<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
[X] SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 1997
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
[ ] SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 1-10883
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WABASH NATIONAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 52-1375208
- ---------------------------------- ------------------------------------
(State of Incorporation) (IRS Employer Identification Number)
1000 Sagamore Parkway South,
Lafayette, Indiana 47905
- ------------------------------------- ----------------------------------
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (765) 448-1591
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
The number of shares of common stock outstanding at May 14, 1997 was
19,910,923.
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WABASH NATIONAL CORPORATION
INDEX
FORM 10-Q
<TABLE>
<CAPTION>
Page
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<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at
March 31, 1997 and December 31, 1996 1
Condensed Consolidated Statements of Income
for the three months ended
March 31, 1997 and 1996 2
Condensed Consolidated Statements of Cash
Flows for the three months
ended March 31, 1997 and 1996 3
Notes to Condensed Consolidated Financial
Statements 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
Item 3. Quantitative and Qualitative Disclosures About
Market Risk (Not Applicable)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
</TABLE>
<PAGE> 3
WABASH NATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
-------------- -----------
(Unaudited) (Note 1)
<S> <C> <C>
ASSETS
------
CURRENT ASSETS:,
Cash and cash equivalents $ 8,726 $ 5,514
Accounts receivable, net 90,005 71,166
Current portion of finance contracts 6,671 6,128
Inventories 153,694 140,015
Prepaid expenses and other 14,348 13,087
---------- ----------
Total current assets 273,444 235,910
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, net 83,980 81,782
---------- ----------
EQUIPMENT LEASED TO OTHERS, net 69,254 63,825
---------- ----------
FINANCE CONTRACTS, net of current portion 45,538 43,858
---------- ----------
OTHER ASSETS 19,372 14,696
---------- ----------
$ 491,588 $ 440,071
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current maturities of long-term debt $ 3,786 $ 3,942
Accounts payable 73,558 69,155
Accrued liabilities 15,484 14,101
---------- ----------
Total current liabilities 92,828 87,198
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LONG-TERM DEBT, net of current maturities 195,477 151,307
---------- ----------
DEFERRED INCOME TAXES 24,222 22,879
---------- ----------
OTHER NONCURRENT LIABILITIES 390 319
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STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 25,000,000
shares authorized; no shares issued --- ---
Series A Junior Participating Preferred stock,
$.01 per value, 300,000 shares authorized; no
shares issued --- ---
Common stock, $.01 par value, 75,000,000
shares authorized; 18,910,923 and 18,910,923
shares issued and outstanding, respectively 189 189
Additional paid-in capital 99,388 99,388
Retained earnings 80,373 80,070
Treasury stock, at cost, 59,600 and 59,600
shares, respectively (1,279) (1,279)
---------- ----------
178,671 178,368
---------- ---------
$ 491,588 $ 440,071
========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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WABASH NATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1997 1996
---- ----
(Unaudited) (Unaudited)
<S> <C> <C>
NET SALES $135,087 $161,222
COST OF SALES 127,054 152,153
-------- --------
Gross profit 8,033 9,069
GENERAL AND ADMINISTRATIVE
EXPENSES 2,154 1,945
SELLING EXPENSES 1,136 1,048
-------- --------
Income from operations 4,743 6,076
OTHER INCOME (EXPENSE)
Interest Expense (3,369) (2,588)
Other, net 91 139
-------- --------
Income before income taxes 1,465 3,627
PROVISION FOR INCOME TAXES 596 1,423
-------- --------
Net Income $ 869 $ 2,204
======== ========
NET INCOME PER SHARE $ 0.05 $ 0.12
======== ========
CASH DIVIDENDS PER SHARE $ 0.03 $ 0.03
======== ========
AVERAGE SHARES OUTSTANDING 18,910,923 18,927,101
========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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WABASH NATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-------------------
1997 1996
-------- -------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 869 $ 2,204
Adjustments to reconcile net income to net
cash (used in) operating
activities-
Depreciation and amortization 4,558 3,705
Bad debt provision 138 180
Deferred income taxes 1,374 298
Change in net operating assets-
(Increase) in accounts receivable (18,977) (31,630)
(Increase) in inventories (13,679) (10,000)
Decrease (increase) in prepaid expenses and
other (543) 608
(Decrease) increase in accounts payable 4,403 (10,798)
Increase in accrued liabilities 1,384 8,747
(Increase) in other assets (4,826) (196)
---------- --------
Total adjustments (26,168) (39,086)
---------- --------
Net cash used in
operating activities (25,299) (36,882)
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (4,174) (3,118)
Investment in equipment leased to others (7,421) (4,051)
Proceeds on disposal of equipment 1,719 4,993
Investment in finance contracts (5,307) (2,250)
Principal payments on finance contracts 1,263 1,215
Payments for RoadRailer technology (1,086) (638)
Other 40 (99)
---------- --------
Net cash used in investing
activities (14,966) (3,948)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of long-term debt (1,486) (3,071)
Borrowings under long-term revolver 72,000 85,000
Payments under long-term revolver (51,500) (96,500)
Proceeds from issuance of long-term debt 25,000 55,394
Proceeds from issuance of common stock,
net of expenses --- 26
Payment of common stock dividend (567) (569)
Purchase of treasury stock --- (774)
---------- --------
Net cash provided by
financing activities 43,477 39,506
---------- --------
NET INCREASE/(DECREASE) IN CASH 3,212 (1,324)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,514 2,097
---------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,726 $ 773
========== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for-
Interest $ 3,872 $ 1,803
========== ========
Income Taxes $ 1 $ 26
========== ========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES:
Finance contracts converted to operating leases $ 1,527 2,963
Used trailers transferred from inventory for
operations $ --- 1,873
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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WABASH NATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 1. GENERAL
The consolidated financial statements included herein have
been prepared by Wabash National Corporation and Subsidiaries (the Company)
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations; however, the Company believes that the disclosures are adequate to
make the information presented not misleading. The condensed consolidated
financial statements included herein should be read in conjunction with the
financial statements and the notes thereto included in the Company's 1996
Annual Report on Form 10-K.
In the opinion of the registrant, the accompanying financial
statements contain all material adjustments (consisting only of normal
recurring adjustments), necessary to present fairly the consolidated financial
position of the Company at March 31, 1997 and December 31, 1996 and its results
of operations and cash flows for the three months ended March 31, 1997 and
1996.
NOTE 2. INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------------ ------------
(Unaudited)
<S> <C> <C>
Raw material and components $ 80,095 $ 72,645
Work in progress 22,897 16,344
Finished goods 26,839 27,608
Used trailers 23,863 23,418
--------- ------
$ 153,694 $140,015
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</TABLE>
NOTE 3. LEASING AND FINANCE OPERATIONS
Wabash National Finance Corporation (the Finance Company), a
wholly-owned subsidiary of the Company, provides leasing and finance programs
to customers for new and used trailers. The Finance Company's lease revenues,
excluding revenue from the sale of leased trailers of $1,886 and $5,407, were
$5,020 and $3,066 during the three months ended March 31, 1997 and 1996,
respectively. Income before income taxes was $82 and $721 during the three
months ended March 31, 1997 and 1996, respectively. Included below is
condensed balance sheet information, which segregates the assets and
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liabilities of the Finance Company.
<TABLE>
<CAPTION>
March 31, 1997
------------------------------------------------
(Unaudited) December 31,
Wabash Finance 1996
National Company Consolidated Consolidated
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<S> <C> <C> <C> <C>
ASSETS:
Current assets $263,463 $ 9,981 $ 273,444 $ 235,910
Property, plant and
equipment, net 83,931 49 83,980 81,782
Equipment leased to
others, net --- 69,254 69,254 63,825
Finance contracts, net
of current portion --- 45,538 45,538 43,858
Other assets 19,337 35 19,372 14,696
Due from subsidiary to parent 349 (349) --- ---
Investment in subsidiary 33,817 --- --- ---
-------- -------- ----------- -----------
$400,897 $124,508 $ 491,588 $ 440,071
======== ======== =========== ===========
LIABILITIES AND STOCK-
HOLDERS' EQUITY:
Current liabilities $ 88,802 $ 4,026 $ 92,828 $ 87,198
Long-term debt, net:
Third party 176,885 18,592 195,477 151,307
Intercompany (68,000) 68,000 --- ---
-------- -------- ----------- -----------
108,885 86,592 195,477 151,307
Other non-current liabilities 24,539 73 24,612 23,198
-------- -------- ----------- -----------
222,226 90,691 312,917 261,703
Stockholders' equity 178,671 33,817 178,671 178,368
-------- -------- ----------- -----------
$400,897 $124,508 $ 491,588 $ 440,071
======== ======== ============ ===========
</TABLE>
NOTE 4. SUBSEQUENT EVENT
On April 16, 1997, the Company completed its acquisition of certain
assets of Fruehauf Trailer Corporation, a manufacturer and marketer of truck
trailers and related parts. The purchase includes assets consisting of the
Fruehauf and Pro-Par(R) names, all patents and trademarks, retail outlets in 31
major metropolitan markets, the aftermarket parts distribution business based
in Grove City, Ohio, a specialty trailer manufacturing plant in Huntsville,
Tennessee and a van manufacturing plant in Fort Madison, Iowa. For financial
statement purposes the acquisition will be accounted for as a purchase and,
accordingly, the results of operations of these assets will be included in the
Company's consolidated financial statements from the date of acquisition. The
retail outlets will operate under the name of Fruehauf Trailer Services, Inc.,
a wholly owned subsidiary of Wabash National Corporation. The purchase price
consists of approximately $15.7 million in cash, 352,000 shares of a new series
of 6% Cumulative Convertible Exchangeable Preferred Stock convertible, at April
16, 1996 into approximately .8 million shares of common stock and 1 million
shares of the Company's Common Stock, valued at $17.8 million on April 16,
1997.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Note: This document contains various forward-looking comments. These
comments should be viewed in connection with the risk factors
disclosed in the Company's Form 8-K as filed with the Securities and
Exchange Commission on January 21, 1997.
Net Sales
Net sales for the first quarter of 1997 decreased 16.2% compared to
the same period in 1996. The decrease in net sales amounted to $26.1 million
for the first quarter, 1997 and was primarily attributable to a decrease in new
trailers sales of $25.8 million. The decrease in new trailer sales of $25.8
million for the three-month period was caused by a 12% decrease in units sold,
primarily as a result of the continued limited supply of composite material for
the Company's DuraPlate(R) trailer which significantly restricted the Company's
plate trailer production and revenues, coupled with a 6.9% decrease in the
average sales price per new trailer sold. The decrease in the average sales
price primarily reflects continued pricing pressure in the commodity trailer
market which, due to the restricted production on the Company's plate trailer
line, comprised a higher percentage of the Company's sales in 1997 compared to
1996. In order to provide adequate supply of composite material for the
Company's DuraPlate trailer, the Company is in the process of constructing its
own composite material manufacturing facility in Lafayette, Indiana with
start-up expected during the third quarter of 1997 at an estimated cost of $17
million to $20 million. Also impacting the first quarter of 1997 were lost
production days during January due to adverse weather conditions.
The Finance Company's lease portfolio increased from 6,858 trailers
at March 31, 1996 to 10,414 trailers at March 31, 1997. Lease revenues,
excluding revenue from the sale of leased trailers, increased 65% compared to
the same period in 1996. Revenues from aftermarket parts sales increased 42%
for the three month period ended March 31, 1997 compared to the same period in
1996. The increase in aftermarket parts sales reflects the Company's strategy
of continuing to increase its independent dealer network and branch operations.
Gross Profit
Gross profit as a percentage of sales totaled 5.9% for the first
quarter of 1997 compared to 5.6% for the same period in 1996. The increase in
the gross profit percentage in 1997 reflects the Company's continued efforts to
improve operating margins and manufacturing efficiencies, largely impacted by
the 17% decrease in the overall number of associates during the first quarter
of 1997 compared to the same period in 1996.
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Income From Operations
Income from operations for the first quarter of 1997 as a percentage
of net sales was 3.5% versus 3.8% for the same period in 1996. Income from
operations in 1997 was impacted primarily by the decreased sales offset
somewhat by the reduction in the overall number of associates.
Interest Expense
Interest expense for the three-month period ended March 31, 1997
totaled $3.4 million compared to $2.6 million for the same period in 1996. The
increase in interest expense primarily reflects new term and bank line of
credit debt associated with the growth in the leasing operations and increased
working capital requirements.
Taxes
The provision for income taxes for the three month period ended
March 31, 1997 and 1996 of $0.6 million and $1.4 million respectively,
represents 40.7% and 39.2% of pre-tax income for the periods. The effective
tax rates are higher than the Federal statutory rates of 35% due primarily to
state income taxes.
Acquisition
As mentioned in Note 4 to the condensed consolidated financial
statements, on April 16, 1997, the Company completed its acquisition of certain
assets of Fruehauf Trailer Corporation. The assets include the Fruehauf and
Pro-Par(R) names, all patents and trademarks, retail outlets in 31 major
metropolitan markets, the aftermarket parts distribution business based in
Grove City, Ohio, a specialty trailer manufacturing plant in Huntsville,
Tennessee and a van manufacturing plant in Fort Madison, Iowa. The results of
operations of these assets will be included in the Company's consolidated
financial statements from the date of acquisition.
The purchase is valued at approximately $51 million and was
comprised of $15.7 million in cash, $17.6 million in preferred stock and 1
million shares of common stock valued at $17.8 million on April 16, 1997. The
$15.7 million in cash was financed with cash from operations and borrowings
under the Company's existing line of credit.
LIQUIDITY AND CAPITAL RESOURCES
As presented in the Condensed Consolidated Statement of Cash Flows,
net cash used in operating activities was $25.3 million during the first three
months of 1997 primarily as a result of changes in working capital. Cash was
used in operating activities primarily as a result of the increases in accounts
receivable and inventory offset partially with an increase in accounts payable.
These changes in working capital were primarily the result of the continued
weakness in the domestic trailer market as well as the Company's focus on
expansion of its product line which requires initial up front investments in
working capital.
During the first three months of 1997, the lease portfolio (finance
contracts and equipment leased to others) increased $7.7 million as the Company
continues to expand its leasing operation. In
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addition, the Company used $4.2 million of cash for capital expenditures during
the first three months of 1997, principally for the purpose of increasing
manufacturing productivity and for the construction of its composite material
facility.
At March 31, 1997, the Company's total debt was $199.3 million
compared to $155.2 million at December 31, 1996. The net increase in the
Company's debt primarily reflects new term debt associated with the increased
working capital requirements due to higher receivables and inventory levels.
Also, during March, 1997, the Company received the final installment of $25
million related to the Company's $100 million private placement issued in
December, 1996 and used the proceeds to repay amounts under the Company's
revolving line of credit.
Other sources of funds for capital expenditures, continued expansion
of businesses, dividends, principal repayments on debt, stock repurchase and
working capital requirements are expected to be cash from operations,
additional borrowings under the credit facilities and term borrowings. The
Company believes that these funding sources will be adequate for its
anticipated requirements.
BACKLOG
The Company's backlog of orders was approximately $565.7 million at
March 31, 1997 and $462.0 million at December 31, 1996. The Company builds
trailers to customer order and does not maintain an inventory of new trailers
built in anticipation of future orders.
NEW ACCOUNTING PRONOUNCEMENT
The Financial Accounting Standards Board recently released a new
accounting rule (SFAS No. 128) on the calculation of earnings per share that is
effective at year-end 1997. This rule, which does not permit early adoption,
is not expected to have a material effect on the Company's reported earnings
per share.
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
3.04 Certificate of Designations of Series A 6% Cumulative
Convertible Exchangeable Preferred Stock
4.03 Form of Indenture for the Company's 6% Convertible
Subordinated Debentures due 2007
10.30 Purchase Agreement dated March 31, 1997, as amended
(Incorporated by Reference from Exhibit 2.01
to Registrant's Form 8-K filed May 1, 1997)
15.01 Report of Independent Public Accountants
(a) Reports on Form 8-K:
1. Form 8-K filed January 21, 1997 reporting under
Item 5: Risk Factors filed under Safe Harbor provisions
of Private Securities Litigation Reform Act of 1995
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WABASH NATIONAL CORPORATION
Date: May 14, 1997 By: /s/ Mark R. Holden
---------------- -------------------
Mark R. Holden
Vice President - Chief
Financial Officer
(Principal Financial Officer
and Principal Accounting
Officer)
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EXHIBIT 3.04
CERTIFICATE OF DESIGNATION
OF
SERIES B 6% CUMULATIVE CONVERTIBLE EXCHANGEABLE
PREFERRED STOCK
OF
WABASH NATIONAL CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
I, Donald J. Ehrlich, President and Chief Executive Officer of Wabash
National Corporation, a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), in accordance
with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors of
this Corporation (the "Board") by the Certificate of Incorporation of the
Corporation, the Board on March 26, 1997, adopted the following resolution
creating a series of 352,000 shares of Preferred Stock designated as "Series B
6% Cumulative Convertible Exchangeable Preferred Stock":
RESOLVED, that pursuant to the authority vested in the Board in accordance
with the provisions of its Certificate of Incorporation, a series of Preferred
Stock of the Corporation be and it is hereby created, and the designation and
amount thereof and the voting rights or powers (including voting powers),
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof are as follows:
Section 1. Designation and Amount.
1A. The designation of the series of Preferred Stock, $.01 par value per
share, provided for herein shall be "Series B 6% Cumulative Convertible
Exchangeable Preferred Stock" (hereinafter referred to as the "Series B
Preferred"), and the number of shares constituting Series B Preferred shall be
352,000.
1B. All shares of Series B Preferred redeemed, purchased or otherwise
acquired by the Corporation shall be retired and canceled and shall be restored
to the status of authorized but unissued shares of preferred stock, without
designation as to series, and may thereafter be issued, but not as shares of
Series B Preferred.
1C. The Stated Value Per Share of the Series B Preferred shall be $50.00.
1
<PAGE> 2
1D. The Series B Preferred shall with respect to rights upon liquidation,
winding up or dissolution, and redemption rights, rank (i) junior to any other
series of Preferred Stock duly established by the Board, the terms of which
shall specifically provide that such series shall rank prior to the Series B
Preferred, whether now existing or hereafter created (the "Senior Preferred
Stock"), (ii) on a parity with any other series of Preferred Stock duly
established by the Board, the terms of which shall specifically provide that
such series shall rank on a parity with the Series B Preferred, whether now
existing or hereafter created (the "Parity Preferred Stock"), and (iii) prior
to any other class or series of capital stock of the Corporation, including,
without limitation, all classes of the Common Stock, par value $0.01 per share,
of the Corporation, whether now existing or hereafter created (the "Common
Stock"); all of such classes or series of capital stock of the Corporation to
which the Series B Preferred ranks prior, including without limitation the
Common Stock, and including, without limitation, junior securities convertible
into or exchangeable for other junior securities or phantom stock representing
junior securities, are collectively referred to herein as "Junior Securities".
Section 2. Dividends.
