, or
(C) a combination thereof in an aggregate amount, sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the
Trustee or other qualifying trustee to pay and discharge, the principal
of and premium, if any, on and each installment of interest on the
Securities on the Stated Maturity of such principal or installment of
interest on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of such Securities. For
this purpose, "U.S. Government Obligations" means securities that are
(x) direct obligations of the United States of America for the payment
of which is full faith and credit is pledged or (y) obligations of a
Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
<PAGE>
<PAGE> 75 EX-4.1
depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any
such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian
for the account of the holder of such depository receipt; provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such depository
receipt.
(2) In the case of an election under Section 1502, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Services a ruling or (y) since the
date of this Indenture there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that the Holders of the Outstanding
Securities will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit, defeasance and discharge and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance had not occurred.
(3) In the case of an election under Section 1503, the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of the Outstanding Securities will not recognize
gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such deposit and Covenant Defeasance had not occurred.
(4) The Company shall have delivered to the Trustee an
Officers' Certificate to the effect that the Securities, if then listed
on any securities exchange, will not be delisted as a result of such
deposit, in the case of an election under Section 1502 or 1503.
(5) At the time of such Defeasance of Covenant Defeasance:
(A) no default in the payment of all or a portion of principal (or
premium, if any) or interest in respect of any Senior Indebtedness shall
have occurred and be continuing, and no event of default with respect to
any Senior Indebtedness shall have occurred and be continuing and shall
have resulted in such Senior Indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise have become
due and payable and (b)(i) no other event of default with respect to any
Senior Indebtedness shall have occurred and be continuing permitting the
holders of such Senior Indebtedness (or a trustee on behalf of the
holders thereof) to declare such Senior Indebtedness due and payable
prior to the date on which it would otherwise have become due and
payable, (ii) no judicial proceeding shall be pending with respect to
any such event of default and (iii) the Company and the Trustee shall
not have received a notice with respect to any such event of default
from any holder of Senior Indebtedness (or their representative or
representatives) or, in the case of either clause (A) or clause (B)
above, each such default or event of default shall have been cured or
waived or shall have ceased to exist.
(6) No Event of Default or event which with notice or lapse
of time or both would become an Event of Default shall have occurred and
be continuing on the date of such deposit or, insofar as subsections
501(7) and (8) are concerned, at any time during the period ending on
the 91st day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of
such period).
<PAGE>
<PAGE> 75 EX-4.1
(7) Such Defeasance or Covenant Defeasance shall not cause
the Trustee to have a conflicting interest as defined in Section 608 and
for purposes of the Trust Indenture Act with respect to any securities
of the Company.
(8) Such Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it
is bound.
(9) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions present provided for relating to either the Defeasance under
Section 1502 or the Covenant Defeasance under Section 1503 (as the case
may be) have been complied with.
(10) Such Defeasance or Covenant Defeasance shall not result
in the trust arising from such deposit to constitute, unless it is
qualified as, a regulated investment company under the Investment
Company Act of 1940, as amended.
(11) The subordination provisions of Article Thirteen shall
no longer apply to the Securities upon such Defeasance or Covenant
Defeasance.
SECTION 1505. Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee -- collectively for
purposes of this Section 1505, the "Trustee") pursuant to Section 1504 shall
be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
(and premium, if any) and interest, but such money need not be segregated
from other funds except to the extent required by law. Money so held in
trust, to the extent allocated for the payment of Securities shall not be
subject to the provisions of Article Thirteen.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1504 or the principal and interest
received in respect thereof other than any such tax, fee or other charge
which by law, is for the account of the Holders of the Outstanding
Securities.
Anything in this Article Fifteen to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon
Company Request any money or U.S. Government Obligations held by it as
provided in Section 1504 which, in the opinion of a nationally, recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount hereof which
would then be required to be deposited to effect an equivalent Defeasance or
Covenant Defeasance.
The provision for subordination of the Securities set forth in
Article Thirteen are hereby expressly made subject to the provisions for
Defeasance or Covenant Defeasance in this Article Fifteen and, anything
herein to the contrary notwithstanding, upon the effectiveness of such
Defeasance or Covenant Defeasance, such Securities shall thereupon cease to
be so subordinated.
<PAGE>
<PAGE> 76 EX-4.1
SECTION 1506. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money in
accordance with Section 1502 or 1503 by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under this Indenture
and the Securities shall be revived and reinstated as though no deposit had
occurred pursuant to this Article Fifteen until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1502 or 1503; provided, however, that if the Company makes any payment of
principal of (or premium, if any) or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the
money held by the Trustee or Paying Agent.
