<PAGE>
EXHIBIT 4.1
KOHL'S CORPORATION
Liquid Yield Option(TM) Notes
due 2020
(Zero Coupon-Subordinated)
__________________________________________________________
INDENTURE
Dated as of June 12, 2000
__________________________________________________________
THE BANK OF NEW YORK
TRUSTEE
__________________________________________________________
(TM)Trademark of Merrill Lynch & Co., Inc.
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CROSS REFERENCE TABLE*
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<CAPTION>
IA Section Indenture Section
<S> <C>
310(a)(1).............................................. 7.10
(a)(2).............................................. 7.10
(a)(3).............................................. N.A.
(a)(4).............................................. N.A.
(b)................................................. 7.08; 7.10
(c)................................................. N.A.
311(a)................................................. 7.11
(b)................................................. 7.11
(c)................................................. N.A.
312(a)................................................. 2.05
(b)................................................. 13.03
(c)................................................. 13.03
313(a)................................................. 7.06
(b)(1).............................................. N.A.
(b)(2).............................................. 7.06
(c)................................................. 13.02
(d)................................................. 7.06
314(a)................................................. 4.03; 13.02
(b)................................................. N.A.
(c)(1).............................................. 13.04
(c)(2).............................................. 13.04
(c)(3).............................................. N.A.
(d)................................................. N.A.
(e)................................................. 13.05
(f)................................................. N.A.
315(a)................................................. 7.01
(b)................................................. 7.05; 13.02
(c)................................................. 7.01
(d)................................................. 7.01
(e)................................................. 6.11
316(a)(last sentence).................................. 2.08
(a)(1)(A)........................................... 6.05
(a)(1)(B)........................................... 6.04
(a)(2).............................................. N.A.
(b)................................................. 6.07
317(a)(1).............................................. 6.08
(a)(2).............................................. 6.09
(b)................................................. 2.04
318(a)................................................. 13.01
</TABLE>
N.A. means Not Applicable.
__________________________
* Note: This Cross Reference Table shall not, for any purpose deemed to be
part of the Indenture
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TABLE OF CONTENTS*
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Page
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions................................................................... 1
SECTION 1.02 Other Definitions............................................................. 5
SECTION 1.03 Incorporation by Reference of Trust Indenture Act............................. 6
SECTION 1.04 Rules of Construction......................................................... 7
SECTION 1.05 Acts of Holders............................................................... 7
ARTICLE 2 THE SECURITIES
SECTION 2.01 Form and Dating............................................................... 8
SECTION 2.02 Execution and Authentication.................................................. 10
SECTION 2.03 Registrar, Paying Agent and Conversion Agent.................................. 10
SECTION 2.04 Paying Agent to Hold Money and Securities in Trust............................ 11
SECTION 2.05 Securityholder Lists.......................................................... 11
SECTION 2.06 Transfer and Exchange......................................................... 11
SECTION 2.07 Replacement Securities........................................................ 13
SECTION 2.08 Outstanding Securities; Determinations of Holders' Action..................... 13
SECTION 2.09 Temporary Securities.......................................................... 14
SECTION 2.10 Cancellation.................................................................. 15
SECTION 2.11 Persons Deemed Owners......................................................... 15
SECTION 2.12 Global Securities............................................................. 15
SECTION 2.13 CUSIP Numbers................................................................. 20
ARTICLE 3 REDEMPTION AND PURCHASES
SECTION 3.01 Right to Redeem; Notices to Trustee........................................... 20
SECTION 3.02 Selection of Securities to Be Redeemed........................................ 20
SECTION 3.03 Notice of Redemption.......................................................... 21
SECTION 3.04 Effect of Notice of Redemption................................................ 22
SECTION 3.05 Deposit of Redemption Price................................................... 22
SECTION 3.06 Securities Redeemed in Part................................................... 22
SECTION 3.07 Conversion Arrangement on Call for Redemption................................. 22
SECTION 3.08 Purchase of Securities at Option of the Holder................................ 23
SECTION 3.09 Purchase of Securities at Option of the Holder upon Change in Control......... 29
SECTION 3.10 Effect of Purchase Notice or Change in Control Purchase Notice................ 32
SECTION 3.11 Deposit of Purchase Price or Change in Control Purchase Price................. 33
SECTION 3.12 Securities Purchased in Part.................................................. 33
SECTION 3.13 Covenant to Comply With Securities Laws Upon Purchase of Securities........... 33
SECTION 3.14 Repayment to the Company...................................................... 33
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____________________________
* Note: This Table of Contents shall not, for any purpose, be deemed to be
part of the Indenture.