2A. Holders of the Series B Preferred shall receive, when, as and if
declared by the Board out of the funds of the Corporation legally available
therefor, a cash dividend per share at the annual rate of 6% of the Stated
Value Per Share (equivalent to $3.00 per share per annum), subject to
adjustment as provided below. The holders of Series B Preferred also shall be
entitled to receive any dividends paid or other distributions made on the
Common Stock as if the Series B Preferred held by such holders had been fully
converted into Common Stock. Dividends with respect to the Series B Preferred
shall be paid quarterly in arrears on March 15, June 15, September 15 and
December 15 of each year, commencing June 15, 1997 (and, in the case of any
accrued but unpaid dividends, at such additional times and for such interim
periods, if any, as determined by the Board). Dividends on the Series B
Preferred shall be cumulative (whether or not declared by the Board) and will
accrue without interest from the date of original issuance whether or not at
the time such dividend shall accrue or become due or at any time there shall be
funds legally available for the payment of dividends. Dividends shall be
payable to the holders of record as they appear on the stock books of the
transfer agent for the Corporation on such record dates, which shall be not
more than 30 days nor less than 10 days preceding the payment dates, as shall
be fixed by the Board, provided that holders of shares of Series B Preferred
called for redemption on a redemption date falling between a dividend payment
record date and the dividend payment date shall, in lieu of receiving such
dividend payment on the dividend payment date fixed therefor, receive such
dividend payment together with all other accrued and unpaid dividends on the
date fixed for redemption (unless such holders convert such shares to Common
Stock, in which case such holders will receive such payment on the
corresponding dividend payment date). Dividends payable on the Series B
Preferred for the initial dividend period and dividends payable for any period
shorter or longer than a full dividend period will be computed on the basis of
a 360-day year consisting of twelve 30-day months.
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2B. If the initial registration statement filed by the Corporation
relating to the distribution of the Series B Preferred by Fruehauf Trailer
Corporation ("Fruehauf") or its pledgee in foreclosure has not been declared
effective by the Securities and Exchange Commission within 90 days after the
date of the initial issuance of the Series B Preferred (the "Closing Date")
then the dividend rate on the Series B Preferred shall be increased from 6% to
10% during the period between the end of such 90 day period and the date on
which such Registration Statement is declared effective; provided, however,
that if the Commission refuses to declare such initial registration statement
effective due to the inability of Fruehauf to provide audited financial
statements of Fruehauf, required by the Commission for such registration
statement, then the interest rate increase described in this Section 2B shall
not be applicable unless and until 30 days following the receipt by the
Corporation of either (i) all such required audited financial statements of
Fruehauf, in form and substance acceptable to the Commission or (ii) an
effective waiver by the Commission of the requirement to provide such audited
financial statements in order to declare effective such initial registration
statement. The Corporation shall use its best efforts to cause the Commission
to issue the waiver described in clause (ii) of the preceding sentence as soon
as practicable
2C. If dividends are not paid in full upon the Series B Preferred and any
other Parity Preferred Stock, all dividends declared upon shares of Series B
Preferred and such other Parity Preferred Stock shall be declared pro rata so
that in all cases the amount of dividends declared per share on the Series B
Preferred and the other Parity Preferred Stock bear to each other the same
ratio that accrued and unpaid dividends per share on the shares of the Series B
Preferred and the other Parity Preferred Stock bear to each other. Except as
set forth above, unless full cumulative dividends on the Series B Preferred
have been paid and funds set aside, dividends (other than dividends paid solely
in Common Stock or Junior Securities and rights to acquire the foregoing) may
not be paid or declared and set aside for payment and other distributions may
not be made upon the Common Stock or Junior Securities nor may any Common
Stock, Junior Securities or rights to acquire the foregoing be redeemed,
purchased, or otherwise acquired for any consideration by the Corporation
(except for repurchases from employees under employee benefit plans and by
conversion into or exchange for Common Stock or Junior Securities).
Section 3. Liquidation.
In the event of any dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary (a "Liquidation"), the holders of
shares of Series B Preferred shall be entitled to receive out of the assets of
the Corporation legally available for distribution to stockholders (whether
representing capital or surplus), before any payment or distribution shall be
made on the Common Stock or any other Junior Securities (but after distribution
of such assets among, or payment thereof over to, creditors of the Corporation
and to holders of any stock of the Corporation with liquidation rights senior
to the Series B Preferred, including
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holders of Senior Preferred Stock), the Stated Value Per Share plus the
amount of any dividends accrued thereon through the date of distribution (the
"Series B Preferred Liquidation Distribution"). After the Series B Preferred
Liquidation Distribution has been made, the holders of shares of Series B
Preferred shall not be entitled to any further participation in any
distribution of assets of the Corporation. If the assets distributable upon
such dissolution, liquidation or winding up (as provided above) shall be
insufficient to pay cash in an amount equal to the amount of the Series B
Preferred Liquidation Distribution to the holders of shares of Series B
Preferred, then such assets or the proceeds thereof shall be distributed among
the holders of the Series B Preferred ratably in proportion to the respective
amounts of the Series B Preferred Liquidation Distribution to which they
otherwise would be entitled. The merger or consolidation of the Corporation
into or with one or more other persons or entities, a merger or consolidation
of any other person or entity with or into the Corporation upon the completion
of which the stockholders of the Corporation prior to the merger or
consolidation no longer hold a majority of the outstanding equity securities or
voting power of the Corporation or the transfer (by lease, sale, conveyance,
exchange or otherwise) of all or substantially all of the property or assets of
the Corporation in a single transaction or through a series of related
transactions, to another person or entity or group of affiliated persons or
entities or the entering of any subsidiaries of the Corporation into any such
transaction or transactions if such transactions in the aggregate would result
in a sale of all or substantially all of the properties or assets of the
Corporation and its subsidiaries on a consolidated basis (any such event or
events, a "Reorganization Event") shall, at the option of the holders of at
least 50% of the Series B Preferred, be deemed to be a Liquidation of the
Corporation. In no event shall the sale, transfer, conveyance or exchange of
such property to a wholly owned affiliate of the Company constitute a
Reorganization Event.
Section 4. Voting Rights.
4A. The holders of the Series B Preferred shall be entitled to notice of
all stockholders meetings in accordance with the Corporation's bylaws, and
except as otherwise required by law or hereinafter provided, the holders of the
Series B Preferred shall be entitled to vote on all matters submitted to the
stockholders for a vote together with the holders of the Common Stock as a
single class, and each share of Series B Preferred shall be entitled to one
vote for each share of Common Stock that would be issuable upon conversion of
such share on the record date for determining eligibility to participate in the
action being taken. In addition to any other rights provided by law, the
consent of the holders of a majority of issued and outstanding Series B
Preferred, in the aggregate and voting separately as a single class, shall be
required to authorize or effect a Reorganization Event or Liquidation.
4B. If on the date used to determine stockholders of record for any
meeting of stockholders for the election of directors, accrued dividends on the
shares of Series B Preferred shall not have been paid in an aggregate amount
equal to or greater than six quarterly dividends on the shares of Series B
Preferred at the time outstanding, then, and in any such event, the
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<PAGE> 5
number of Directors then constituting the Board shall automatically be
increased by two Directors and the holders of shares of Series B Preferred,
voting as a single class, shall be entitled at such meeting to fill such newly
created directorships. Such right to vote as a single class to elect two
Directors shall, when vested, continue until all dividends in default on the
shares of Series B Preferred shall have been paid in full and, when so paid,
such right to elect two Directors separately as a class shall cease, subject
always, to the same provisions for the vesting of such right to elect two
Directors separately as a class in the case of future dividend defaults.
4C. So long as any shares of Series B Preferred are outstanding, the
number of Directors of the Corporation shall at all times be such that the
exercise by the holders of Series B Preferred of the right to elect Directors
under the circumstances provided in paragraph 4B above will not contravene any
provisions of the General Corporation Law of the State of Delaware, as amended,
or the Certificate of Incorporation of the Corporation.
4D. Directors elected pursuant to paragraph 4B above shall serve until the
earlier of (i) the next annual meeting of stockholders of the Corporation and
the election (by the holders of shares of Series B Preferred) and qualification
of their respective successors or (ii) the date upon which all dividends in
default on the shares of Series B Preferred shall have been paid in full.
Directors elected pursuant to paragraph 4B above may be removed by, and shall
not be removed except by, a vote of the holders of the Series B Preferred,
voting as a single class, at a meeting of the stockholders, or the holders of
the Series B Preferred called for that purpose. If prior to the end of such
term of any Director elected as aforesaid, a vacancy in the office of such
Director shall occur during the continuance of a default in dividends on the
shares of Series B Preferred by reason other than removal, such vacancy shall
be filled for the unexpired term by the appointment by the remaining Director
elected as aforesaid of a new Director for the unexpired term of such former
Director.
4E. Without the affirmative vote of the holders of at least two-thirds of
the outstanding shares of Series B Preferred, voting separately as a class, the
Corporation shall not:
(i) directly or indirectly alter or change the provisions of the
Certificate of Incorporation (including through any Certificate of Amendment or
Certificate of Designation relating to, or Certificate of Merger or
Consolidation which alters or changes or converts pursuant to a merger or
consolidation, the Series B Preferred Stock) so as to materially adversely
affect (within the meaning of Section 242(b)(2) of the General Corporation Law
of the State of Delaware the powers (including voting powers to which each such
share is entitled relative to the shares of Common Stock or other capital stock
outstanding immediately prior to such alteration, change or conversion except
as such voting powers may be affected by the authorization of any new series of
Parity Preferred Stock having the same voting rights (other than the right to
vote as part of the same class as the Series B Preferred under the rights
granted to
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the Series B Preferred under this Section 4) as Series B Preferred or
by the authorization of any other shares of any class which are not entitled to
vote together with Series B Preferred in any class vote), preferences or
special rights of Series B Preferred; or
(ii) authorize or create any Senior Preferred Stock or any other class of
stock senior to the Series B Preferred as to dividends or upon liquidation.
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Section 5. Optional Conversion.
5A. At any time and from time to time after the initial issuance of Series
B Preferred, any holder of Series B Preferred may convert all or any of the
shares of Series B Preferred held by such holder into a number of fully paid
and nonassessable shares of Common Stock computed by multiplying the number of
shares to be converted by the Stated Value Per Share of the Series B Preferred
plus the amount of any dividends accrued and unpaid thereon through the date of
conversion and dividing the result by the Conversion Price. The Conversion
Price shall initially be $21.375.
5B. The Conversion Price shall be adjusted from time to time as follows:
(i) If the Corporation makes a distribution of shares of Common
Stock as a dividend or distribution on the 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.
(ii) If the outstanding shares of Common Stock are subdivided into a
greater number of shares, the Conversion Price in effect at the opening of
business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced, and conversely, if outstanding
shares of Common Stock are each combined into a smaller number of shares, 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.
(iii) If the Corporation distributes to all or substantially all
holders of Common Stock warrants, options or other rights to subscribe for or
purchase Common Stock (or securities convertible or exerciseable or
exchangeable into Common Stock) entitling them to subscribe for or purchase
Common Stock at a price per share less than the Current Market Price per share
(determined as provided below) 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
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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.
(iv) If the Corporation, by dividend or otherwise, distributes to all
or substantially all holders of Common Stock, shares of capital stock of the
Corporation, evidences of indebtedness, or other non-cash assets (including
securities of any corporation other than the Corporation, but excluding any
rights or warrants referred to in paragraph 5B(iii) above, any dividend or
distribution paid in cash out of the earned surplus of the Corporation and any
dividend or distribution referred to in paragraph 5B(i) above), the Conversion
Price shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on the date fixed for the determination of stockholders entitled to
receive such distribution by a fraction of which the numerator shall be the
Current Market Price per share (determined as provided below) of the Common
Stock on the date fixed for such determination less the then fair market value
(as determined by the Board, whose determination shall be conclusive) of the
portion of the assets (including capital stock) or evidences of indebtedness so
distributed allocable to one share of Common Stock and the denominator shall be
such Current Market Price per share of the Common Stock, such adjustment to
become effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such distribution.
5C. For the purpose of any computation under paragraph 5B(iii) and
paragraph 5B(iv), the "Current Market Price" per share of Common Stock on any
day shall be deemed to be the average of the daily Closing Prices for the 15
consecutive Business Days selected by the Board commencing not less than 20 nor
more than 30 Business Days before the day of question. The term "Closing
Price" on any day shall mean the reported last sale price 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 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 National Association of Securities Dealers
Automated Quotations National Market System or, if the Common Stock is not
listed or admitted to trading on any national securities exchange or quoted on
such National Market System, the average of the closing bid and asked prices in
the over-the-counter market as furnished by any New York Stock Exchange member
firm selected from time to time by the Board for that purpose; and the term
"Business Day" shall mean each Monday, Tuesday, Wednesday,
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Thursday, and Friday which is not a day on which banking institutions
in the City of New York are authorized or obligated by law or executive order
to close.
5D. Issuances of warrants, options and securities convertible into Common
Stock are deemed to be issuances of the underlying Common Stock for purposes of
adjustments to the Conversion Price. Whenever the Conversion Price is
adjusted, the Corporation will promptly mail to holders of Series B Preferred a
notice of adjustment briefly stating the facts requiring the adjustment and the
manner of computing it. Notwithstanding the foregoing provisions of Section 5B
above, no adjustment of the Conversion Price will be required to be made in any
case until cumulative adjustments amount to a change in the Conversion Price of
1% or more, but any such adjustment that would otherwise be required to be made
shall be carried forward and taken into account in the next subsequent
adjustment. All calculations will be made either to the nearest cent or the
nearest 1/100 of a share.
5E. If the Corporation reclassifies or changes its outstanding Common
Stock, or consolidates with or merges into or sells or conveys all or
substantially all of the assets of the Corporation as an entirety to any
person, or is a party to a merger or share exchange that reclassifies or
changes its outstanding Common Stock, shares of Series B Preferred will become
convertible into the kind and amount of shares of stock and other securities
and property (including cash) that the holders of shares of Series B Preferred
would have owned immediately after the reclassification, change or transaction
if the holders had converted such shares of Series B Preferred into Common
Stock immediately before the effective date of the reclassification, change or
transaction. If in connection with any such reclassification, consolidation,
merger, sale, transfer, or share exchange each holder of shares of Common Stock
is entitled to elect to receive either securities, cash or other assets upon
completion of such transaction, the Corporation will provide or cause to be
provided to each holder of Series B Preferred (on an as converted basis) the
right to elect to receive the securities, cash or other assets into which the
Series B Preferred held by such holder will be convertible after completion of
any such transaction on the same terms and subject to the same conditions
applicable to holders of the Common Stock (including, without limitation,
notice of the right to elect, limitations on the period in which such election
will be made and the effect of failing to exercise the election). The above
will similarly apply to successive reclassifications, consolidations, mergers,
sales, transfer or share exchanges.
5F. The Series B Preferred shall be subject to the following conversion
procedures:
(i) Any holder of shares of Series B Preferred desiring to convert any
portion thereof into Common Stock shall surrender each certificate representing
one or more shares of such Series B Preferred to be converted, duly endorsed in
favor of the Corporation or in blank and accompanied by proper instruments of
transfer, at the principal business office of the
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Corporation (or such other place as may be designated by the Corporation),
and shall give written notice to the Corporation at that office of its
election to convert the same, setting forth therein the name or names
(with the address or addresses) in which the shares of Common Stock are to be
issued. A conversion shall be deemed to have been made immediately prior to
the close of business on the date of such surrender of the shares of Series B
Preferred to be converted, and the person or persons entitled to receive the
shares of Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock as of
such date.
(ii) In the event any Series B Preferred is called for redemption or
exchange, the conversion rights pertaining thereto will terminate at the close
of business on the business day immediately prior to the redemption or exchange
date unless the Corporation defaults in the payment of the redemption price or
in the issuance of the security in exchange.
(iii) As soon as possible after a conversion has been effected (but in
any event within three Business Days in the case of subparagraph (a) below),
the Corporation shall deliver to the converting holder:
(a) a certificate or certificates representing the
number of shares of Common Stock issuable by reason of such
conversion in such name or names and such denomination or
denominations as the converting holder has specified;
(b) payment of the amount payable under subparagraph
(vi) below with respect to such conversion; and
(c) a certificate representing any shares of Series B
Preferred which were represented by the certificate or
certificates delivered to the Corporation in connection with
such conversion but which were not converted.
(iv) The issuance of certificates for shares of Common Stock upon
conversion of Series B Preferred shall be made without charge to the holders of
such Series B Preferred for any issuance tax in respect thereof or other cost
incurred by the Corporation in connection with such conversion and the related
issuance of shares of Common Stock.
(v) The Corporation shall not close its books against the transfer of
Series B Preferred or of Common Stock issued or issuable upon conversion of
Series B Preferred in any manner which interferes with the timely conversion of
Series B Preferred. The Corporation shall assist and cooperate (but the
Corporation shall not be required to expend substantial efforts or funds) with
any holder of Series B Preferred required to make any governmental filings or
obtain any governmental approval prior to or in connection with any conversion
of shares of Series B
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Preferred hereunder (including, without limitation, making any filings
required to be made by the Corporation).
(vi) If any fractional interest in a share of Common Stock would,
except for the provisions of this subparagraph, be deliverable upon any
conversion of shares of a holder's Series B Preferred, the Corporation, in lieu
of delivering the fractional share therefor, shall pay an amount to the holder
thereof equal to an amount bearing the same ratio to the fair market value of a
whole share of Common Stock of the Corporation, as determined in good faith by
the Corporation's Board ("Fair Market Value"), as the fractional interest to
which the stockholder would otherwise be entitled bears to a whole share of
Common Stock.
(vii) The Corporation shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock, solely for the purpose
of issuance upon the conversion of the Series B Preferred, not less than the
number of shares of Common Stock issuable upon the conversion of all
outstanding Series B Preferred that may then be exercised. All shares of
Common Stock which are so issuable shall, when issued, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and
charges. The Corporation shall take all such actions as may be necessary to
ensure that all such shares of Common Stock may be so issued without violation
of any applicable law or governmental regulation or any requirements of any
domestic securities exchange upon which shares of Common Stock may be listed
(except for official notice of issuance which shall be immediately delivered by
the Corporation upon each such issuance).
Section 6. Optional Redemption Through Debenture Exchange.
6A. Subject to paragraph 6E of this Section, shares of Series B Preferred
shall be redeemable at the option of the Corporation, at any time, in whole but
not in part, through the issuance of the Corporation's 6% Convertible
Subordinated Debentures due April 15, 2007 (hereinafter referred to as the
"Debentures") in redemption of and exchange for the shares of Series B
Preferred, in the manner provided in this Section 6.
6B. Holders of Series B Preferred will be entitled to receive $50
principal amount of the Debentures for each share of Series B Preferred held by
them on the Exchange Date (as hereinafter defined).
6C. The Corporation shall mail notice of its intention to redeem through
such an exchange to each holder of record of the shares of Series B Preferred
no less than 30 nor more than 60 days prior to the redemption date. Such
notice shall be given by first class mail, postage prepaid to the holders of
record of shares of Series B Preferred at their respective addresses as the
same shall appear on the books of the Corporation, specifying the effective
date of the exchange (the "Exchange Date") and the place where certificates for
shares of Series B Preferred are to be surrendered for Debentures and stating
that dividends on shares of Series B Preferred will cease
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to accrue on the Exchange Date and that interest on the Debentures will
accrue from the Exchange Date, but neither failure to mail such notice, nor any
defect therein or in the mailing thereof, to any particular holder shall affect
the sufficiency of the notice or the validity of the proceedings for redemption
and exchange with respect to the other holders. Any notice which was mailed in
the manner herein provided shall be conclusively presumed to have been duly
given whether or not the holder received the notice.