* * *
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
<PAGE>
<PAGE> 77 EX-4.1
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
THE PEP BOYS - MANNY, MOE & JACK
By:________________________________________
Name:
Title:
Attest:
________________________
Name:
Title
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
as Trustee
By:________________________________________
Name:
Title:
Attest:
________________________
Name:
Title:
<PAGE>
<PAGE>
<PAGE> 1 EX-5
[WILLKIE FARR & GALLAGHER LETTERHEAD]
August 17, 1994
The Pep Boys - Manny, Moe & Jack
3111 West Allegheny Avenue
Philadelphia, Pennsylvania 19132
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
The Pep Boys - Manny, Moe & Jack (the "Company") has requested our opinion
in connection with the Registration Statement on Form S-3 (the
"Registration Statement") relating to (i) the Convertible Subordinated
Notes due 1999 of the Company (the "Notes") and (ii) the shares of Common
Stock, par value $1.00 per share, of the Company, issuable upon conversion
of the Notes (the "Shares"). The Notes will be issued under an Indenture
(the "Indenture") to be entered into by the Company and First Fidelity
Bank, National Association, as Trustee, (the "Trustee") and sold pursuant
to the terms of an underwriting agreement to be executed by the Company
and CS First Boston Corporation (the "Underwriter").
We have examined copies of the Certificate of Incorporation and Bylaws of
the Company, the Registration Statement, all resolutions adopted by the
Company's Board of Directors and other records and documents that we have
deemed necessary for the purpose of this opinion. We have also examined
such other documents, papers, statutes and authorities as we have deemed
necessary to form a basis for the opinion hereinafter expressed.
In our examination, we have assumed the genuineness of all signatures and
the conformity to original documents of all copies submitted to us. As to
various questions of fact material to our opinion, we have relied on
statements and certificates of officers and representatives of the Company
and public officials. In rendering this opinion, we have also assumed
that there will be no changes in applicable law or facts between the date
hereof and any date of issuance of Notes or Shares and that the provisions
of all applicable federal and state securities laws have been complied
with.
<PAGE>
<PAGE> 2 EX-5
Based upon and subject to the foregoing, we are of the opinion that:
1. The Notes have been duly authorized and, when duly executed,
authenticated and delivered by or on behalf of the Company, duly
authenticated by the Trustee and duly paid for by the Underwriter, will be
binding obligations of the Company and entitled to the benefits of the
Indenture; and
2. The Shares have been duly authorized and duly reserved for
issuance upon conversion of the Notes and, when issued and delivered
pursuant to the terms of the Indenture, will be validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Legal Matters" in the Registration Statement.
Very truly yours,
/s/ Willkie Farr & Gallagher
<PAGE>
<PAGE>
<PAGE> 1 EX-12.2
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
Exhibit 12.2 - Calculation of Ratio of Earnings
to Fixed Charges for the 13 weeks
ended April 30, 1994 and May 1, 1993
- --------------------------------------------------------------------------
13 Weeks Ended
---------------------------------
(in thousands, except ratios) April 30, 1994 May 1, 1993
- --------------------------------------------------------------------------
Interest $ 5,720 $ 5,012
Interest factor in rental expense 1,469 1,364
Capitalized interest 341 166
- --------------------------------------------------------------------------
(a) Fixed charges, as defined $ 7,530 $ 6,542
- --------------------------------------------------------------------------
Earnings before income taxes and
cumulative effect of change in
accounting principle $27,980 $21,169
Fixed charges 7,530 6,542
Capitalized interest (341) (166)
- --------------------------------------------------------------------------
(b) Earnings, as defined $35,169 $27,545
- --------------------------------------------------------------------------
(c) Ratio of earnings to fixed charges
(b divided by a) 4.7x 4.2x
- --------------------------------------------------------------------------
<PAGE>
<PAGE>
<PAGE> 1 EX-23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Pep Boys - Manny, Moe & Jack on Form S-3 of our report dated March 22,
1994, appearing in the Annual Report on Form 10-K of The Pep Boys - Manny,
Moe & Jack for the year ended January 29, 1994 and to the reference to us
under the headings "Selected Financial Data" and "Experts" in the Prospectus,
which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
August 16, 1994
<PAGE>
<PAGE>
<PAGE> 1 EX-25
______________
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) _____
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
(Name of Trustee)
22-1147033
(I.R.S. Employer Identification No.)
175 WEST BROADWAY, SALEM, NEW JERSEY
(Address of Principal Executive Offices)
08079
(Zip Code)
THE PEP BOYS - MANNY, MOE & JACK
(Name of Obligor)
PENNSYLVANIA
(State of Incorporation)
23-0962915
(I.R.S. Employer Identification No.)