6D. If notice of redemption and exchange has been given pursuant to this
Section 6, then on or after the Exchange Date (unless the Corporation shall
default in issuing Debentures in redemption of and in exchange for shares of
Series B Preferred) and notwithstanding that any certificates for shares of
this series have not been surrendered for exchange, the rights of the holders
of the Series B Preferred as stockholders of the Corporation shall cease
(except the right to receive Debentures in exchange therefor and such accrued
and unpaid dividends to the date of redemption, whether or not earned or
declared), and the person or persons entitled to receive the Debentures
issuable upon such redemption and exchange shall be treated for all purposes as
the registered holder or holders of such Debentures. Upon the surrender (and
endorsement, if required by the Corporation) in accordance with such notice of
the certificates for shares of Series B Preferred, such certificates shall be
exchanged for Debentures and such accrued dividends in accordance with this
Section 6. Notwithstanding the foregoing, if notice of redemption and exchange
has been given pursuant to this Section 6 and any holder of shares of Series B
Preferred shall, prior to the close of business on the Business Day preceding
the Exchange Date, give written notice to the Corporation pursuant to Section 5
hereof of the conversion of any or all of the shares of Series B Preferred to
be redeemed and exchanged held by such holder (accompanied by a certificate or
certificates for such shares, duly endorsed or assigned to the Corporation, and
any necessary transfer tax payment, as required by Section 5 hereof), then such
redemption and exchange shall not become effective as to such shares to be
converted and such conversion shall become effective as provided in Section 5
hereof.
6E. If on the Exchange Date, the Corporation has failed to pay all
dividends accrued and unpaid on the shares of Series B Preferred to the
Exchange Date, then no shares of Series B Preferred shall be redeemed and
exchanged for Debentures.
6F. In connection with the issuance of the Debentures, the Corporation
will use all reasonable efforts to list the Debentures for trading on the New
York Stock Exchange or, if they cannot be so listed, the Corporation will use
reasonable efforts to list the Debentures on another principal national
securities exchange or include them on a national quotations system.
Section 7. Optional Redemption.
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7A. Subject to paragraph 7D of this Section 7, the Series B Preferred
shall be subject to redemption on a pro-rata basis (based on the number
of shares), at the option of the Corporation, in whole or from time to
time in part, in each case as set forth below, (i) if at any time on and after
the Closing Date and prior to the second anniversary of the Closing Date, the
average Closing Price of the Common Stock for 10 consecutive trading days
during such period equals or exceeds one hundred forty percent (140%) of the
Conversion Price then in effect, then for a period of 60 days following the
last day of such 10 day period, at a per share redemption price in cash equal
to the Stated Value Per Share plus any dividends accrued and unpaid thereon to
the date of redemption, and (ii) at any time on or after the second anniversary
of the Closing Date, at a per share redemption price in cash equal to the
Stated Value Per Share plus any dividends accrued and unpaid thereon to the
date of redemption.
7B. The Corporation shall give each holder of Series B Preferred written
notice of each redemption of Series B Preferred held by such holder not less
than 30 days nor more than 45 days prior to any redemption date, specifying
such redemption date and the number of shares to be redeemed on such date.
Notice of redemption having been so given, the number of shares to be redeemed
on the redemption date as specified in such notice shall be so redeemed on the
specified redemption date, except to the extent that any share of Series B
Preferred which is to be so redeemed shall have been surrendered to the
Corporation for conversion prior to such redemption date.
7C. Notwithstanding the foregoing, if notice of redemption has been given
pursuant to this Section 7 and any holder of shares of Series B Preferred
shall, prior to the close of business on the Business Day preceding the date of
redemption, give written notice to the Corporation pursuant to Section 5 hereof
of the conversion of any or all of the shares to be redeemed held by such
holder (accompanied by a certificate or certificates for such shares, duly
endorsed or assigned to the Corporation, and any necessary transfer tax
payment, as required by Section 5 hereof) then such redemption shall not become
effective as to such shares to be converted and such conversion shall become
effective as provided in Section 5 hereof and any funds which have been
deposited by the Corporation, or on its behalf, with a paying agent or for the
redemption and exchange of such shares shall (subject to any right of the
holder of such shares to receive the dividend payable thereon) immediately upon
such conversion be returned to the Corporation.
7D. If on the date of redemption, the Corporation has failed to pay all
dividends accrued and unpaid on the shares of Series B Preferred to be redeemed
to the date of redemption then no shares of Series B Preferred shall be
redeemed.
Section 8. Debentures.
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8A. The Debentures will be unsecured, subordinated obligations of the
Corporation, will be limited in aggregate principal amount to $17,600,000 and
will mature on April 15, 2007. The Debentures will bear interest at the same
annual rate as the dividends payable on the Series B Preferred, from the date
of issuance, or from the most recent interest payment date to which interest
has been paid or provided for, payable semiannually in arrears on March 15 and
September 15 of each year, commencing with the first of such dates to occur
after the Exchange Date, to the person in whose name the Debenture is
registered at the close of business on the preceding March 1 and September 1,
as the case may be. Interest will be payable to the holders of record as they
appear on the register of the Corporation on such record dates, provided that
holders of Debentures called for redemption on a redemption date falling
between an interest payment record date and the interest payment date shall, in
lieu of receiving such interest on the interest payment date fixed therefor,
receive such interest payment together with all other accrued and unpaid
interest on the date fixed for redemption (unless such holders convert such
Debentures to Common Stock in which case such holders will receive such payment
on the corresponding dividend payment date). Interest will be computed on the
basis of a 360-day year of twelve 30-day months. The Debentures will not be
subject to any sinking fund. Principal of and premium, if any, and interest
on, with respect to, the Debentures will be payable by check mailed to the
address of the person entitled thereto. The Debentures will be issued only in
fully registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000.
8B. The Debentures shall be issued under an indenture, which shall be
substantially in the form on file with the Secretary of the Corporation on the
Closing Date ("Indenture") with a bank or trust company having assets in excess
of $100 million and otherwise qualified to serve as a trustee under the Trust
Indenture Act of 1939, and shall contain customary terms and conditions and
comply in all respects with the Trust Indenture Act of 1939.
8C. The payment of principal of and premium, if any, and interest on, or
with respect to, the Debentures will, to the extent set forth in the Indenture,
be subordinated to the payment of certain senior indebtedness of the Company.
The Indenture will not prohibit or limit the incurrence of any additional
indebtedness.
8D. The Debentures may be converted in denominations of $1,000 or integral
multiples thereof (plus interest accrued to the date of conversion) at any time
prior to maturity at the option of the holder into fully paid, nonassessable
shares of Common Stock at a conversion price equal to the Conversion Price.
The right to convert Debentures called for redemption will expire at the close
of business on the fifth Business Day prior to the redemption date (the
"Conversion Termination Date") (unless the Corporation shall default in making
the redemption payment when due, in which case the conversion right shall
terminate at the close of business on the date such default is cured and such
Debenture is redeemed).
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8E. No fractional shares of Common Stock shall be issued upon conversion
of the Debentures but, in lieu thereof, an appropriate amount will be paid in
cash based on the Closing Price (as defined in the Indenture) on the last
trading day before the conversion date.
Section 9. Registration of Transfer.
The Corporation shall keep at its principal office a register for the
registration of issuances and transfers of Series B Preferred. Upon the
surrender of any certificate representing Series B Preferred at such place, the
Corporation shall, at the request of the record holder of such certificate,
execute and deliver (at the Corporation's expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number of
shares of Series B Preferred represented by the surrendered certificate. Each
such new certificate shall be registered in such name and shall represent such
number of shares of Series B Preferred as is requested by the holder of the
surrendered certificate and shall be substantially identical in form to the
surrendered certificate, and dividends shall accrue on the Series B Preferred
represented by such new certificate from the date to which dividends have been
fully paid on such Series B Preferred represented by the surrendered
certificate.
Section 10. Replacement.
Upon receipt of evidence reasonably satisfactory to the Corporation (an
affidavit of the registered holder shall be satisfactory) of the ownership and
the loss, theft, destruction or mutilation of any certificate evidencing shares
of Series B Preferred, and in the case of any such loss, theft or destruction,
upon receipt of indemnity reasonably satisfactory to the Corporation (provided
that if the holder is a financial institution or other institutional investor,
its own agreement shall be satisfactory), or, in the case of any such
mutilation upon surrender of such certificate, the Corporation shall (at its
expense) execute and deliver in lieu of such certificate a new certificate of
like kind representing the number of shares of Series B Preferred represented
by such lost, stolen, destroyed or mutilated certificate and dated the date of
such lost, stolen, destroyed or mutilated certificate, and dividends shall
accrue on the Series B Preferred represented by such new certificate from the
date to which dividends have been fully paid on the shares of Series B
Preferred represented by such lost, stolen, destroyed or mutilated certificate.
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Section 11. Notices.
Except as otherwise expressly provided hereunder, all notices referred to
herein shall be in writing and shall be delivered by registered or certified
mail, return receipt requested and postage prepaid, or by reputable overnight
courier service, charges prepaid, and shall be deemed to have been given when
so mailed or sent (i) to the Corporation, at its principal executive offices
and (ii) to any stockholder, at such holder's address as it appears in the
stock records of the Corporation (unless otherwise indicated by any such
holder).
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, I have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury this 15th day of
April, 1997.
____________________________
Donald J. Ehrlich
President and Chief Executive Officer
ATTEST:
______________________________
Connie L. Koleszar
Assistant Secretary
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EXHIBIT 4.03
INDENTURE
INDENTURE, dated as of ______________, between Wabash National
Corporation, a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company," as more fully defined in
Section 1.1), having its principal office at 1000 Sagamore Parkway, Lafayette,
Indiana 47904, and ________________________, a ____________________________
having its principal corporate trust office at _____________________, as
Trustee (herein called the "Trustee," as more fully defined in Section 1.1).
RECITALS OF THE COMPANY:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 6% Convertible Subordinated Debentures due 2007
(hereinafter sometimes called the "Debentures"), in an aggregate principal
amount not to exceed $17,600,000 and, to provide the terms and conditions upon
which the Debentures are to be authenticated, issued and delivered, the Company
has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to be borne by
the Debentures, and the form of assignment, and the form of conversion notice
to be borne by the Debentures are to be substantially in the forms hereinafter
provided for; and
WHEREAS, all acts and things necessary to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee or a
duly authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents
a valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Debentures have in
all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Debentures by the Holders thereof, it is hereby covenanted and agreed, for the
equal and proportionate benefit of the respective Holders from time to time of
the Debentures (except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 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;
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(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States of America, and, except as
otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are
generally accepted in the United States of America at the date of such
computation;
(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;
(e) headings are for convenience of reference only and do not affect
interpretation; and
"Act," when used with respect to any Holder of a Debenture, has the
meaning specified in Section 9.1.
"Actual Knowledge" means, with respect to the Trustee's knowledge of an
occurrence, receipt by a Responsible Officer of the Trustee of written notice
of such occurrence from the Company or a Holder.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 8.13 to act on behalf of the Trustee to authenticate Debentures.
"Authorized Newspaper" means a newspaper, in the English language or in an
official language of the country of publication, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and
of general circulation in the place in connection with which the term is used,
or in the financial community of such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may
be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Debenture" means a Debenture evidencing all or part of the
Debentures, issued to the Depositary or its nominee, and registered in the name
of such Depositary or nominee.
"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 are
authorized or obligated by law or executive order to close or be closed.
"Closing Price" of any common stock on any day shall mean the last
reported sale price regular way on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices
regular way of such common stock, in each case on the NYSE Composite Tape or,
if the common stock is not listed or admitted to trading on such exchange, on
the principal national securities exchange on which such common stock is listed
or admitted to trading, or, if not listed or
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admitted to trading on any national securities exchange, on the National
Association of Securities Dealers Automated Quotations National Market System
or, if the common stock is not listed or admitted to trading on any national
securities exchange or quoted on such National Market System, the average of
the closing bid and asked prices as furnished by any New York Stock Exchange
member firm selected from time to time by the Board of Directors of the Company
for that purpose.
"Commission" means the United States Securities and Exchange Commission.
"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. Subject to the
anti-dilution provisions of any Debenture, however, shares of Common Stock
issuable on conversion of a Debenture shall include only shares of the class
designated as Common Stock of the Company at the date hereof or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of the payment of dividends or
the distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not subject to
redemption by the Company, provided, however, 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 such classes resulting from all such
reclassifications.
"Company" means the Person named as the "Company" in the first paragraph
of this Indenture 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 the Chairman of the Board of Directors or
the President or any Vice Chairman or any Vice President and by the Treasurer
or the Secretary or any Assistant Treasurer or any Assistant Secretary of the
Company and delivered to the Trustee.
"Controlled Entity" means (a) any Subsidiary of the Company of which (i)
the Company and the other Subsidiaries of the Company collectively own less
than 100% of the Voting Stock and (ii) the Company and its other Subsidiaries,
pursuant to a contract or otherwise, have the right to direct the day-to-day
operations and (b) a corporation at least 50%, but less than 100%, of the
outstanding Voting Stock of which is owned directly by the Company and its
Subsidiaries, or any other Person (other than a corporation) in which the
Company and its Subsidiaries own at least 50%, but less than 100%, of the
equity interests therein (provided the Company and its Subsidiaries, pursuant
to a contract or otherwise, have the right to direct the day-to-day operations
of such corporation or other Person).
"Conversion Price" has the meaning specified in Section 15.1.
"Convertible Preferred Securities" means the Series B 6% Cumulative
Convertible Exchangeable Preferred Stock of the Company.
"Corporate Trust Office" means the principal office of the Trustee 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.
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"Current Market Price" means for each share of Common Stock for any
reference day, the average of the daily Current Market Price for the 15
consecutive Trading Days selected by the Company's Board of Directors
commencing not less than 20 nor more than 30 Business Days before such
reference day.
"Debenture Register" and "Debenture Registrar" have the respective
meanings specified in Section 2.5.
"Debenture" has the meaning stated in the first recital of this Indenture
and more particularly means any Debenture authenticated and delivered under
this Indenture.
"Default" means any event or condition that is, or after notice or passage
of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 2.3(c) [307].
"Depositary" means The Depositary Trust Company until a successor
Depositary shall have been appointed pursuant to procedures adopted under
Section 2.5, and thereafter the term "Depositary" shall mean or include each
Person who is then a Depositary hereunder.
"Disqualified Stock" means any capital stock of the Corporation which, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or
prior to April 15, 2007.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"Exchange Date" means with respect to any Debenture the date of issuance
of such Debentures in exchange for shares of the Company's Convertible
Preferred Securities, as more particularly described in the Company's
Certificate of Designation of Series B 6% Cumulative Convertible Exchangeable
Preferred Stock of Wabash National Corporation as filed with the Secretary of
State of the State of Delaware.
"Event of Default" has the meaning specified in Section 7.1.
"Holder," when used with respect to any Debenture, means the Person in
whose name the Debenture is registered in the Debenture 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 and shall
include the terms of the Debentures.
"Interest Payment Date" has the meaning set forth in the form of
Debenture.
"Junior Securities" has the meaning set forth in Section 4.15 hereof.
"Maturity," when used with respect to any Debenture, means the date on
which the principal of such Debenture becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
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"Maturity Date" means the date on which the Debentures mature and on which
the principal shall be due and payable together with all accrued and unpaid
interest thereon.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board of Directors or the President or any Vice Chairman or any Vice President
and by the Treasurer or the Secretary or any Assistant Treasurer or any
Assistant Secretary of the Company and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company, and who shall be acceptable to the
Trustee.
"Outstanding," when used with respect to the Debentures, means, as of the
date of determination, all Debentures theretofore authenticated and delivered
under this Indenture, except:
(i) Debentures theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Debentures for whose payment or redemption money in the
necessary amount has been theretofore deposited in accordance with
Article XIII 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
Debentures; provided, however, that, if Debentures or portions of
Debentures are to be redeemed prior to the Maturity thereof, notice of
such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;
(iii) Debentures which have been paid pursuant to Section ___ or in
exchange for in lieu of which other Debentures have been authenticated
and delivered pursuant to this Indenture, other than any Debentures in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Debentures are held by a bona fide purchaser
in whose hands such Debentures are valid obligations of the Company; and
(iv) Debentures converted into Common Stock pursuant to Article XV;
provided, however, that in determining whether the Holders of the requisite
aggregate principal amount of the Outstanding Debentures have given any
request, demand, authorization, direction, notice, consent or waiver hereunder
or whether a quorum is present at a meeting of Holders of Debentures,
Debentures owned by the Company or any other obligor upon such Debentures, 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, or upon any such determination as to the
presence of a quorum, only Debentures as to which the Trustee has Actual
Knowledge to be so owned shall be so disregarded. Debentures 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 Debentures and that the pledgee is not the Company or any
other obligor upon such Debentures 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 any premium and interest on any Debentures on behalf of the
Company.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, trust, association, joint stock company,
limited liability company, unincorporated association or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
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"Place of Payment," when used with respect to the Debentures, means the
place or places where, subject to the provisions of Section 5.2, the principal
of and any premium and interest on the Debentures are payable as specified in
or contemplated by the Debentures.
"Predecessor Debenture" of a Debenture means every previous Debenture
evidencing all or a portion of the same debt as that evidenced by such
Debenture; and, for the purposes of this definition, a Debenture authenticated
and delivered under Section 2.6 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Debenture shall be deemed to evidence the same debt
as the mutilated, destroyed, lost or stolen Debenture.
"Redemption Date," when used with respect to any Debenture to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Debenture to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registerable Securities" has the meaning set forth in Section 5.7.
"Regular Record Date" for the interest payable on March 15 means March 1,
for the interest payable on September 15 means September 1 and for the interest
payable on any other Interest Payment Date any Interest Payment Date means the
date 15 days prior to such Interest Payment Date, in each case, whether or not
such day is a Business Day.
"Responsible Officer" means, when used with respect to the Trustee, the
chairman of the board of directors, the executive committee of the board of
directors, the chairman of the trust committee, the president, any vice
president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer, the controller or any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"Restricted Securities Legend" means the legend restricting transfer of
the Debentures in the form set forth in Section 2.2.
"Senior Indebtedness" means, with respect to the Company, the principal
of, premium, if any, interest on, and any other payment due pursuant to, any of
the following, whether outstanding on the date of this Indenture or thereafter
incurred or created: (a) any and all other indebtedness and obligations of the
Company (including indebtedness of others guaranteed by the Company) other than
the Debentures, whether or not contingent and whether outstanding on the date
of the Indenture or thereafter created, incurred or assumed, which (i) is for
money borrowed; (ii) is evidenced by any bond, note, debenture or similar
instrument; (iii) represents the unpaid balance on the purchase price of any
property, business, or asset of any kind; (iv) is an obligation of the Company
as lessee under any and all leases of property, equipment or other assets
required to be capitalized on the balance sheet of the lessee under generally
accepted accounting principles; (v) is a reimbursement obligation of the
Company with respect to letters of credit; (vi) is an obligation of the Company
with respect to interest swap obligations and foreign exchange agreements or
(vii) is an obligation of others secured by a lien to which any of the
properties or assets (including, without limitation, leasehold interests and
any other tangible or intangible property rights) of the Company are subject,
whether or not the obligations secured thereby shall have been assumed by the
Company or shall otherwise be the Company's legal liability, and (b) any
deferrals,
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amendments, renewals, extensions, modifications and refundings of
any indebtedness or obligations of the types referred to above; provided that
Senior Indebtedness shall not include (i) the Debentures; (ii) any indebtedness
or obligation of the Company which, by its terms or the terms of the instrument
creating or evidencing it, is both subordinated to any other indebtedness or
obligations of the Company and is not superior in right of payment to the
Debentures; (iii) any indebtedness or obligation of the Company to any of its
Subsidiaries; and (iv) any indebtedness or obligation which is both incurred by
the Company in connection with the purchase of assets, materials or services in
the ordinary course of business and constitutes an unsecured trade payable.