3111 WEST ALLEGHENY AVENUE
PHILADELPHIA, PENNSYLVANIA
(Address of Principal Executive Offices)
19132
(Zip Code)
CONVERTIBLE SUBORDINATED NOTES due 1999
(Title of Indenture Securities)
<PAGE>
<PAGE> 2 EX-25
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:
Comptroller of the Currency
United States Department of the Treasury
Washington, D.C. 20219
Federal Reserve Bank (3rd District)
Philadelphia, Pennsylvania 19106
Federal Deposit Insurance Corporation
Washington, D.C. 20429
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
3. Voting securities of the trustee.
Furnish the following information as to each class of voting
securities of the trustee:
Not applicable - see answer to item 13.
4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, furnish the following information:
Not applicable - see answer to item 13.
<PAGE>
<PAGE> 3 EX-25
5. Interlocking directorates and similar relationships with the
obligor or underwriters.
If the trustee or any of the directors or executive officers
of the trustee is a director, officer, partner, employee,
appointee, or representative of the obligor or of any underwriter
for the obligor, identify each such person having any such
connection and state the nature of each such connection.
Not applicable - see answer to item 13.
6. Voting securities of the trustee owned by the obligor or its
officials.
Furnish the following information as to the voting securities
of the trustee owned beneficially by the obligor and each director,
partner, and executive officer of the obligor:
Not applicable - see answer to item 13.
7. Voting securities of the trustee owned by underwriters or
their officials.
Furnish the following information as to the voting securities
of the trustee owned beneficially by each underwriter for the
obligor and each director, partner, and executive officer of each
such underwriter:
Not applicable - see answer to item 13.
8. Securities of the obligor owned or held by the trustee.
Furnish the following information as to securities of the
obligor owned beneficially or held as collateral security for
obligations in default by the trustee:
Not applicable - see answer to item 13.
9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral
security for obligations in default any securities of an
underwriter for the obligor, furnish the following information
<PAGE>
<PAGE> 4 EX-25
as to each class of securities of such underwriter any of which are
so owned or held by the trustee:
Not applicable - see answer to item 13.
10. Ownership or holdings by the trustee of voting securities of
certain affiliates or security holders of the obligor.
If the trustee owns beneficially or holds as collateral
security for obligations in default voting securities of a person
who, to the knowledge of the trustee (1) owns 10 percent or more of
the voting stock of the obligor or (2) is an affiliate, other than
a subsidiary, of the obligor, furnish the following information as
to the voting securities of such person:
Not applicable - see answer to item 13.
11. Ownership or holdings by the trustee of any securities of a
person owning 50 percent or more of the voting securities of
the obligor.
If the trustee owns beneficially or holds as collateral
security for obligations in default any securities of a person who,
to the knowledge of the trustee, owns 50 percent or more of the
voting securities of the obligor, furnish the following information
as to each class of securities of such person any of which are so
owned or held by the trustee:
Not applicable - see answer to item 13.
12. Indebtedness of the obligor to the trustee.
Except as noted in the instructions, if the obligor is
indebted to the trustee, furnish the following information:
Not applicable - see answer to item 13.
13. Defaults by the obligor.
(a) State whether there is or has been a default with respect
to the securities under this indenture. Explain the nature of any
such default.
None.
(b) If the trustee is a trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the obligor are
<PAGE>
<PAGE> 5 EX-25
outstanding, or is trustee for more than one outstanding series of
securities under the indenture, state whether there has been a
default under any such indenture or series, identify the indenture
or series affected, and explain the nature of any such default.
None.
14. Affiliations with the underwriters.
If any underwriter is an affiliate of the trustee, describe
each such affiliation.
Not applicable - see answer to item 13.
15. Foreign trustee.
Identify the order or rule pursuant to which the trustee is
authorized to act as sole trustee under indentures qualified or to
be qualified under the Act.
Not applicable - trustee is a national banking association
organized under the laws of the United States.
16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
1. Copy of Articles of Association of the trustee as now in
- ---- effect.*
2. Copy of the Certificate of the Comptroller of the
- ---- Currency dated January 11, 1994, evidencing the authority
of the trustee to transact business.*
3. Copy of the authorization of the trustee to exercise
- ---- fiduciary powers.*
4. Copy of existing by-laws of the trustee.*
- ----
5. Copy of each indenture referred to in Item 4, if the
- ---- obligor is in default, not applicable.
X 6. Consent of the trustee required by Section 321(b) of the
- ---- Act.