"Special Record Date" for the payment of Defaulted Interest means a date
fixed by the Trustee pursuant to Section 2.3(c).
"Stated Maturity," when used with respect to any Debenture or any
installment of interest thereon, means the date specified in such Debenture as
the fixed date on which the principal of such Debenture or such installment of
interest is due and payable.
"Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture, business trust or similar entity, at least a
majority of whose outstanding partnership or similar interests shall at the
time be owned by such Person or by one or more of its Subsidiaries or by such
Person and one or more of its Subsidiaries and (iii) any limited partnership of
which such Person or any of its Subsidiaries is a general partner.
"Total Consolidated Net Worth" means, with respect to any Person, the
aggregate of capital, surplus and retained earnings of such Person and its
consolidated subsidiaries, as would be shown on the consolidated balance sheet
of such Person prepared in accordance with generally accepted accounting
principles adjusted to exclude ( to the extent included in calculating such
equity), (a) the amount of capital, surplus and accrued but unpaid dividends
attributable to any Disqualified Stock or treasury stock of such Person or any
of its consolidated subsidiaries, (b) all upward revaluations and other
write-ups in the book value of any asset of such Person or a consolidated
subsidiary of such Person subsequent to the date of issue of the Convertible
Preferred Securities, (c) all investments in subsidiaries that are not
consolidated subsidiaries and in persons that are not subsidiaries and (d)
minority interests in all Controlled Entities.
"Trading Day" shall mean a day on which any securities are traded on the
national securities exchange or quotation system used to determine the Closing
Price.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this Indenture until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean or include each Person who is then a Trustee hereunder, and if at any time
there is more than one such Person, "Trustee" shall mean all such Persons.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed, provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent of any such amendment, the Trust Indenture
Act of 1939 as so amended.
"Voting Stock," as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for
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the election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT.
The Debentures shall be designated as " 6% Convertible Subordinated
Debentures due 2007". The aggregate principal amount of Debentures that may be
authenticated and delivered pursuant to this Indenture is limited to
$17,600,000 (except for Debentures authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Debentures pursuant to Sections 2.5, 2.6, 2.7, 3.6, and 15.2). Upon the
execution of this Indenture, or from time to time thereafter, such Debentures
may be executed by the Company and delivered to the Trustee for authentication,
and the Trustee shall thereupon authenticate and deliver such Debentures upon
the written order of the Company, signed by (a) its President, any Executive or
Senior Vice President or any Vice President and (b) its Treasurer or any
Assistant Treasurer or its Secretary or any Assistant Secretary, without any
further action by the Company hereunder.
SECTION 2.2 FORM OF DEBENTURES; INITIAL ISSUANCE TO PROPERTY TRUSTEE.
The Debentures and the Trustee's Certificate of Authentication to be borne
by the Debentures shall be in substantially the form set forth in Exhibit A,
which is incorporated in and made a part of this Indenture.
Any of the Debentures may have such letters, numbers or other marks of
identification (including different CUSIP numbers) and such notations, legends
and endorsements as the officer of the Company executing the same may approve
(execution thereof by such officer to be conclusive evidence of such approval)
and as are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange or automated
quotation system on which the Debentures may be listed or designated for
issuance or with the procedures of the Depositary, or to conform to usage. The
Company shall furnish any such legend not contained in Exhibit A to the Trustee
in writing.
The terms and provisions contained in the form of Debentures attached as
Exhibit A hereto shall constitute, and are hereby expressly made a part of,
this Indenture and to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
The definitive Debentures shall be typewritten or 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 Debentures may be listed, all as determined by
the officers executing such Debentures, as evidenced by their execution of
such Debentures.
Any Debentures issued prior to the Resale Restriction Termination Date (as
defined below) shall be in the form of one or more individual certificates in
definitive, fully registered form without coupons
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and shall bear the following legend (the "Restricted Securities Legend") unless
the Company determines otherwise in accordance with applicable law:
THIS SECURITY AND ANY COMMON STOCK ISSUED ON CONVERSION HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER
OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES, AND
AGREES FOR THE BENEFIT OF WABASH NATIONAL CORPORATION (THE "COMPANY") THAT: (I)
IT HAS ACQUIRED A "RESTRICTED SECURITY" THAT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF
THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE") EXCEPT (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY APPLICABLE JURISDICTION; AND
(III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THIS SECURITY OF THE RESALE RESTRICTIONS SET FORTH IN (II) ABOVE.
ANY OFFER, SALE OR OTHER DISPOSITION PURSUANT TO THE FOREGOING CLAUSE (D), (E)
OR (F) IS SUBJECT TO THE RIGHT OF THE ISSUER OF THIS SECURITY AND THE TRUSTEES
FOR SUCH ISSUER (i) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN FORM AND
SUBSTANCE, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
SECTION 2.3 DENOMINATION OF DEBENTURES; PAYMENT OF INTEREST.
(a) Except as provided below, the Debentures shall be issued in fully
registered certificated form without coupons, in denominations of $1,000 in
principal amount and integral multiples thereof.
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Principal and interest on the Debentures issued in certificated form will be
payable, the transfer of such Debentures will be registrable, and such
Debentures will be exchangeable for Debentures bearing identical terms and
provisions at the office or agency of the Trustee; provided, however, that
payment of interest shall be made by the Company by check mailed to the Holder
at such address as shall appear in the Debenture Register.
(b) Subject to Section 5.7, each Debenture will bear interest at the rate
of 6% per annum (the "Coupon Rate") from the Exchange Date or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, as the case may be, payable semi-annually, in arrears, on March 15 and
September 15, commencing on the first such date following the Exchange Date
(each on "Interest Payment Date") until the principal thereof is paid or made
available for payment, to the Person in whose name such Debenture or any
predecessor Debenture is registered, at the close of business on the Regular
Record Date for such interest installment.
(c) Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Debentures are registered at the close
of business on a Special Record Date (as defined herein) 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 Debenture 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 provided in
this clause. Thereupon, the Trustee shall fix a Special Record Date (the
"Special Record Date") for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee 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 Debenture 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 therefore having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Debentures are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (ii).
(ii) 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 Debentures may be listed, and, if so
listed, 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.
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(d) Subject to the foregoing provisions of this Section 2.3, each
Debenture delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Debenture shall carry the rights to
interest accrued and unpaid, which were carried by such other Debenture.
(e) The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. In the event that any date on
which interest is payable on the Debentures is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
SECTION 2.4 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Debentures shall be signed on behalf of the Company by both (a) its
Chairman of the Board of Directors or any Vice Chairman of the Board of
Directors or its President or one of its Vice Presidents and (b) its Treasurer
or one of its Assistant Treasurers or its Secretary or one of its Assistant
Secretaries, under its corporate seal reproduced thereon which may, but need
not, be attested. The signature of any of these officers on Debentures may be
manual or facsimile.
Debentures 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 Debentures or did not
hold such offices at the date of such Debentures. At any time and from time to
time after the execution and delivery of this Indenture, the Company may
deliver Debentures executed by the Company to the Trustee for authentication,
together with a Company Order for the authentication and delivery of
Debentures, and the Trustee in accordance with the Company Order shall
authenticate and make Debentures available for delivery.
Each Debenture shall be dated the date of its authentication.
No Debenture shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on the Debenture a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Debenture shall be conclusive evidence, and the only evidence, that such
Debenture has been duly authenticated and delivered hereunder.
Notwithstanding the foregoing, if any Debenture shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Debenture to the Trustee for cancellation as
provided in Section 2.9 together with a written statement stating that such
Debenture has never been issued and sold by the Company, for all purposes of
this Indenture such Debenture shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this
Indenture.
SECTION 2.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at an office or agency to be maintained
by the Company in accordance with Section 5.2 a register (the "Debenture
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of transfers of
Debentures.
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The Trustee is hereby appointed "Debenture Registrar" for the
purpose of registering transfers of Debentures as herein provided.
Upon surrender for registration of transfer of any Debenture at the office
or agency of the Company maintained pursuant to Section 5.2 for such purpose,
the Company shall execute, and the Trustee shall authenticate and make
available for delivery, in the name of the designated transferee or
transferees, one or more new Debentures of any authorized denominations and of
a like aggregate principal amount and tenor.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations and of a like aggregate principal
amount and tenor, upon surrender of the Debentures to be exchanged at any such
office or agency. Whenever any Debentures are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and make available
for delivery, the Debentures which the Holder making the exchange is entitled
to receive.
Whenever any Debentures are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and make available for delivery,
the Debentures which the Holder making the exchange is entitled to receive.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
Every Debenture presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee or any
transfer agent) be duly endorsed, or be accompanied by a written instrument of
transfer in the form satisfactory to the Company and the Debenture Registrar or
any transfer agent 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 Debentures, 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 Debentures, other than
exchanges pursuant to Section 2.7, 3.7 or 15.2 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of
or exchange Debentures during a period beginning at the opening of business 15
days before any selection of Debentures to be redeemed and ending at the close
of business on the day of the mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange any Debenture so selected for
redemption, in whole or in part, except the unredeemed portion of any Debenture
being redeemed in part.
The Debentures shall not be transferred, except in compliance with the
Restricted Securities Legend, unless any such transfer is otherwise determined
by the Company to be in compliance with applicable law. Upon any distribution
of the Debentures to the holders of the Trust Securities in accordance with the
Declaration, the Company and the Trustee shall enter into a supplemental
indenture pursuant to Section 11.1(g) to provide for transfer restrictions
(including legends, if any, to be included on the Debentures) and procedures
with respect to the Debentures substantially similar to those contained in the
Declaration to the extent applicable in the circumstances existing at the time
of such distribution and the appointment of a Depositary.
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SECTION 2.6 MUTILATED, DESTROYED, LOST AND STOLEN DEBENTURES.
If any mutilated Debenture is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and make available for
delivery in exchange therefor a new Debenture of like principal amount and
tenor and bearing a number not contemporaneously outstanding, and such
mutilated Debenture shall be canceled by the Trustee in accordance with the
Indenture.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Debenture and (ii)
such security or indemnity as may be required by them, then, in the absence of
notice to the Company or the Trustee that such Debenture has been acquired by
a bona fide purchaser, the Company shall, subject to the following paragraph,
execute, and the Trustee shall authenticate and make available for delivery, in
lieu of any such destroyed, lost or stolen Debenture, a new Debenture of like
principal amount and tenor and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debenture, pay such Debenture.
Upon the issuance of any new Debenture under this Section, the Company may
require 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 Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and any such new
Debenture shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debentures.
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 Debentures.
SECTION 2.7 TEMPORARY DEBENTURES.
Pending the preparation of definitive Debentures, the Company may execute,
and upon Company Order the Trustee shall authenticate and make available for
delivery, temporary Debentures which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Debentures in lieu of which they
are issued, in registered form and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Debentures
may determine, as evidenced by their execution of such Debentures.
If temporary Debentures are issued, the Company will cause definitive
Debentures to be prepared without unreasonable delay. After the preparation of
definitive Debentures, all temporary Debentures may be surrendered in exchange
therefor, at the office of the Debenture Registrar, and the Company shall
execute and the Trustee shall authenticate and deliver an equal aggregate
principal amount of definitive Debentures in certificated form in exchange for
temporary Debentures. Such exchange shall be made by the Company at its own
expense and without any charge therefor. Until so exchanged, temporary
Debentures shall in all respects be entitled to the same benefits and subject
to the
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same limitations under this Indenture as Debentures in definitive
certificated form authenticated and delivered hereunder.
SECTION 2.8 PERSONS DEEMED OWNERS.
Prior to due presentment of a Debenture 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 Debenture is registered as the owner of such
Debenture for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Sections 2.3 and 2.5) any interest on such Debenture and
for all other purposes whatsoever, whether or not such Debenture shall 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 2.9 CANCELLATION.
All Debentures surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and promptly shall be canceled by the Trustee. The Company may at any time
deliver to the Trustee for cancellation any Debentures previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Debentures previously authenticated
hereunder which the Company has not issued and sold, and all Debentures so
delivered promptly shall be canceled by the Trustee. No Debentures shall be
authenticated in lieu of or in exchange for any Debentures canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Debentures held by the Trustee shall be disposed of as directed by a Company
Order; provided that the Trustee shall not be required to destroy the
certificates representing the canceled Debentures.
ARTICLE III
REDEMPTION OF DEBENTURES
SECTION 3.1 OPTIONAL REDEMPTION BY COMPANY.
(a) The Securities shall be subject to redemption on a pro-rata basis
(based on the principal amount of the Debentures) at the option of the
Corporation, in whole or from time to time in part, in each case as set forth
below, (i) if at any time on or after the date of the first issuance of the
Convertible Preferred Securities and prior to the second anniversary thereof
the average Closing Price of the Common Stock (as defined in the Certificate of
Designation governing the Convertible Preferred Securities) for 10 consecutive
Trading Days during such period equals or exceeds one hundred forty percent
(140%) of the Conversion Price then in effect, then for a period of 60 days
following the last day of such 10 day period, at a per Debenture
RedemptionPrice in cash equal to the principal amount thereof, together in the
case of any such redemption with accrued interest to the Redemption Date and
(ii) at any time on or after the second anniversary of the first issuance of
the Convertible Preferred Securities, at a per Debenture Redemption Price in
cash equal to the principal amount thereof together in the case of any such
redemption with accrued interest to the Redemption Date. The optional
Redemption Price shall be paid prior to 12:00 noon, New York time, on the
Redemption Date or at such earlier time as the Company determines, provided
that the Company shall deposit with the Trustee an
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amount sufficient to pay the optional Redemption Price by 10:00 a.m., New York
time, on the date such Optional Redemption Price is to be paid.
(b) The Company may not redeem fewer than all of the outstanding
Debentures unless all accrued and unpaid interest has been paid in cash on all
of the outstanding Debentures.
(c) Notwithstanding the foregoing, if Debentures are redeemed on any March
1 or September 1, accrued and unpaid interest shall be payable to Holders of
record on the relevant record date, instead of the Holders on the Redemption
Date.
(d) Notwithstanding the foregoing, the Trustee shall not redeem any
Debentures pursuant to this Section 3.1 or mail any notice of optional
redemption during the continuance of a default in payment of interest or
premium on the Debentures or of any Event of Default of which, in the case of
any Event of Default other than under Section 7.1(a) or (b), a Responsible
Officer of the Trustee has Actual Knowledge.
SECTION 3.2 APPLICABILITY OF ARTICLE.
Redemption of Debentures at the election of the Company, as permitted by
Section 3.1, shall be made in accordance with such Section and this Article.
SECTION 3.3 NO SINKING FUND.
The Debentures are not entitled to the benefit of any sinking fund.
SECTION 3.4 ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem Debentures shall be evidenced by an
Officers' Certificate. In the 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
Debentures to be redeemed.
SECTION 3.5 SELECTION BY TRUSTEE OF DEBENTURES TO BE REDEEMED.
If less than all the Debentures are to be redeemed, the particular
Debentures to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Debentures not previously
called for redemption, on a pro rata basis, in portions equal to $1,000 (or any
integral multiple thereof) of the principal amount of Debentures.
If Debentures selected for partial redemption are converted into Common
Stock in part before termination of the conversion right with respect to the
portion of the Debentures so selected, the converted portion of the Debentures
shall be deemed (so far as may be) to be the portion selected for redemption.
Debentures (or portions thereof) which have been converted into Common Stock
during a selection of Debentures to be redeemed shall be treated by the Trustee
as Outstanding for the purpose of such selection. In any case where more than
one Debenture is registered in the same name, the Trustee in its discretion may
treat the aggregate principal amount so registered as if it were represented by
one Debenture.
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The Trustee shall promptly notify the Company in writing of the Debentures
selected for redemption and, in the case of any Debentures 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 Debentures shall relate, in the
case of any Debentures redeemed or to be redeemed only in part, to the portion
of the principal amount of the Debentures which has been or is to be redeemed.
SECTION 3.6 NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in Section 16.4
to the Holders of Debentures to be redeemed not less than 30 nor more than 60
days prior to the Redemption Date. All notices of redemption shall identify
the Debentures (including the CUSIP number) to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued interest, if any,
to be paid upon such redemption;
(c) if less than all the Outstanding Debentures are to be redeemed,
the aggregate principal amount of Debentures to be redeemed, the
aggregate principal amount of Debentures to be outstanding after such
partial redemption, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Debentures to be
redeemed, and a statement to the effect that on or after the Redemption
Date upon surrender of such Debenture a new Debenture in the principal
amount equal to the unredeemed portion will be issued;
(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debenture to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date;
(e) the place or places where such Debentures are to be surrendered
for payment of the Redemption Price; and
(f) the Conversion Price then in effect, the date on which the right
to convert the Debentures to be redeemed will terminate, that the
Debentures called for redemption may be converted at any time prior to
the Redemption Date as provided in Article XV and the place or places
where such Debentures may be surrendered for conversion.
A notice of redemption published as contemplated by Section 16.4 need not
identify particular Debentures to be redeemed.
Notice of redemption of Debentures 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.
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SECTION 3.7 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 5.3) 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 Debentures
which are to be redeemed on that date.
If any Debenture called for redemption is converted into Common Stock, any
money deposited with the Trustee or with any Paying Agent or so segregated and
held in trust for the redemption of such Debenture shall (subject to any right
of the Holder of such Debenture or any Predecessor Debenture to receive
interest as provided in this Indenture) be paid to the Company upon Company
Request or, if then held by the Company, shall be discharged from such trust.
SECTION 3.8 DEBENTURES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Debentures 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 Debentures shall cease to bear interest. Upon surrender of any
such Debenture for redemption in accordance with said notice, such Debenture
shall be paid by the Company at the Redemption Price together with accrued
interest to the Redemption Date; subject to the provisions of Section 3.1(d).
If any Debenture called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Debenture.
SECTION 3.9 DEBENTURES REDEEMED IN PART.
Any Debenture which is to be redeemed only in part shall be surrendered at
a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and make available for delivery to the Holder of
such Debenture without service charge, a new Debenture or Debentures of like
tenor 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 Debenture so surrendered.
ARTICLE IV
SUBORDINATION OF DEBENTURES
SECTION 4.1 DEBENTURES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each Holder of a Debenture, by the
Holder's acceptance thereof, likewise covenants and agrees, that, to the extent
and in the manner hereinafter set forth in this Article, the indebtedness
represented by the Debenture and the payment of the principal of (and premium,
if any) and interest on each and all of the Debentures are hereby expressly
made subordinate
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and junior in right of payment to the prior payment in full of all Senior
Indebtedness of the Company, whether outstanding at the date of this Indenture
or thereafter incurred. No provision of this Article shall prevent the
occurrence of any Default or Event of Default hereunder.
SECTION 4.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
Upon any payment by the Company or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding-up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company
on account of the principal or interest on the Debentures; and upon any such
dissolution or winding-up or liquidation or reorganization, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, which the Holders of the Debentures or
the Trustee would be entitled to receive from the Company, except for the
provisions of this Article, shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, or by the Holders of the Debentures or by the Trustee
under the Indenture if received by them or it, directly to the holders of
Senior Indebtedness of the Company (pro rata to such holders on the basis of
the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness
in full, in money or money's worth, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness,
before any payment or distribution is made to the Holders of the Debentures or
to the Trustee.
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, prohibited by the foregoing shall be received by
the Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness of
the Company, as the case may be, remaining unpaid to the extent necessary to
pay such Senior Indebtedness in full in money in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
benefit of the holders of such Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, which are
subordinated in right of payment to all Senior Indebtedness which may at the
time be outstanding to substantially the same extent as, or to a greater extent
than, the Debentures are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article
XII shall not be deemed a dissolution, winding up, liquidation, reorganization,
assignment for the benefit of creditors or marshaling of assets and liabilities
of the Company for the purposes of this Section if the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
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by conveyance or transfer such properties and assets substantially as an
entirety, as the case may be, shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions set forth in Article XII.