<PAGE>
<PAGE> 6 EX-25
X 7. Copy of report of condition of the trustee at the close
- ---- of business on June 30, 1994, published pursuant to the
requirements of its supervising authority.
8. Copy of any order pursuant to which the foreign trustee
- ---- is authorized to act as sole trustee under indentures
qualified or to be qualified under the Act, not
applicable.
9. Consent to service of process required of foreign
- ---- trustees pursuant to Rule 10a-4 under the Act, not
applicable.
_____________________
*Previously filed with the Securities and Exchange
Commission on February 11, 1994 as an exhibit to Form T-1 in
connection with Registration Statement No. 22-73340 and
incorporated herein by reference.
NOTE
The trustee disclaims responsibility for the accuracy or
completeness of information contained in this Statement of
Eligibility and Qualification not known to the trustee and not
obtainable by it through reasonable investigation and as to which
information it has obtained from the obligor and has had to rely or
will obtain from the principal underwriters and will have to rely.
<PAGE>
<PAGE> 7 EX-25
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, the trustee, First Fidelity Bank, National Association, a
national banking association organized and existing under the laws
of the United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Philadelphia and
Commonwealth of Pennsylvania, on the 16th day of August, 1994.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
By:/s/John H. Clapham
------------------------------
John H. Clapham
Assistant Vice President
<PAGE>
<PAGE> 8 EX-25
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the
Trust Indenture Act of 1939, and in connection with the
proposed issue of The Pep Boys - Manny, Moe & Jack, we hereby
consent that reports of examinations by Federal, State,
Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon
request therefor.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
By:/s/John H. Clapham
-------------------------------
John H. Clapham
Assistant Vice President
Philadelphia, Pennsylvania
August 16, 1994
<PAGE>
<PAGE> 9 EX-25
EXHIBIT T-7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Fidelity Bank,
National Association of Salem in the state of New Jersey, at the close of
business on June 30, 1994, published in response to call made by Comptroller
of the Currency, under title 12, United States Code, Section 161. Charter
Number 33869 Comptroller of the Currency Northeastern District.
Statement of Resources and Liabilities
ASSETS
Thousand of
Dollars
-----------
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin......... 1,515,147
Interest-bearing balances.................................. 439,530
Securities................................................... /////////
Hold-to-maturity securities................................ 3,418,048
Available-for-sale securities.............................. 2,832,519
Federal funds sold and securities purchased under agreements //////////
to resell in domestic offices of the bank and of it //////////
Edge and Agreement subsidiaries, and in IBFs: //////////
Federal funds sold..................................... 558,540
Securities purchased under agreements to resell........ 276,261
Loans and lease financing receivables:
Loan and leases, net of unearned income......18,542,773
LESS: Allowance for loan and lease losses.......515,420
LESS: Allocated transfer risk reserve.................0
Loans and leases, net of unearned income, allowance, and
reserve................................................. 18,027,353
Assets held in trading accounts............................... 161,733
Premises and fixed assets (including capitalized leases)...... 337,978
Other real estate owned....................................... 135,958
Investment in unconsolidated subsidiaries and associated //////////
companies..................................................... 11,646
Customer's liability to this bank on acceptances outstanding... 194,720
Intangible assets............................................. 291,235
Other assets.................................................. 482,637
Total assets.................................................. 28,683,305
LIABILITIES
Deposits:
In domestic offices..................................... 22,688,126
Noninterest-bearing..........................4,564,800
Interest-bearing............................18,123,326
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................ 713,517
Noninterest-bearing.............................15,866
Interest-bearing...............................697,651
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and IBFs
Federal fund purchased.................................. 861,993
Securities sold under agreements to repurchase.......... 1,091,313
Demand notes issued to the U.S. Treasury...................... 0
Trading liabilities........................................... 0
Other borrowed money:......................................... /////////
With original maturity of one year or less.............. 390
With original maturity of more than one year............ 740
Mortgage indebtedness and obligations under capitalized leases 7,009
Bank's liability on acceptances executed and outstanding..... 197,334
Subordinated notes and debentures............................ 175,000
Other liabilities............................................ 422,642
Total liabilities............................................ 26,158,064
Limited-life preferred stock and related surplus............. 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus................. 0
Common Stock.................................................. 430,000
Surplus....................................................... 985,034
Undivided profits and capital reserves........................ 1,138,808
Net unrealized holding gains (losses) on available-for-sale /////////
securities................................................... (28,601)
Cumulative foreign currency translation adjustments........... 0
Total equity capital.......................................... 2,525,241
Total liabilities, limited-life preferred stock and equity.... //////////
capital..................................................... 28,683,305
<PAGE>