SECTION 4.3 PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON ACCELERATION OF
DEBENTURES.
In the event that any Debentures are declared due and payable before their
Stated Maturity, then and in such event the holders of Senior Indebtedness
shall be entitled to receive payment in full of all amounts due or to become
due on or in respect of all Senior Indebtedness or provision shall be made for
such payment in cash, before the Holders of the Debentures are entitled to
receive any payment (including any payment which may be payable by reason of
the payment of any other indebtedness of the Company being subordinated to the
payment of the Debentures) by the Company on account of the principal of or
interest on the Debentures or on account of the purchase or other acquisition
of Debentures.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Debenture prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to
the time of such payment, have been made 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.
SECTION 4.4 NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.
In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the Company, as the case may be, beyond any applicable
grace period with respect thereto, or in the event that the maturity of any
Senior Indebtedness of the Company, as the case may be, has been accelerated
because of a default, then no payment shall be made by the Company with respect
to the principal (including redemption payments) of, or premium, if any, or
interest on the Debentures, unless and until such default is cured or waived or
ceases to exist or any such acceleration or demand for payment has been
rescinded.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 4.4, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
SECTION 4.5 PAYMENT PERMITTED IN CERTAIN SITUATIONS.
Nothing contained in this Article or elsewhere in this Indenture or in any
of the Debentures shall prevent (a) the Company, at any time except during the
pendency of any dissolution, winding-up, liquidation or reorganization of the
Company, whether voluntary or involuntary, or any bankruptcy, insolvency,
receivership or other proceedings of the Company referred to in Section 4.2 or
under the conditions described in Section 4.3 or 4.4, from making payments at
any time of principal of or interest
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on the Debentures, or (b) the application by the Trustee of any money deposited
with it hereunder to the payment of or on account of the principal of or
interest on the Debentures or the retention of such payment by the Holders, if,
at the time of such application by the Trustee, it did not have Actual
Knowledge that such payment would have been prohibited by the provisions of
this Article.
SECTION 4.6 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
Subject to the payment in full of all Senior Indebtedness or the provision
for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Indebtedness, the rights of the Holders
of Debentures shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article (equally and ratably with the holders of
indebtedness of the Company which by its express terms is subordinated to
indebtedness of the Company to substantially the same extent as the Debentures
are subordinated to the Senior Indebtedness and is entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to
receive payments and distributions of cash, property and securities applicable
to the Senior Indebtedness until the principal of and interest on the
Debentures shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the Holders of Debentures or the Trustee
would be entitled except for the provisions of this Article, and no payments
over pursuant to the provisions of this Article to or for the benefit of the
holders of Senior Indebtedness by Holders of Debentures or the Trustee, shall,
as among the Company, its creditors other than holders of Senior Indebtedness,
and the Holders of Debentures, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness.
SECTION 4.7 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article are solely for the purpose of defining the
relative rights of the Holders of Debentures on the one hand and the holders of
Senior Indebtedness on the other hand. Nothing contained in this Article or
elsewhere in this Indenture or in the Debentures shall (a) impair, as among the
Company, its creditors other than holders of Senior Indebtedness and the
Holders of Debentures, the obligation of the Company, which is absolute and
unconditional (and which, subject to the rights under this Article of the
holders of Senior Indebtedness, is intended to rank equally with all other
general obligations of the Company), to pay to the Holders of Debentures the
principal of (and premium, if any) and interest on the Debentures as and when
the same shall become due and payable in accordance with their terms; or (b)
affect the relative rights against the Company of the Holders of Debentures and
creditors of the Company, as the case may be, other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Debenture from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 4.8 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Debenture by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article and appoints the Trustee such Holder's attorney-in-fact for any and all
such purposes.
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SECTION 4.9 NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of Debentures, without
incurring responsibility to the Holders of Debentures and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of Debentures to the holders of Senior Indebtedness do
any one or more of the following: (a) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Senior
Indebtedness; and (d) exercise or refrain from exercising any rights against
the Company and any other Person.
SECTION 4.10 NOTICE TO TRUSTEE.
The Company shall use reasonable efforts to give prompt written notice to
a Responsible Officer of the Trustee of any fact known to the Company which
would prohibit the making of any payment to or by the Trustee in respect of any
Debentures pursuant to the provisions of this Article. Notwithstanding the
provisions of this Article or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment to or by the Trustee in respect of any
Debentures pursuant to the provisions of this Article, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Senior Indebtedness or from any
trustee therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 8.2, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall have not received the notice provided for in this Section at
least two Business Days prior to the date upon which, by the terms hereof, any
money may become payable for any purpose (including, without limitation, the
payment of the principal of (or premium, if any) or interest on any
Debentures), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purposes for which they were received, and shall not be
affected by any notice to the contrary that may be received by it within two
Business Days prior to such date.
Subject to the provisions of Section 8.2, 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 therefor) to establish that
such notice has been given by a holder of Senior Indebtedness (or a trustee
therefor). 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, 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, 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.
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SECTION 4.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 8.2, and the
Holders of Debentures shall be entitled conclusively to rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Debentures, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, as the case may be, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 4.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of such Senior Indebtedness shall be read into the
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness.
SECTION 4.13 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS,
PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 8.6.
SECTION 4.14 ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that Section 4.13 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 4.15 CERTAIN CONVERSIONS DEEMED PAYMENT.
For the purposes of this Article only, (a) the issuance and delivery of
junior securities (or cash paid in lieu of fractional shares) upon conversion
of Debentures in accordance with Article XV, shall not be deemed to constitute
a payment or distribution on account of the principal of or interest on
Debentures or on account of the purchase or other acquisition of Debentures,
and (b) the payment, issuance or delivery of cash, property or securities
(other than junior securities and cash paid in lieu of fractional shares) upon
conversion of a Debenture shall be deemed to constitute payment on account of
the
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principal or interest of such Debenture. For the purposes of this Section,
the term "junior securities" means (i) shares of any stock of any class of the
Company and (ii) securities of the Company which are subordinated in right of
payment to all Senior Indebtedness which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Debentures are so subordinated as provided in
this Article. Nothing contained in this Article or elsewhere in this Indenture
or in the Debentures is intended to or shall impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of
Debentures, the right, which is absolute and unconditional, of the Holder of
any Debenture to convert such Debenture in accordance with Article XV.
ARTICLE V
CERTAIN COVENANTS
SECTION 5.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees that it will duly and punctually pay the
principal of and interest on the Debentures in accordance with the terms of the
Debentures and this Indenture.
SECTION 5.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the United States an office or agency where
Debentures may be presented or surrendered for payment, where Debentures may be
surrendered for registration of transfer, exchange, or conversion and where
notices and demands to or upon the Company in respect of Debentures and this
Indenture may be served. The Company will give prompt notice to the Trustee
and to the Holders as provided in Sections 16.3 and 16.4, respectively, of the
location and any change in the location, of any such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
in respect of Debentures or shall fail to furnish the Trustee with the address
thereof, such presentations and surrenders of Debentures may be made and
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the same as its agent to receive such
respective presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Debentures 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 accordance with
the requirements set forth above for such purposes. The Company will give
prompt written notice to the Trustee and the Holders of Debentures of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 5.3 MONEY FOR DEBENTURES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with respect
to Debentures, it will, on or before each due date of the principal of and any
premium or interest on any of the Debentures, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to pay the
principal and any premium 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 to act.
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Whenever the Company shall have one or more Paying Agents for Debentures
it will, prior to each due date of the principal of and any premium or interest
on any Debentures, deposit with a Paying Agent a sum sufficient to pay the
principal and any premium or interest so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal or interest,
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure to act.
The Company will cause each Paying Agent for Debentures 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:
(a) hold all sums held by it for the payment of the principal of and
interest on Debentures 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;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Debentures) in the making of any payment of
principal of and interest on the Debentures; and
(c) 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 interest on any
Debenture and remaining unclaimed for two years after such principal and
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 the Debenture shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money and all
liability of the Company as trustee thereof shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in an Authorized Newspaper in each Place of Payment, notice that such
money remains unclaimed and that after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 5.4 EXISTENCE.
Subject to Article XII, 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 the Board of
Directors (in its reasonable judgment) 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.
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SECTION 5.5 STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate signed by its principal executive officer, principal financial
officer or principal accounting officer stating whether or not to the best
knowledge of the signer thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder), and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
The Company shall use reasonable efforts to file with the Trustee, within
five Business Days after becoming aware of any Default or Event of Default, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
SECTION 5.6 LIMITATION ON DIVIDENDS AND OTHER PAYMENTS.
In the event that an Event of Default shall have occurred and be
continuing, then, the Company shall not--
(x) declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase or make a liquidation payment
with respect to, any of its capital stock (other than (A) purchases or
acquisitions of shares of Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit
plans, (B) as a result of a reclassification of capital stock of the
Company or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of capital stock of
the Company, or (C) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock of the Company or the security
being converted or exchanged), or
(y) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem
any debt securities (including guarantees) issued by the Company
which rank pari passu with or junior to the Debentures; or
(z) make any guarantee payments with respect to the
foregoing.
Notwithstanding the foregoing, the Company will be permitted, in any
event, to make dividend, redemption, liquidation and guarantee payments on
capital stock of the Company, and interest, principal, redemption and guarantee
payments on debt securities issued by the Company ranking pari passu with or
junior to the Debentures, where the payment is made by way of securities
(including capital stock) that rank junior to the securities on which such
payment is being made.
SECTION 5.7 REGISTRATION RIGHTS.
(a) The holders of the Convertible Preferred Securities, the Debentures,
and the shares of Common Stock of the Company issuable upon conversion of the
Debentures into Common Stock (collectively, the "Registrable Securities") are
entitled to the benefits of a Registration Rights Agreement, dated as of April
16, 1997, among the Company and the Initial Purchaser of the Convertible
Preferred Securities (the "Registration Rights Agreement").
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(b) If on or prior to 90 days following the date of original issuance of
the Convertible Preferred Securities, the initial Shelf Registration Statement
filed with the Commission relating to the distribution of the Convertible
Preferred Securities by Fruehauf Trailer Corporation ("Fruehauf") is not
declared effective (a "Registration Default"), additional interest will accrue
on the Debentures from and including the day following such Registration
Default until the day on which such Shelf Registration Statement is declared
effective by the Commission at a rate equal to an additional four percent (4%)
per annum. Upon the effectiveness of the Shelf Registration Statement after
the 90-day period described above, the interest rate borne by the Debentures
from the date of such effectiveness will be reduced to six percent (6%) per
annum. Notwithstanding the foregoing, if the Commission refuses to declare
such initial registration statement effective due to the inability of Fruehauf
to provide audited financial statements of Freuhauf, required by the Commission
for such registration statement, then the interest rate increase described in
this Section 5.7(b) shall not be applicable unless and until 30 days following
the receipt by the Company of either (i) all such required audited financial
statements of Fruehauf, in form and substance satisfactory to the Commission or
(ii) an effective waiver by the Commission of the requirement to provide such
audited financial statements in order to declare effective such initial
registration statement. The Company shall use its best efforts to cause the
Commission to issue the waiver described in clause (ii) of the preceding
sentence as soon as practicable.
ARTICLE VI
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 6.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
As required by Section 312(a) of the Trust Indenture Act commencing on the
date of initial issuance of the Debentures and continuing for so long as any
Debenture remains outstanding, the Company will furnish or cause to be
furnished to the Trustee:
(a) semiannually, not later than March 31 and September 30 of each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of the Debentures ("List of Holders")
as of a date not more than 15 days prior to the delivery thereof,
provided, however, that the Company shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from
the most recent List of Holders given to the Trustee by or on behalf of
the Company; and
(b) at any other time, within 30 days of receipt by the Company of a
written request for a List of Holders as of a date no more than 15 days
before such List of Holders is given to the Trustee.
The Trustee shall preserve, in as current a form as is reasonably practicable,
all information contained in Lists of Holders given to it or which it receives
in the capacity as Debenture Registrar or Paying Agent (if acting in such
capacity), provided, however, that the Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
SECTION 6.2 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 of Debentures (i) contained in
the most recent list furnished to the Trustee
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pursuant to Section 6.1, (ii) received by the Trustee in its capacity as
Debenture Registrar and (iii) filed with it within the two preceding years
pursuant to Section 313(c)(2) of the Trust Indenture Act. The Trustee may (A)
destroy any list furnished to it as provided in Section 312(a) of the Trust
Indenture Act upon receipt of a new list so furnished, (B) destroy any
information received by it as Paying Agent (if so acting) hereunder upon
delivering to itself as Trustee, not earlier than March 20 or September 20 of
each year, a list containing the names and addresses of the Holders of
Debentures obtained from such information since the delivery of the next
previous list, if any, (C) destroy any list delivered to itself as Trustee
which was compiled from information received by it as Paying Agent (if so
acting) hereunder upon the receipt of a new list so delivered and (D) destroy
not earlier than two years after filing, any information filed with it pursuant
to Section 313(c)(2) of the Trust Indenture Act.
(b) If three or more Holders of Debentures (herein referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Debenture for a period of
at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
of Debentures with respect to their rights under this Indenture or under the
Debentures and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application, at its
election, either (i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 6.2(a), or (ii) inform
such applicants as to the approximate number of Holders of Debentures whose
names and addresses appear in the information preserved at the time by the
Trustee in accordance with Section 6.2(a), and as to the approximate cost of
mailing to such Holders the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of Debentures whose name and address appears in the
information preserved at the time by the Trustee in accordance with Section
6.2(a) a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment of the
reasonable expenses of mailing, unless within five days after such tender the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders of Debentures or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in
the written statement so filed, shall enter an order refusing to sustain any of
such objections or if after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders of Debentures with reasonable promptness after the entry of such order
and the renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of Debentures, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
of Debentures in accordance with Section 6.2(b), regardless of the source from
which such information was derived and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 6.2(b).
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SECTION 6.3 REPORTS BY TRUSTEE.
The Trustee shall in each year transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act in the manner provided pursuant thereto. If required
by Section 313(a) of the Trust Indenture Act, the Trustee shall, within 60 days
after each May 15 following the date of this Indenture deliver to Holders a
brief report, dated as of such May 15, which complies with the provisions of
Section 313(a).
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 any
Debentures are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when any Debentures are listed on any stock
exchange.
SECTION 6.4 REPORTS BY COMPANY.
The Company shall:
(a) 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 Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such 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 Exchange
Act 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; and
(b) 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 required to be filed
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
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE VII
DEFAULTS AND REMEDIES
SECTION 7.1 EVENTS OF DEFAULT.
"Event of Default," wherever used herein with respect to the Debentures,
means any one or more of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary
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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):
(a) default in the payment of any interest upon any Debenture 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 the
subordination provisions set forth in Article IV hereof); or
(b) default in the payment of the principal of (or premium, if any,
on) any Debenture as and when the same shall become due and payable
whether at maturity, upon redemption, by declaration or otherwise
(whether or not such payment is prohibited by the subordination
provisions set forth in Article IV hereof); or
(c) failure by the Company to issue and deliver Common Stock or
other property issuable upon an election to convert such Debentures
pursuant to Article XV (whether or not such delivery is prohibited by the
subordination provisions set forth in Article IV); or
(d) 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 90 days after there has been given, by registered
or certified mail, to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Debentures, 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
(e) the entry by a court having jurisdiction in the premises of a
decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law, or appointing a
custodian, receiver, liquidation, assignee, trustee, sequestrator or
other similar official of the Company or of any substantial part of their
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
(f) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency 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, liquidation, assignee,
trustee, sequestrator or similar official of the Company or of any
substantial part of their property, or the making by it of an assignment
for the benefit of creditors; or
SECTION 7.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default described in clause (a), (b), (c) or (d) of Section
7.1 above occurs and is continuing, then, and in each and every such case,
unless the principal of all of the Debentures shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
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principal amount of the Debentures then Outstanding hereunder, by notice in
writing to the Company (and to the Trustee if given by the Holders of
Debentures), may declare the entire principal of all Debentures and all
interest accrued thereon and any other amounts payable hereunder to be due and
payable immediately, and upon any such declaration the same shall become
immediately due and payable.
If an Event of Default described in clause (e) of Section 7.1 occurs, the
entire principal of all Debentures and all interest accrued thereon and any
other amounts payable hereunder shall become immediately due and payable,
without any declaration or other act on the part of the Trustee or the Holders.
At any time after a declaration of acceleration has been made and before a
judgment or decree for payment of the money due has been obtained by the
Trustee as provided in this Article hereinafter, the Holders of a majority in
aggregate principal amount of the Outstanding Debentures, 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 Debentures,
(B) the principal of any Debentures which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Debentures, and
(C) all sums paid or advanced by the Trustee and each
predecessor Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee and each
predecessor Trustee and their respective agents and counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Debentures that have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 7.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
In case the Trustee shall have proceeded to enforce any right with respect
to Debentures under this Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the Trustee, then and
in every such case the Company and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and
powers of the Company and the Trustee shall continue as though no such
proceedings had been taken.
SECTION 7.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if,
(a) default is made in the payment of any interest on any Debenture
when such interest becomes due and payable and such default continues for
a period of 30 days, or
(b) default is made in the payment of the principal of any
Debenture at Maturity thereof,
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the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of Debentures, the whole amount then due and payable on Debentures for
principal and interest and, to the extent that payment of such interest shall
be legally enforceable under applicable law, interest on any overdue principal
and on any overdue interest, at the rate per annum stated in the Debentures;
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
under Section 8.6.
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 (in
addition to exercising any other rights pursuant to Section 7.2) prosecute such
proceeding to judgment or final decree and may enforce the same against the
Company or any other obligor upon the Debentures 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 Debentures, wherever
situated.
If an Event of Default with respect to Debentures occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Debentures by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, either at law or in equity or in bankruptcy or
otherwise whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 7.4 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Debentures or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of Debentures
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,
(a) to file and prove a claim for the whole amount of principal and
any premium and interest owing and unpaid in respect of the Debentures
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and of the Holders of Debentures
allowed in such judicial proceeding, and
(b) 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 of Debentures to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders of Debentures, 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 8.6.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a
Debenture any plan of reorganization, arrangement, adjustment or composition
affecting the Debentures or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder of Debentures in any
such proceeding.
SECTION 7.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF DEBENTURES.
All rights of action and claims under this Indenture or under any of the
terms established with respect to the Debentures may be prosecuted and enforced
by the Trustee without the possession of any of the Debentures 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 due under Section 8.6, be for the ratable
benefit of the Holders of the Debentures in respect of which such judgment has
been recovered.
SECTION 7.6 APPLICATION OF MONEY COLLECTED.
Subject to the provisions of Article IV, any money collected by the
Trustee pursuant to this Article with respect to Debentures 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 any premium or
interest, upon presentation of the Debentures, and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 8.6;
SECOND: To the payment of the amounts then due and unpaid for principal of
and interest on the Debentures in respect of which such money has been
collected, ratably, without preference or priority of any kind, according to
the amounts due and payable on Debentures for principal and interest,
respectively.
SECTION 7.7 LIMITATION ON SUITS.
No Holder of any Debenture 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;
(a) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Debentures shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
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(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Debentures;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 7.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST AND TO CONVERT.
Notwithstanding any other provision in this Indenture, but subject to
Article IV of this Indenture, the Holder of any Debenture shall have the right,
which is absolute and unconditional, to receive payment of the principal of and
interest on the Debentures on the Stated Maturity or Maturities expressed in
the Debentures (or, in the case of redemption, on the Redemption Date) and to
convert such Debenture into Common Stock in accordance with Article XV and to
institute suit for the enforcement of any such payment and right to convert,
and such rights shall not be impaired without the consent of such Holder.
SECTION 7.9 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of Debentures has instituted any proceeding
to enforce any right or remedy under this Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders of
Debentures 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 7.10 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debentures in the last paragraph of
Section 2.6, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Debentures 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 7.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Debenture to
exercise any right or remedy accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein.
Subject to the provisions of Section 7.7, every right and remedy given by
this Article or by law to the Trustee or to the Holders of Debentures may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Debentures, as the case may be.
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SECTION 7.12 CONTROL BY HOLDERS OF DEBENTURES.
The Holders of a majority in aggregate principal amount of the Outstanding
Debentures shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Debentures, provided that,
(a) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(b) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction.
SECTION 7.13 WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Debentures may on behalf of the Holders of all the Debentures waive
any past default hereunder with respect to the Debentures and its consequences,
except a default
(a) in the payment of the principal of or any interest on any
Debenture as and when the same shall become due by the terms of
Debentures otherwise than by acceleration (unless such default has been
cured and sums sufficient to pay all matured installments of interest and
principal has been deposited with the Trustee (in accordance with Section
7.2)), or
(b) in the covenants contained in Sections 5.6 and 5.7, or
(c) in respect of a covenant or provision hereof which under Article
XI cannot be modified or amended without the consent of the Holder of
each Outstanding Debenture affected.
Upon any such waiver, the default covered thereby shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Indenture and the Company, the Trustee and the
holders of the Debentures shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 7.14 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Debenture by
such Holder's 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 and expenses, 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 Debentures, or to any suit
instituted by any Holder of any Debenture for the enforcement of the payment of
the principal of or interest on such Debenture on or after the Stated Maturity
or Maturities expressed in such Debenture (or, in the case of redemption, on or
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after the Redemption Date) or the right to convert such Debenture in accordance
with the provisions of this Indenture.
SECTION 7.15 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 VIII
CONCERNING THE TRUSTEE
SECTION 8.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING DEFAULT;
PRIOR TO DEFAULT.
With respect to the Holders of Debentures issued hereunder, the Trustee,
prior to the occurrence of an Event of Default with respect to the Debentures
and after the curing or waiving of all Events of Default which may have
occurred with respect to Debentures, undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture. In case an Event
of Default with respect to the Debentures has occurred (which has not been
cured or waived), the Trustee shall exercise with respect to the Debentures
such of the rights and powers vested in it by this Indenture, and shall 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. 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:
(a) prior to the occurrence of an Event of Default with respect to
the Debentures and after the curing or waiving of all such Events of
Default with respect to the Debentures which may have occurred:
(i) the duties and obligations of the Trustee with respect to
the Debentures shall be determined solely by the express provisions
of this Indenture, and the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically
set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee;
and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon any statements, certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but
in the case of any such statements, 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, on their face, they conform to
the requirements of this Indenture, but shall otherwise have no
duty to determine the accuracy or completeness thereof or whether
the same comply with applicable laws;
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(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(c) 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 pursuant to Section 7.12 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
(d) whether or not therein 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 8.1
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.
SECTION 8.2 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of the Trust Indenture Act:
(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 or as
otherwise expressly provided herein and any resolution of the Board of
Directors may be sufficiently evidenced by a Board 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 of its selection and the
written advice of such 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 of Debentures 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; provided,
however, that nothing contained in this Section 8.2(e) shall be taken to
relieve the Trustee, upon the occurrence of an Event of Default, from its
obligations expressly created hereunder to exercise the rights and powers
vested in it by this Indenture;
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(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 8.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBENTURES.
The recitals contained herein and in the Debentures (except the Trustee's
certificates of authentication) shall be taken as the statements of the
Company, and the Trustee or any Authenticating Agent assumes no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of any Debentures. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Debentures or the proceeds thereof.
SECTION 8.4 MAY HOLD DEBENTURES.
The Trustee, any Authenticating Agent, any Paying Agent, any Debenture
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Debentures and, subject to
Sections 8.9 and 8.11, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Debenture Registrar or such other agent.
SECTION 8.5 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 8.6 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Trustee or any predecessor Trustee from time to
time such compensation as shall be agreed in writing between the Company
and the Trustee 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);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee or any predecessor 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
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the compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify the Trustee and any predecessor Trustee for, and to
hold it harmless against, any and all loss, damage, claim, liability or
expense, including taxes (other than taxes based on the income of the
Trustee) incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise 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 Section 7.1(e) or Section 7.1(f), 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 laws.
The provisions of this Section 8.6 shall survive the termination of this
Indenture.
SECTION 8.7 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 8.8.
(b) The Trustee may resign at any time with respect to the Debentures by
giving written notice thereof to the Company. If the instrument of acceptance
by a successor Trustee required by Section 8.8 shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Debentures.
(c) The Trustee may be removed at any time with respect to the Debentures
by Act of the Holders of a majority in principal amount of the Outstanding
Debentures delivered to the Trustee and to the Company. If the instrument of
acceptance by a successor Trustee required by Section 8.8 shall not have been
delivered to the Trustee within 30 days after the delivery of such Act of
removal, the Trustee being removed may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Debentures.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of
the Trust Indenture Act after written request therefor by the
Company or by any Holder of a Debenture who has been a bona fide
Holder of a Debenture for at least six months, or
(2) the Trustee shall cease to be eligible under Section 8.10
and Section 310(a) of the Trust Indenture Act and shall fail to
resign after written request therefor by the Company or by any
Holder of a Debenture who has been a bona fide Holder of a
Debenture for at least six months, 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
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for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may
remove the Trustee with respect to all Debentures, or (ii) subject
to Section 7.14 any Holder of a Debenture who has been a bona fide
Holder of a Debenture for at least six months may, on behalf of
himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect
to all Debentures and the appointment of a successor Trustee or
Trustees.
(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, with
respect to the Debentures, the Company, by a Board Resolution, shall promptly
appoint a successor Trustee or Trustees with respect to the Debentures (it
being understood that at any time there shall be only one Trustee with respect
to the Debentures) and shall comply with the applicable requirements of Section
8.8. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee with respect to the
Debentures shall be appointed by Act of the Holders of a majority in principal
amount of Outstanding Debentures delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements
of Section 8.8, become the successor Trustee with respect to the Debentures and
to that extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Debentures shall have been so appointed
by the Company or the Holders of Debentures and accepted appointment in the
manner required by Section 8.8, any Holder of a Debenture who has been a bona
fide Holder of a Debenture for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the Debentures.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Debentures and each appointment of a success
or Trustee with respect to the Debentures in the manner provided in Section
16.4. Each notice shall include the name of the successor Trustee with
respect to the Debentures and the address of its Corporate Trust Office.
SECTION 8.8 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Debentures, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but on the written
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.
(b) Upon the written request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) of this Section.
(c) 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.
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SECTION 8.9 DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 8.10 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall be at all times a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $100,000,000. If such Person
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 Person 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 hereunder specified in this
Article.
SECTION 8.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Debentures), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 8.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Debentures 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 Debentures so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Debentures.
SECTION 8.13 APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with respect to
Debentures which shall be authorized to act on behalf of the Trustee to
authenticate Debentures issued upon original issue or upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
2.6, and Debentures 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 Debentures 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 approved by the Company in writing prior to
the appointment thereof, which approval may be withheld for any reason. If
such Authenticating Agent publishes reports of condition at least annually,
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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 such 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 such 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. The Company may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Trustee. 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 upon the prior written approval thereof by the Company, which approval
may be withheld for any reason, and the Trustee shall promptly give notice of
such appointment to all Holders of Debentures pursuant to Section 16.4. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to Debentures is made pursuant to this
Section, the Debentures may have endorsed thereon, in addition to the Trustee's
certificate of authentication, an alternative certificate of authentication in
the following form:
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This is one of the Debentures referred to in the within-mentioned
Indenture.
[NAME OF TRUSTEE]
By ---------------------------------
Authenticating Agent
By ---------------------------------
Authorized Signatory
If all of the Debentures may not be originally issued at one time, and if
the Company has an Affiliate eligible to be appointed as an Authenticating
Agent hereunder or the Trustee does not have an office capable of
authenticating Debentures upon original issuance located in a Place of Payment
where the Company wishes to have Debentures authenticated upon original
issuance, the Trustee, if so requested by the Company in writing (which writing
need not comply with Section 16.1 and need not be accompanied by an opinion of
counsel), shall appoint in accordance with this Section an Authenticating Agent
(which if so requested by the Company, shall be such Affiliate of the Company)
having an office in a Place of Payment designated by the Company with respect
to the Debentures.
SECTION 8.14. NOTICE OF DEFAULTS.
If a Default occurs hereunder with respect to Debentures, the Trustee
shall give the Holders of Debentures notice of such Default as and to the
extent provided by the Trust Indenture Act; provided, however, that in the case
of any Default of the character specified in Section 7.1(d), no such notice to
Holders shall be given until at least 30 days after the occurrence thereof.
ARTICLE IX
ACTS OF HOLDERS
SECTION 9.1 ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing. 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 or proxy, or of the holding by any
Person of a Debenture, shall be sufficient for any purpose of this Indenture
and (subject to Section 8.1) 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
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officer authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to such notary
public or other such officer the execution thereof. Where such execution is by
a signer acting in a capacity other than the signer's individual capacity, such
certificate or affidavit shall also constitute sufficient proof of the signer's
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 proved
in any other manner which the Trustee reasonably deems sufficient.
(c) The principal amount of Debentures held by any Person, and the
date of holding the same, shall be proved by the Debenture Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of a Debenture shall bind every future Holder
of the same Debenture and the Holder of every Debenture 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 Debenture.
(e) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining
the Holders of Outstanding Debentures entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders. If not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such action, or, in the case of any
such vote, prior to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most recent list of
Holders required to be provided pursuant to Section 6.1) prior to such first
solicitation or vote, as the case may be. With regard to any record date, only
the Holders on such date (or their duly designated proxies) shall be entitled
to give or take, or vote on, the relevant action. With regard to any action
that may be given or taken hereunder only by Holders of a requisite principal
amount of Outstanding Debentures (or their duly appointed agents) and for which
a record date is set pursuant to this paragraph, the Company may, at its
option, set an expiration date after which no such action purported to be given
or taken by any Holder shall be effective hereunder unless given or taken on or
prior to such expiration date by Holders of the requisite principal amount of
Outstanding Debentures on such record date (or their duly appointed agents).
On or prior to any expiration date set pursuant to this paragraph, the Company
may, on one or more occasions at its option, extend such date to any later
date. Nothing in this paragraph shall prevent any Holder (or any duly
appointed agent thereof) from giving or taking, after any expiration date, any
action identical to, or, at any time, contrary to or different from, any action
given or taken, or purported to have been given or taken, hereunder by a Holder
on or prior to such date, in which event the Company may set a record date in
respect thereof pursuant to this clause.
ARTICLE X
MEETINGS OF HOLDERS OF DEBENTURES
SECTION 10.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Debentures may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Debentures.
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SECTION 10.2 CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of Debentures
for any purpose specified in Section 10.1, to be held at such time and at such
place as the Trustee shall determine. Notice of every meeting of Holders of
Debentures setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 16.4, not less than 21 nor more than 180 days prior
to the date fixed for the meeting (or, in the case of a meeting of Holders with
respect to Debentures all or part of which are represented by a Book-Entry
Debenture, not less than 20 nor more than 40 days).
(b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 25% in principal amount of the Outstanding Debentures
shall have requested the Trustee to call a meeting of the Holders of Debentures
for any purpose specified in Section 10.1, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the first notice of such meeting within 21 days
after receipt of such request or shall not thereafter proceed to cause the
meeting to be held as provided herein, then the Company or the Holders of
Debentures in the amount above specified, as the case may be, may determine the
time and the place for such meeting and may call such meeting for such purposes
by giving notice thereof as provided in Subsection (a) of this Section.
SECTION 10.3 PERSONS ENTITLED TO VOTE AT MEETINGS.
Upon the calling of a meeting of Holders with respect to the Debentures
all or part of which are represented by a Book-Entry Debenture, a record date
shall be established for determining Holders of Outstanding Debentures entitled
to vote at such meeting, which record date shall be the close of business on
the day the notice of the meeting of Holders is given in accordance with
Section 10.2. The Holders on such record date, and their designated proxies,
and only such Persons, shall be entitled to vote at any meeting of Holders. To
be entitled to vote at any meeting of Holders a Person shall (a) be a Holder of
one or more Debentures or (b) be a Person appointed by an instrument in writing
as proxy by a Holder of one or more Debentures; provided, however, that in the
case of any meeting of Holders with respect to the Debentures all or part of
which are represented by a Book-Entry Debenture, only Holders, or their
designated proxies, of record on the record date established pursuant to
Section 10.3 hereof shall be entitled to vote at such meeting. The only
Persons who shall be entitled to be present or to speak at any meeting of
Holders shall be the Persons entitled to vote at such meeting and their counsel
and any representatives of the Trustee and its counsel and any representatives
of the Company and its counsel.
SECTION 10.4 QUORUM; ACTION.
The Persons entitled to vote a majority in principal amount of the
Outstanding Debentures shall constitute a quorum for a meeting of Holders of
Debentures; provided, however, that if any action is to be taken at such
meeting with respect to a consent or waiver which this Indenture expressly
provides may be given by the Holders of a specified percentage in aggregate
principal amount of Outstanding Debentures that is less or greater than a
majority in principal amount of the Outstanding Debentures, then, with respect
to such action (and only such action) the Persons entitled to vote such lesser
or greater percentage in principal amount of the Outstanding Debentures shall
constitute a quorum. In the absence of a quorum within 30 minutes of the time
appointed for any such meeting, the meeting shall, if convened at the request
of Holders of Debentures, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman
of the meeting prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such
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adjourned meeting may be further adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such adjourned meeting. Notice of the reconvening of any adjourned meeting
shall be given as provided in Section 10.2(a), except that such notice need be
given only once not less than five days prior to the date on which the meeting
is scheduled to be reconvened. Notice of the reconvening of an adjourned
meeting shall state expressly the percentage, as provided above, of the
principal amount of the outstanding Debentures which shall constitute a quorum.
Notwithstanding the foregoing, no meeting of Holders with respect to Debentures
which is represented in whole or in part by a Book-Entry Debenture, shall be
adjourned to a date more than 90 days after the record date for such meeting
unless the Trustee shall send out a new notice of meeting and establish, in
accordance with Section 10.3, a new record date for Holders entitled to vote at
such meeting.
Except as limited by the proviso to Section 11.2, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Debentures; provided, however,
that, except as limited by the proviso to Section 11.2, any resolution with
respect to any consent or waiver which this Indenture expressly provides may be
given by the Holders of a specified percentage in aggregate principal amount of
Outstanding Debentures that is less or greater than a majority in principal
amount of the Outstanding Debentures may be adopted at a meeting or an
adjourned meeting duly convened and at which a quorum is present as aforesaid
only by the affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Debentures.
Any resolution passed or decision taken at any meeting of Holders of
Debentures duly held in accordance with this Section shall be binding on all
the Holders of Debentures, whether or not present or represented at the
meeting.
SECTION 10.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS.
(a) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting
of Holders of Debentures in regard to proof of the holding of Debentures and of
the appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate. Except as otherwise
permitted or required by any such regulations, the holding of Debentures shall
be proved in the manner specified in Section 9.1 and the appointment of any
proxy shall be proved in the manner specified in Section 9.1 or by having the
signature of the person executing the proxy witnessed or guaranteed by any
trust company, bank or banker authorized by Section 9.1. Such regulations may
provide that written instruments appointing proxies, regular on their face, may
be presumed valid and genuine without the proof specified in Section 9.1 or
other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Debentures as provided in Section 10.2(b), in which
case the Company or the Holders of Debentures calling the meeting, as the case
may be, shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected by vote of
the Persons entitled to vote a majority in principal amount of the Outstanding
Debentures represented at the meeting.
(c) At any meeting each Holder of a Debenture or proxy shall be entitled
to one vote for each $1,000 principal amount of the Outstanding Debentures held
or represented by him; provided, however, that no vote shall be cast or counted
at any meeting in respect of any Debenture challenged as
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not Outstanding and ruled by the chairman of the meeting to be not Outstanding.
The chairman of the meeting shall have no right to vote, except as a Holder of
a Debenture or proxy.
(d) Any meeting of Holders of Debentures duly called pursuant to Section
10.2 at which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority in principal amount of the Outstanding Debentures
represented at the meeting; and the meeting may be held as so adjourned without
further notice.
SECTION 10.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders of
Debentures shall be by written ballots on which shall be subscribed the
signatures of the Holders of Debentures or of their representatives by proxy
and the principal amounts and serial numbers of the Outstanding Debentures held
or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record, at least in duplicate, of the proceedings of each meeting
of Holders of Debentures shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors
of votes on any vote by ballot taken thereat and affidavits by one or more
persons having knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was given as provided in Section 10.2 and,
if applicable, Section 10.4. Each copy shall be signed and verified by the
affidavits of the chairman and secretary of the meeting and one such copy shall
be delivered to the Company, and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 11.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders of Debentures, 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:
(a) 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 Debentures; or
(b) to add to the covenants of the Company for the benefit of the
Holders of Debentures or to surrender any right or power herein conferred
upon the Company; or
(c) to add any additional Events of Default; or
(d) to evidence and provide for the acceptance of appointment
thereunder by a successor Trustee with respect to the Debentures and to
add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of
Section 8.8; or
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(e) to make further provision beneficial to the Holders with respect
to the conversion rights of Holders pursuant to the requirements of
Article XV; or
(f) 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, provided that such
action shall notadversely affect the interests of the Holders of
Debentures in any material respect; or
(g) to make further provision beneficial to the Holders for the
registration of the Debentures as provided in the Registration Rights
Agreement.
SECTION 11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Debentures affected by such supplemental
indenture, 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 of
Debentures under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of each Holder of each Outstanding
Debenture,
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Debenture, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the coin or currency in which any Debenture
or 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
(b) reduce the percentage in principal amount of the Outstanding
Debentures, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver of certain defaults hereunder and their consequences provided
for in this Indenture, or reduce the requirements of Section 10.4 for
quorum or voting; or
(c) modify any of the provisions of this Section or Section 7.13,
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 Debenture; or
(d) make any change that adversely affects the right to convert any
Debenture into Common Stock as provided in Article XV or decrease the
conversion rate or increase the conversion price of any such Debenture,
or
(e) make any change in Article IV that adversely affects the rights
of any Holders of Outstanding Debentures.
So long as any Convertible Preferred Securities are outstanding, no
supplemental indenture shall, without the consent of each holder of Convertible
Preferred Securities, amend Section 7.16 so as to eliminate or materially
impair the right of such holders to institute Direct Actions in the
circumstances set forth therein.
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It shall not be necessary for any Act of Holders of Debentures 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 11.3 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 8.2) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 11.4 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Debentures theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 11.5 REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES.
Debentures 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 as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Debentures so modified as to
conform, in the opinion of the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Debentures.
ARTICLE XII
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 12.1 COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
The Company shall not merge or consolidate with any other corporation or
sell or convey all or substantially all of its assets to any Person, unless (a)
either the Company shall be the continuing corporation, or the successor
corporation (if other than the Company) shall be a corporation organized under
the laws of the United States of America or any State thereof and shall
expressly assume the due and punctual payment of the principal of and interest
on all the Debentures, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed or observed by the Company, by supplemental indenture
satisfactory to the Trustee, executed and delivered to the Trustee by such
corporation, (b) the Company or such successor corporation, as the case may be,
shall not, immediately after such merger or consolidation, or such sale or
conveyance, be in default in the performance of any such covenant or condition
and (c) the Company or any Person formed by or surviving any such consolidation
or merger, or to which such sale, assignment, transfer, lease, conveyance or
other disposition will have been made (i) will have Total Consolidated Net
Worth (immediately after the transaction but prior to any purchase accounting
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adjustments resulting from the transaction) equal to or greater than the Total
Consolidated Net Worth of the Company.
SECTION 12.2 SUCCESSOR CORPORATION SUBSTITUTED.
In case of any such consolidation, merger, sale or conveyance, and
following such an assumption by the successor corporation, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein. Such successor corporation may cause to
be signed, and may issue either in its own name or in the name of the Company
prior to such succession any or all of the Debentures issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation instead of the
Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
securities which previously shall have been signed and delivered by the
officers of the Company, to the Trustee for authentication, and any Debentures
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All of the Debentures so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Debentures theretofore or thereafter issued in accordance with the terms
or this Indenture as though all of such Debentures had been issued at the date
of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such changes
in phraseology and form (but not in substance) may be made in the Debentures
thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance by
way of lease) the Company or any successor corporation which shall theretofore
have become such in the manner described in this Article shall be discharged
from all obligations and covenants under this Indenture and the Debentures and
may be liquidated and dissolved.
SECTION 12.3 OPINION OF COUNSEL TO TRUSTEE.
The Trustee may receive an Opinion of Counsel, prepared in accordance with
Section 16.1, as conclusive evidence that any such consolidation, merger, sale,
lease or conveyance, and any such assumption, and any such liquidation or
dissolution, complies with the applicable provisions of this Indenture.
ARTICLE XIII
SATISFACTION AND DISCHARGE
SECTION 13.1 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Debentures herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:
(a) either
(1) all Debentures theretofore authenticated and delivered
(other than (i) Debentures which have been destroyed, lost or
stolen and which have been replaced or
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paid as provided in Section 2.6, and (ii) Debentures 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 5.3)
have been delivered to the Trustee for cancellation; or
(2) all such Debentures not theretofore delivered to the
Trustee for cancellation,
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at
the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds
in trust for the purpose, an amount sufficient to pay and discharge
the entire indebtedness on such Debentures not theretofore
delivered to the Trustee for cancellation, for principal and any
interest to the date of such deposit (in the case of Debentures
which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 8.6, the
obligations of the Company to any Authenticating Agent under Section 8.13 and,
if money shall have been deposited with the Trustee pursuant to clause (a)(2)
of this Section, the obligations of the Trustee under Section 13.2 and the last
paragraph of
Section 5.3 shall survive.
SECTION 13.2 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 5.3, all money
deposited with the Trustee pursuant to Section 13.1 shall be held in trust and
applied by it, in accordance with the provisions of the Debentures and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and any interest for whose payment such money has been deposited with the
Trustee.
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ARTICLE XIV
IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS, DIRECTORS AND EMPLOYEES.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of a Debenture, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, shareholder, officer,
director or employee, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company, 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
of the Company, and that no such personal liability whatever shall attach to,
or is or shall be incurred by, the incorporators, shareholders, officers,
directors or employees, as such, of the Company or of any successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations or agreements contained in
this Indenture or in any of the Debentures or implied therefrom; and that any
and all such personal liability, 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, shareholder, officer, director or employee, as such,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations or agreements contained in this Indenture or in any
of the Debentures 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 Debentures.
All payments of interest and other amounts, if any, to be made by the
Trustee hereunder shall be made only from the money deposited with the Trustee
and only to the extent that the Trustee shall have sufficient income or
proceeds to make such payments in accordance with the terms of this Indenture,
and each Holder thereof, by its acceptance of a Debenture, agrees that it will
look solely to the income and proceeds deposited with the Trustee to the extent
available for distribution to such Holder as provided and that the Trustee, its
incorporators, shareholders, officers, directors and employees are not
personally liable in any manner to such Holder for any amounts payable or any
liability under this Indenture or any Debenture.
ARTICLE XV
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 15.1 CONVERSION RIGHTS.
Subject to and upon compliance with the provisions of this Article XV, the
Debentures are convertible, at the option of the Holder, at any time beginning
on the date of initial issuance of such Debenture and prior to the Maturity
thereof (or, in the case of Debentures called for redemption, prior to the
close of business on the Business Day prior to the corresponding Redemption
Date) into fully paid and nonassessable shares of Common Stock at an initial
conversion rate of 46.784 shares of Common Stock for each $1,000 in aggregate
principal amount of Debentures (equal to a Conversion Price of $21.375 per
share of Common Stock), subject to adjustment as described in this Article XV.
A Holder of Debentures may convert the principal amount of and accrued but
unpaid interest on the Debentures into that number of fully paid and
nonassessable shares of Common Stock obtained by dividing the principal amount
of the Debentures to be converted by such Conversion Price. All calculations
under this Article XV shall be made to the nearest cent or to the nearest
1/100th of a share, as the case may be.
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SECTION 15.2 CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Debentures, the Holder
thereof shall deliver to the Trustee and the Company an irrevocable Notice of
Conversion setting forth the principal amount of Debentures to be converted,
together with the name or names, if other than the Holder, in which the shares
of Common Stock should be issued upon conversion and, if such Debentures are
definitive Debentures, surrender to the Conversion Agent the Debentures to be
converted, duly endorsed or assigned to the Company or in blank.
If a Notice of Conversion is delivered on or after a Regular Record Date
and prior to the subsequent Interest Payment Date, the Holder on the Regular
Record Date will be entitled to receive the interest payable on the subsequent
Interest Payment Date on the portion of Debentures to be converted
notwithstanding the conversion thereof prior to such Interest Payment Date.
Except as otherwise provided in the immediately preceding sentence, in the case
of any Debenture which is converted, interest whose payment date is after the
date of conversion of such Debenture shall not be payable, and the Company
shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest on the Debentures being
converted, which shall be deemed to be paid in full. Each conversion shall be
deemed to have been effected immediately prior to the close of business on the
day on which the Notice of Conversion was received (the "Conversion Date") by
the Trustee from the Holder.
The Person or Persons entitled to receive Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such Common Stock as of the Conversion Date. As promptly as practicable on or
after the Conversion Date, the Company shall issue and deliver at the office of
the Trustee, unless otherwise directed by the Holder in the Notice of
Conversion, a certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with the cash payment, if
any, in lieu of any fraction of any share to the Person or Persons entitled to
receive the same. The Trustee shall deliver such certificate or certificates
to such Person or Persons.
(b) The Company's delivery upon conversion of the fixed number of shares
of Common Stock into which the Debentures are convertible (together with the
cash payment, if any, in lieu of fractional shares) shall be deemed to satisfy
the Company's obligation to pay the principal amount at Maturity of the portion
of Debentures so converted and any unpaid interest accrued on such Debentures
at the time of such conversion.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Trustee a cash
adjustment in an amount equal to the same fraction of the Closing Price of such
fractional interest on the date on which the Debentures were duly surrendered
to the Trustee for conversion, or, if such day is not a Trading Day, on the
next Trading Day, and the Trustee in turn will make such payment, if any, to
the Holder of the Debentures.
(d) In the event of the conversion of any Debenture in part only, a new
Debenture or Debentures for the unconverted portion thereof will be issued in
the name of the Holder thereof upon the cancellation thereof in accordance with
this Section 15.2.
(e) In effecting the conversion transactions described in this Section
15.2, the Trustee is acting as agent of the holders of Debentures. The Trustee
is hereby authorized to convert all or a portion of the Debentures into Common
Stock and thereupon to deliver such shares of Common
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Stock in accordance with the provisions of this Article XV and to deliver to
the Holder thereof a new Debenture or Debentures for any resulting unconverted
principal amount.
SECTION 15.3 CONVERSION PRICE ADJUSTMENTS.
The Conversion Price shall be adjusted from time to time as follows:
(a) In case the Company shall, while any of the Debentures are
outstanding, (i) pay a dividend or make a distribution with respect to Common
Stock in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, (iii) combine outstanding shares of Common Stock into a smaller number
of shares or (iv) issue by reclassification of shares of Common Stock any
shares of capital stock of the Company, the conversion privilege and the
Conversion Price for the Debentures shall be adjusted so that the Holder of any
Debenture thereafter surrendered for conversion shall be entitled to receive
the number of shares of capital stock of the Company which such Holder would
have owned immediately following such action had such Debenture been converted
immediately prior thereto. An adjustment made pursuant to this Subsection (a)
shall become effective immediately after the record date in the case of a
dividend or other distribution and shall become effective immediately after the
effective date in case of a subdivision, combination or reclassification (or
immediately after the record date if a record date shall have been established
for such event). If, as a result of an adjustment made pursuant to this
Subsection (a), the Holder of any Debenture thereafter surrendered for
conversion shall become entitled to receive shares of two or more classes or
series of capital stock of the Company, the Board of Directors (whose
determination shall be conclusive and shall be described in a Board Resolution
filed with the Trustee) shall determine the allocation of the adjusted
Conversion Price for the Debentures between or among shares of such classes
or series of capital stock.
(b) In case the Company shall, while any of the Debentures are
outstanding, issue rights, options or warrants to all or substantially all
holders of Common Stock entitling them (for a period expiring within 45 days
after the record date mentioned below) to subscribe for or purchase shares of
Common Stock at a price per share less than the Current Market Price per share
of Common Stock (as determined pursuant to Subsection (g) below) on the record
date mentioned below, the Conversion Price for the Debentures shall be adjusted
so that the Conversion Price shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the date of issuance of
such rights or warrants by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares which the aggregate offering price
of the total number of shares so offered for subscription or purchase would
purchase at such Current Market Price, and of which the denominator shall be
the number of shares of Common Stock outstanding on the date of issuance of
such rights or warrants plus the number of additional shares of Common Stock
offered for subscription or purchase. Such adjustment shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of
Common Stock are not so delivered after the expiration of such rights or
warrants, the Conversion Price shall be readjusted to the Conversion Price
which would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been fixed.
For the purposes of this subsection, the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company. The Company shall not issue any rights or warrants in respect of
shares of Common Stock held in the treasury of the Company. In case any rights
or warrants referred to in this subsection in respect of which an adjustment
shall have been made shall expire unexercised within 45 days after the same
shall have been distributed or issued by the Company, the Conversion Price
shall be readjusted at the time of such expiration to the Conversion Price that
would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
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(c) Subject to the last sentence of this subsection (c), in case the
Company shall, by dividend or otherwise, distribute to all holders of Common
Stock evidences of its indebtedness, shares of any class or series of capital
stock, cash or assets or rights or warrants to subscribe for or purchase any of
its securities (excluding any rights or warrants referred to in subsection (b),
any dividend or distribution paid exclusively in cash and any dividend or
distribution referred to in subsection (a) of this Section 15.3), the
Conversion Price shall be reduced so that the Conversion Price 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 subsection (c) by a fraction of which the numerator shall be the Current
Market Price per share (determined as provided in subsection (g)) of the Common
Stock on the date fixed for the payment of such distribution (the "Reference
Date") less the fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors), on the Reference Date, of the portion
of the evidences of indebtedness, shares of capital stock, cash and assets so
distributed or of such subscription rights or warrants applicable to one share
of Common Stock and of which the denominator shall be such Current Market Price
per share of the Common Stock, such reduction to become effective immediately
prior to the opening of business on the day following the Reference Date;
provided, however, that in the event the numerator shall be less than one, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder of Debentures shall have the right to receive upon conversion the amount
of such distribution such Holder would have received had such Holder converted
each Debenture immediately prior to the Reference Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not occurred. If the Board of Directors
determines the fair market value of any distribution for purposes of this
subsection (c) by reference to the actual or when issued trading market 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 of Common Stock (determined as provided in subsection (g)).
For purposes of this subsection (c), any dividend or distribution that includes
shares of Common Stock or rights or warrants to subscribe for or purchase
shares of Common Stock shall be deemed instead to be (i) a dividend or
distribution of the evidences of indebtedness, shares of capital stock, cash or
assets other than such shares of Common Stock or such rights or warrants
(making any Conversion Price reduction required by this subsection (c))
immediately followed by (ii) a dividend or distribution of such shares of
Common Stock or such rights or warrants (making any further Conversion Price
reduction required by subsection (a) or (b)), except (A) the Reference Date of
such dividend or distribution as defined in this subsection (c) shall be
substituted as (1) "the record date in the case of a dividend or other
distribution," and (2) "the record date for the determination of stockholders
entitled to receive such rights or warrants" and (3) "the date fixed for such
determination" within the meaning of subsections (a) and (b) and (B) any shares
of Common Stock included in such dividend or distribution shall not be deemed
outstanding for purposes of computing any adjustment of the Conversion Price in
subsection (a).
(d) [RESERVED]
(e) In case a tender or exchange offer (other than an odd-lot offer) made
by the Company or any Subsidiary of the Company for all or any portion of the
Common Stock shall expire and such tender or exchange offer shall involve the
payment by the Company or such Subsidiary of consideration per share of Common
Stock having a fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors) at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it shall have been amended) that exceeds the Current Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time, the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect
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immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this subsection (e) by a fraction (which shall not be greater
than one) of which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the Expiration Time
multiplied by the Current Market Price of Common Stock on the Trading Day next
succeeding the Expiration Time and of which the denominator shall be the sum of
(i) 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 or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares") and (ii) the product of the number of shares of the Common
Stock outstanding (less any Purchased Shares) at the Expiration Time and the
Current Market Price of Common Stock on the Trading Day next succeeding the
Expiration Time, such reduction to become retroactively effective immediately
prior to the opening of business on the day following the Expiration Time.
(f) In case a tender or exchange offer made by a Person other than the
Company or any Subsidiary of the Company for all or any portion of the Common
Stock shall expire and such tender or exchange offer shall involve the payment
by a Person other than the Company or any Subsidiary of the Company of
consideration per share of Common Stock having a fair market value (as
determined in good faith by the Board of Directors, whose determination shall
be conclusive and described in a resolution of the Board of Directors) at the
applicable Expiration Time that exceeds the Current Market Price of the Common
Stock on the Trading Day next succeeding the applicable Expiration Time in
which as of the closing date of the offer the Board of Directors of the Company
is not recommending rejection of the offer, 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 subsection (f) by a fraction
(which shall not be greater than one) of which the numerator shall be the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) at the Expiration Time multiplied by the average daily
Current Market Price for the 15 consecutive Trading Days of the Common Stock
next succeeding the Expiration Time and of which the denominator shall be the
sum of (i) 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 or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares") and (ii) the product of the number of shares of Common
Stock outstanding (less any Purchased Shares) at the Expiration Time and the
Current Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, such reduction to become retroactively effective immediately
prior to the opening of business on the day following the Expiration Time;
provided, however, that the reduction of the Conversion Price contemplated by
this subsection (f) will only be made if the tender offer or exchange offer is
made for an amount which increases that Person's ownership of Common Stock to
more than 10% of the total shares of Common Stock outstanding and provided,
further, that the reduction of the Conversion Price contemplated by this
subsection (f) will not be made if as of the close of the offer, the offering
documents with respect to such offer disclose a plan or an intention to cause
the Company to engage in a consolidation or merger of the Company or a sale of
all or substantially all of the assets of the Company.
(g) For the purpose of any computation under subsections (b), (c) or (d),
the current market price per share of Common Stock on any date in question
shall be deemed to be the Current Market Price for the earlier of the day in
question and, if applicable, the day before the "ex" date with respect to the
issuance or distribution requiring such computation; provided, however, that if
more than one event occurs that would require an adjustment pursuant to
subsections (a) through (f), inclusive, the Board of Directors may make such
adjustments to the Current Market Prices during such 15 Trading Day
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period as it deems appropriate to effectuate the intent of the adjustments in
this Section 15.3, in which case any such determination by the Board of
Directors shall be set forth in a Board Resolution and shall be conclusive.
For purposes of this paragraph, the term "ex" date, (1) when used with respect
to any issuance or distribution, means the first date on which the Common Stock
trades regular way on the New York Stock Exchange or on such successor
securities exchange as the Common Stock may be listed or in the relevant market
from which the Current Market Prices were obtained without the right to receive
such issuance or distribution, and (2) when used with respect to any tender or
exchange offer, means the first date on which the Common Stock trades regular
way on such securities exchange or in such market after the Expiration Time of
such offer.
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by subsections (a) through (f), as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes. The Company from time to time
may elect to reduce the Conversion Price by any amount for any period of time
if the period is at least 20 days, the reduction is irrevocable during the
period, and the Board of Directors shall have made a determination that such
reduction would be in the best interest of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to Holders of record of the
Debentures a notice of the reduction at least 15 days prior to the date the
reduced Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period it will be in effect.
(i) 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 subsection (i) are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall be
required.
(j) If any action would require adjustment of the Conversion Price
pursuant to more than one of the provisions described above, only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value to the Holder of Debentures.
SECTION 15.4 MERGER, CONSOLIDATION, OR SALE OF ASSETS.
(a) In the event that the Company shall be a party to any transaction,
(including without limitation (i) any recapitalization or reclassification of
the Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (ii) 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 a
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), (iii) any sale or transfer of all or
substantially all of the assets of the Company or (iv) any compulsory share
exchange), pursuant to which either shares of Common Stock shall be converted
into the right to receive other securities, cash or other property, or, in the
case of a sale or transfer of all or substantially all of the assets of the
Company, the holders of Common Stock shall be entitled to receive other
securities, cash or other property, then lawful provision shall be made as part
of the terms of such transaction whereby the Holder of each Debenture then
outstanding shall have the right thereafter to convert such Debenture only into
the kind and amount of the securities, cash or other property that would have
been receivable upon such recapitalization, reclassification, consolidation,
merger, sale, transfer or share exchange by a holder of the number of shares of
Common Stock issuable upon conversion of such Debenture immediately prior to
such
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recapitalization, reclassification, consolidation, merger, sale, transfer
or share exchange, subject to funds being legally available for such purpose
under applicable law at the time of such conversion.
(b) The company or the Person formed by such consolidation or resulting
from such merger or which acquired such assets or which acquires the Company's
shares, as the case may be, shall make provision in its certificate or articles
of incorporation or other constituent document to establish such right. Such
certificate or articles of incorporation or other constituent document shall
provide for adjustments which, for events subsequent to the effective date of
such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article XV. The above provisions shall similarly apply to
successive transactions of the foregoing type.
SECTION 15.5 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price and shall
prepare a certificate signed by the Chief Financial Officer or 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 the Trustee and the transfer agent
for the Debentures; and
(b) a notice stating the Conversion Price has been adjusted and setting
forth the adjusted Conversion Price shall as soon as practicable be mailed by
the Company to all record holders of Debentures at their last addresses as they
appear upon the transfer books of the Debenture Registrar or the Company.
SECTION 15.6 PRIOR NOTICE OF CERTAIN EVENTS.
In case:
(a) the Company shall (i) declare any dividend (or any other distribution)
on its Common Stock, other than (A) a dividend payable in shares of Common
Stock or (B) a dividend payable in cash that would not require an adjustment
pursuant to Section 15.3(c) or (d) or (ii) authorize a tender or exchange offer
that would require an adjustment pursuant to Section 15.3(e);
(b) the Company shall authorize the granting to all holders of Common
Stock of rights or warrants to subscribe for or purchase any shares of stock of
any class or series or of any other rights or warrants;
(c) of any reclassification of Common Stock (other than a subdivision or
combination of the outstanding Common Stock, or a change in par value, or from
par value to no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which approval
of any stockholders of the Company shall be required, or of the sale or
transfer of all or substantially all of the assets of the Company or of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or other property; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company; then the Company shall cause to be filed with the Trustee and
mailed to all Holders at their last addresses as they shall appear in the
Debenture Register, at least 15 days prior to the applicable
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record or effective date hereinafter specified, a notice stating (A) the date
on which a record (if any) is to be taken for the purpose of such dividend,
distribution, rights or warrants 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 or warrants are to be determined or (B) the date
on which such reclassification, consolidation, merger, sale, transfer, share
exchange, 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, share exchange, dissolution, liquidation
or winding up (but no failure to mail such notice or any defect therein or in
the mailing thereof shall affect the validity of the corporate action required
to be specified in such notice).
SECTION 15.7 DIVIDEND OR INTEREST REINVESTMENT PLANS.
Notwithstanding the foregoing provisions, the issuance of any shares of
Common Stock pursuant to any plan providing for the reinvestment of dividends
or interest payable on securities of the Company and the investment of
additional optional amounts in shares of Common Stock under any such plan, and
the issuance of any shares of Common Stock or options or rights to purchase
such shares pursuant to any employee benefit plan or program of the Company or
pursuant to any option, warrant or right exercisable, exchangeable or
convertible security outstanding as of the date hereof, shall not be deemed to
constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies. There shall also be no adjustment of the Conversion
Price in case of the issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company except as specifically described in this
Article XV.
SECTION 15.8 CERTAIN ADDITIONAL RIGHTS.
In case the Company shall, by dividend or otherwise, declare or make a
distribution on the Common Stock referred to in Section 15.3 (c) or 15.3(d)
(including, without limitation, dividends or distributions referred to in the
last sentence of Section 15.3(d)), the Holder of Debentures, 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, shall also be entitled to receive for each share of Common
Stock into which Debentures are converted, the portion of the shares of Common
Stock, rights, warrants, evidences of indebtedness, shares of capital stock,
cash and assets so distributed applicable to one share of Common Stock;
provided, however, that, at the election of the Company (whose election shall
be evidenced by a resolution of the Board of Directors) 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 in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors). If any conversion of Debentures described in the immediately
preceding sentence occurs prior to the payment date for a distribution to
holders of Common Stock which the Holder of Debentures 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 shares of Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash or assets to which
such Holder is so entitled, provided, that such due bill (a) meets any
applicable requirements of the principal national securities exchange or other
market on which the Common Stock is then traded and (b) requires payment or
delivery of such shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital
59
<PAGE> 59
stock, cash or assets no later than the date of payment or delivery thereof to
holders of shares of Common Stock receiving such distribution.
SECTION 15.9 RESERVATION OF SHARES OF COMMON STOCK.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock or treasury
shares, for the purpose of effecting the conversion of Debentures, the full
number of shares of Common Stock then issuable upon the conversion of all
outstanding Debentures.
SECTION 15.10 PAYMENT OF CERTAIN TAXES UPON CONVERSION.
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 Debentures
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 Debenture or Debentures to be converted, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to the
Company the amount of any such tax, or has established, to the satisfaction of
the Company, that such tax has been paid.
SECTION 15.11 NONASSESSABILITY.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Debentures will upon issue in accordance with the terms
hereof be duly and validly issued and fully paid and nonassessable.
SECTION 15.12 DUTIES OF TRUSTEE REGARDING CONVERSION.
The Trustee shall not, at any time, be under any duty or responsibility to
any Holder of Debentures that is convertible into Common Stock to determine
whether any facts exist which may require any adjustment of the Conversion
Price, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed, whether herein or in any
supplemental indenture (or whether a supplemental indenture need be entered
into), any resolutions of the Board of Directors or written instrument executed
by one or more officers of the Company provided to be employed in making the
same. The Trustee shall not be accountable with respect to the validity or
value (or the kind or amount) of any shares of Common Stock, or of any
securities or property, which may at any time be issued or delivered upon the
conversion of any Debentures and the Trustee makes no representation with
respect thereto. The Trustee shall not be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock or stock
certificates or other securities or property upon the surrender of any
Debenture for the purpose of conversion or to comply with any of the covenants
of the Company contained in this Article XV or in the applicable supplemental
indenture, resolutions of the Board of Directors or written instrument executed
by one or more duly authorized officers of the Company. All Debentures
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 2.9.
59
<PAGE> 60
SECTION 15.13 REPAYMENT OF CERTAIN FUNDS UPON CONVERSION.
Any funds which at any time shall have been deposited by the Company or on
its behalf with the Trustee or any other paying agent for the purpose of paying
the principal of and interest, if any, on any of the Debentures and which shall
not be required for such purposes because of the conversion of such Debentures
as provided in this Article XV shall after such conversion be repaid to the
Company by the Trustee upon the Company's written request.
SECTION 15.14 RESTRICTIONS ON COMMON STOCK ISSUABLE UPON CONVERSION.
(a) Shares of Common Stock to be issued upon conversion of a Debenture in
respect of Restricted Preferred Securities (as defined in the Declaration)
shall bear such restrictive legends as the Company may provide in accordance
with applicable law. The Trustee shall have no responsibility for the
inclusion or content of any such restrictive legend on such Common Stock.
(b) If shares of Common Stock to be issued upon conversion of a Debenture
are to be registered in a name other than that of the Holder of such Debenture,
then the Person in whose name such shares of Common Stock are to be registered
must deliver to the Trustee a certificate satisfactory to the Company and
signed by such Person, as to compliance with the restrictions on transfer
applicable to such Debenture. Neither the Trustee nor any Registrar shall be
required to register in a name other than that of the Holder shares of Common
Stock issued upon conversion of any such Debenture not so accompanied by a
properly completed certificate.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
SECTION 16.1 COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Indenture, 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 by or on behalf of the Company with
respect to compliance with a condition or covenant provided for in this
Indenture, except for certificates provided for in Section 5.5, 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, the
individual has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
60
<PAGE> 61
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 16.2 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.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's 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 16.3 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 Trustee Administration, 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 Indenture, to the attention of its Treasurer, or
at any other address previously furnished in writing to the Trustee by
the Company.
SECTION 16.4 NOTICE TO HOLDERS OF DEBENTURES; WAIVER.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Debentures of any event, such notice shall be
sufficiently given to Holders of Debentures if in writing and mailed,
first-class postage prepaid, to each Holder of a Debenture affected by such
event, at the address of such Holder as it appears in the Debenture Register,
not earlier than the earliest date, and not later than the latest date,
prescribed for the giving of such notice.
61
<PAGE> 62
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 to Holders of
Debentures by mail, then such notification as shall be made with the approval
of the Trustee shall constitute sufficient notice to such Holders for every
purpose hereunder. In any case where notice to Holders of Debentures is given
by mail, neither the failure to mail such notice, nor any defect in any notice
mailed to any particular Holder of a Debenture shall affect the sufficiency of
such notice with respect to other Holders of Debentures.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders of Debentures shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 16.5 LANGUAGE OF NOTICES, ETC.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
SECTION 16.6 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 16.7 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 16.8 SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Debentures 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 16.9 BENEFITS OF INDENTURE.
Nothing in this Indenture or the Debentures, express or implied, shall
give to any Person, other than the parties hereto, any Authenticating Agent,
any Paying Agent, any Debentures Registrar and their successors hereunder and
the Holders of Debentures, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 16.10 GOVERNING LAW.
This Indenture and the Debentures shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of laws principles thereof.
62
<PAGE> 63
SECTION 16.11 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date, Maturity or
Stated Maturity of a Debenture shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Debentures other than a provision in Debentures which specifically states that
such provision shall apply in lieu of this Section) payment of interest or
principal need not be made at such Place of Payment on such date, but may be
made on the next succeeding Business Day at such Place of Payment with the same
force and effect as if made on the Interest Payment Date or Redemption Date, or
at the Stated Maturity, provided that no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be, to such succeeding Business Day.
SECTION 16.12 EXECUTION IN COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
63
<PAGE> 64
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
WABASH NATIONAL CORPORATION
By
--------------------------------
Name:
Title
[TRUSTEE]
By
--------------------------------
Name:
Title:
64
<PAGE> 65
EXHIBIT A
===================================================
WABASH NATIONAL CORPORATION
as Issuer
TO
________________________________________
as Trustee
INDENTURE
dated as of _______________, 1997
6% Convertible Subordinated Debentures
Due April 15, 2007
===================================================
<PAGE> 66
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS....................................................... 1
SECTION 1.1 Definitions.................................................... 1
ARTICLE II ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF
NOTES........................................................................ 8
SECTION 2.1 Designation and Principal Amount............................... 8
SECTION 2.2 Form of Debentures; Initial Issuance to Property Trustee....... 8
SECTION 2.3 Denomination of Debentures; Payment of Interest................ 9
SECTION 2.4 Execution, Authentication, Delivery and Dating.................11
SECTION 2.5 Registration, Registration of Transfer and Exchange............11
SECTION 2.6 Mutilated, Destroyed, Lost and Stolen Debentures...............13
SECTION 2.7 Temporary Debentures...........................................13
SECTION 2.8 Persons Deemed Owners..........................................14
SECTION 2.9 Cancellation...................................................14
ARTICLE III REDEMPTION OF DEBENTURES........................................14
SECTION 3.1 Optional Redemption by Company.................................14
SECTION 3.2 Applicability of Article.......................................15
SECTION 3.3 No Sinking Fund................................................15
SECTION 3.4 Election to Redeem; Notice to Trustee..........................15
SECTION 3.5 Selection by Trustee of Debentures to Be Redeemed..............15
SECTION 3.6 Notice of Redemption...........................................16
SECTION 3.7 Deposit of Redemption Price....................................17
SECTION 3.8 Debentures Payable on Redemption Date..........................17
SECTION 3.9 Debentures Redeemed in Part....................................17
ARTICLE IV SUBORDINATION OF DEBENTURES......................................17
SECTION 4.1 Debentures Subordinate to Senior Indebtedness..................17
SECTION 4.2 Payment Over of Proceeds Upon Dissolution, Etc.................17
SECTION 4.3 Prior Payment to Senior Indebtedness Upon Acceleration of
Debentures.....................................................19
SECTION 4.4 No Payment When Senior Indebtedness in Default.................19
SECTION 4.5 Payment Permitted in Certain Situations........................19
SECTION 4.6 Subrogation to Rights of Holders of Senior Indebtedness........20
SECTION 4.7 Provisions Solely to Define Relative Rights....................20
SECTION 4.8 Trustee to Effectuate Subordination............................20
SECTION 4.9 No Waiver of Subordination Provisions..........................21
SECTION 4.10 Notice to Trustee.............................................21
SECTION 4.11 Reliance on Judicial Order or Certificate of Liquidating
Agent.........................................................22
SECTION 4.12 Trustee Not Fiduciary for Holders of Senior
Indebtedness..................................................22
SECTION 4.13 Rights of Trustee as Holder of Senior Indebtedness,
Preservation of Trustee's Rights..............................22
SECTION 4.14 Article Applicable to Paying Agents...........................22
SECTION 4.15 Certain Conversions Deemed Payment............................22
ARTICLE V CERTAIN COVENANTS.................................................23
SECTION 5.1 Payment of Principal, Premium and Interest.....................23
SECTION 5.2 Maintenance of Office or Agency................................23
SECTION 5.3 Money for Debentures Payments to Be Held in Trust..............23
SECTION 5.4 Existence......................................................24
i
<PAGE> 67
SECTION 5.5 Statement by Officers as to Default............................25
SECTION 5.6 Limitation on Dividends and Other Payments.....................25
SECTION 5.7 Registration Rights............................................25
ARTICLE VI HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY................26
SECTION 6.1 Company to Furnish Trustee Names and Addresses of
Holders........................................................26
SECTION 6.2 Preservation of Information; Communications to
Holders........................................................26
SECTION 6.3 Reports by Trustee.............................................28
SECTION 6.4 Reports by Company.............................................28
ARTICLE VII DEFAULTS AND REMEDIES...........................................28
SECTION 7.1 Events of Default..............................................28
SECTION 7.2 Acceleration of Maturity; Rescission and
Annulment......................................................29
SECTION 7.3 Collection of Indebtedness and Suits for
Enforcement by Trustee.........................................30
SECTION 7.4 Trustee May File Proofs of Claim...............................31
SECTION 7.5 Trustee May Enforce Claims Without
Possession of Debentures.......................................32
SECTION 7.6 Application of Money Collected.................................32
SECTION 7.7 Limitation on Suits............................................32
SECTION 7.8 Unconditional Right of Holders to Receive
Principal and Interest and to Convert..........................33
SECTION 7.9 Restoration of Rights and Remedies.............................33
SECTION 7.10 Rights and Remedies Cumulative................................33
SECTION 7.11 Delay or Omission Not Waiver..................................33
SECTION 7.12 Control by Holders of Debentures..............................34
SECTION 7.13 Waiver of Past Defaults.......................................34
SECTION 7.14 Undertaking for Costs.........................................34
SECTION 7.15 Waiver of Stay or Extension Laws..............................35
ARTICLE VIII CONCERNING THE TRUSTEE.........................................35
SECTION 8.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default...............................35
SECTION 8.2 Certain Rights of Trustee......................................36
SECTION 8.3 Not Responsible for Recitals or Issuance
of Debentures..................................................37
SECTION 8.4 May Hold Debentures............................................37
SECTION 8.5 Money Held in Trust............................................37
SECTION 8.6 Compensation and Reimbursement.................................38
SECTION 8.7 Resignation and Removal; Appointment
of Successor...................................................39
SECTION 8.8 Acceptance of Appointment by Successor.........................40
SECTION 8.9 Disqualification; Conflicting Interests........................40
SECTION 8.10 Corporate Trustee Required; Eligibility.......................40
SECTION 8.11 Preferential Collection of Claims
Against Company...............................................40
SECTION 8.12 Merger, Conversion, Consolidation or
Succession to Business........................................40
SECTION 8.13 Appointment of Authenticating Agent...........................40
SECTION 8.14. Notice of Defaults...........................................42
ARTICLE IX ACTS OF HOLDERS..................................................42
SECTION 9.1 Acts of Holders................................................42
ARTICLE X MEETINGS OF HOLDERS OF DEBENTURES.................................43
SECTION 10.1 Purposes for Which Meetings May be Called.....................43
SECTION 10.2 Call, Notice and Place of Meetings............................44
SECTION 10.3 Persons Entitled to Vote at Meetings..........................44
SECTION 10.4 Quorum; Action................................................44
ii
<PAGE> 68
SECTION 10.5 Determination of Voting Rights; Conduct
and Adjournment of Meetings...................................45
SECTION 10.6 Counting Votes and Recording Action of Meetings...............46
ARTICLE XI SUPPLEMENTAL INDENTURES..........................................46
SECTION 11.1 Supplemental Indentures Without Consent of Holders............46
SECTION 11.2 Supplemental Indentures With Consent of Holders...............47
SECTION 11.3 Execution of Supplemental Indentures..........................48
SECTION 11.4 Effect of Supplemental Indentures.............................48
SECTION 11.5 Reference in Debentures to Supplemental Indentures............48
ARTICLE XII CONSOLIDATION, MERGER, SALE OR CONVEYANCE.......................48
SECTION 12.1 Company May Consolidate, Etc. on Certain Terms................48
SECTION 12.2 Successor Corporation Substituted.............................49
SECTION 12.3 Opinion of Counsel to Trustee.................................49
ARTICLE XIII SATISFACTION AND DISCHARGE.....................................49
SECTION 13.1 Satisfaction and Discharge of Indenture.......................49
SECTION 13.2 Application of Trust Money....................................50
ARTICLE XIV IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS, DIRECTORS AND
EMPLOYEES....................................................................51
ARTICLE XV CONVERSION OF CONVERTIBLE DEBENTURES...........................51
SECTION 15.1 Conversion Rights...........................................51
SECTION 15.2 Conversion Procedures.......................................52
SECTION 15.3 Conversion Price Adjustments................................53
SECTION 15.4 Merger, Consolidation, or Sale of Assets....................56
SECTION 15.5 Notice of Adjustments of Conversion Price...................57
SECTION 15.6 Prior Notice of Certain Events..............................57
SECTION 15.7 Dividend or Interest Reinvestment Plans.....................58
SECTION 15.8 Certain Additional Rights...................................58
SECTION 15.9 Reservation of Shares of Common Stock.......................59
SECTION 15.10 Payment of Certain Taxes upon Conversion...................59
SECTION 15.11 Nonassessability...........................................59
SECTION 15.12 Duties of Trustee Regarding Conversion.....................59
SECTION 15.13 Repayment of Certain Funds upon Conversion.................60
SECTION 15.14 Restrictions on Common Stock Issuable Upon Conversion......60
ARTICLE XVI MISCELLANEOUS PROVISIONS......................................60
SECTION 16.1 Compliance Certificates and Opinions........................60
SECTION 16.2 Form of Documents Delivered to Trustee......................61
SECTION 16.3 Notices, Etc., to Trustee and Company.......................61
SECTION 16.4 Notice to Holders of Debentures; Waiver.....................61
SECTION 16.5 Language of Notices, Etc....................................62
SECTION 16.6 Effect of Headings and Table of Contents....................62
SECTION 16.7 Successors and Assigns......................................62
SECTION 16.8 Separability Clause.........................................62
SECTION 16.9 Benefits of Indenture.......................................62
SECTION 16.10 Governing Law..............................................62
SECTION 16.11 Legal Holidays.............................................63
iii
<PAGE> 69
SECTION 16.12 Execution in Counterparts..................................63
Exhibit A: Form of Debenture
iv
<PAGE> 1
EXHIBIT 15.01
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Wabash National Corporation:
We have reviewed the condensed consolidated balance sheets of WABASH NATIONAL
CORPORATION (a Delaware corporation) and subsidiaries as of March 31, 1997, and
the related condensed consolidated statements of income for the three-month
period ended March 31, 1997 and 1996, and the condensed consolidated statements
of cash flows for the three-month period ended March 31, 1997 and 1996. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquires of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Wabash National Corporation and
subsidiaries as of December 31, 1996 (not presented herein) and, in our report
dated January 17, 1997, we expressed an unqualified opinion on that statement.
In our opinion, the information set forth in the condensed consolidated balance
sheet of Wabash National Corporation and subsidiaries as of December 31, 1996
is fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Indianapolis, Indiana,
April 18, 1997
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 8,726
<SECURITIES> 0
<RECEIVABLES> 90,005
<ALLOWANCES> 0
<INVENTORY> 153,694
<CURRENT-ASSETS> 273,444
<PP&E> 83,980
<DEPRECIATION> 0
<TOTAL-ASSETS> 491,588
<CURRENT-LIABILITIES> 92,828
<BONDS> 195,477
0
0
<COMMON> 189
<OTHER-SE> 491,399
<TOTAL-LIABILITY-AND-EQUITY> 491,588
<SALES> 135,087
<TOTAL-REVENUES> 135,087
<CGS> 127,054
<TOTAL-COSTS> 127,054
<OTHER-EXPENSES> 3,290
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<INTEREST-EXPENSE> 3,369
<INCOME-PRETAX> 1,465
<INCOME-TAX> 596
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