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ARTICLE 4 COVENANTS
SECTION 4.01 Payment of Securities...................................... 34
SECTION 4.02 SEC and Other Reports...................................... 34
SECTION 4.03 Compliance Certificate..................................... 35
SECTION 4.04 Further Instruments and Acts............................... 35
SECTION 4.05 Maintenance of Office or Agency............................ 35
SECTION 4.06 Delivery of Certain Information............................ 35
SECTION 4.07 Calculation of Original Issue Discount..................... 35
ARTICLE 5 SUCCESSOR CORPORATION
SECTION 5.01 When Company May Merge or Transfer Assets.................. 36
ARTICLE 6 DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.......................................... 37
SECTION 6.02 Acceleration............................................... 39
SECTION 6.03 Other Remedies............................................. 39
SECTION 6.04 Waiver of Past Defaults.................................... 39
SECTION 6.05 Control by Majority........................................ 39
SECTION 6.06 Limitation on Suits........................................ 39
SECTION 6.07 Rights of Holders to Receive Payment....................... 40
SECTION 6.08 Collection Suit by Trustee................................. 40
SECTION 6.09 Trustee May File Proofs of Claim........................... 40
SECTION 6.10 Priorities................................................. 41
SECTION 6.11 Undertaking for Costs...................................... 41
SECTION 6.12 Waiver of Stay, Extension or Usury Laws.................... 42
ARTICLE 7 TRUSTEE
SECTION 7.01 Duties of Trustee.......................................... 42
SECTION 7.02 Rights of Trustee.......................................... 43
SECTION 7.03 Individual Rights of Trustee............................... 44
SECTION 7.04 Trustee's Disclaimer....................................... 45
SECTION 7.05 Notice of Defaults......................................... 45
SECTION 7.06 Reports by Trustee to Holders.............................. 45
SECTION 7.07 Compensation and Indemnity................................. 45
SECTION 7.08 Replacement of Trustee..................................... 46
SECTION 7.09 Successor Trustee by Merger................................ 47
SECTION 7.10 Eligibility; Disqualification.............................. 47
SECTION 7.11 Preferential Collection of Claims Against Company.......... 47
ARTICLE 8 DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Liability on Securities....................... 48
SECTION 8.02 Repayment to the Company................................... 48
ARTICLE 9 AMENDMENTS
SECTION 9.01 Without Consent of Holders................................. 48
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<TABLE>
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SECTION 9.02 With Consent of Holders..................................................... 49
SECTION 9.03 Compliance with Trust Indenture Act......................................... 49
SECTION 9.04 Revocation and Effect of Consents, Waivers and Actions...................... 50
SECTION 9.05 Notation on or Exchange of Securities....................................... 50
SECTION 9.06 Trustee to Sign Supplemental Indentures..................................... 50
SECTION 9.07 Effect of Supplemental Indentures........................................... 50
ARTICLE 10 SPECIAL TAX EVENT CONVERSION
SECTION 10.01 Optional Conversion to Semiannual Coupon Note Upon Tax Event ............... 51
SECTION 10.02 Payment of Interest; Interest Rights Preserved.............................. 51
ARTICLE 11 CONVERSION
SECTION 11.01 Conversion Privilege........................................................ 53
SECTION 11.02 Conversion Procedure........................................................ 54
SECTION 11.03 Fractional Shares........................................................... 55
SECTION 11.04 Taxes on Conversion......................................................... 55
SECTION 11.05 Company to Provide Stock.................................................... 55
SECTION 11.06 Adjustment for Change In Capital Stock...................................... 56
SECTION 11.07 Adjustment for Rights Issue................................................. 56
SECTION 11.08 Adjustment for Other Distributions.......................................... 57
SECTION 11.09 When Adjustment May Be Deferred............................................. 59
SECTION 11.10 When No Adjustment Required................................................. 59
SECTION 11.11 Notice of Adjustment........................................................ 60
SECTION 11.12 Voluntary Increase.......................................................... 60
SECTION 11.13 Notice of Certain Transactions.............................................. 60
SECTION 11.14 Reorganization of Company; Special Distributions............................ 60
SECTION 11.15 Company Determination Final................................................. 61
SECTION 11.16 Trustee's Adjustment Disclaimer............................................. 61
SECTION 11.17 Simultaneous Adjustments.................................................... 61
SECTION 11.18 Successive Adjustments...................................................... 61
SECTION 11.19 Rights Issued in Respect of Common Stock Issued Upon Conversion............. 62
ARTICLE 12 SUBORDINATION
SECTION 12.01 Securities Subordinate to Senior Indebtedness............................... 62
SECTION 12.02 Payment over of Proceeds upon Dissolution, Etc.............................. 62
SECTION 12.03 Acceleration of Securities.................................................. 64
SECTION 12.04 Default on Senior Indebtedness.............................................. 64
SECTION 12.05 Payment Permitted If No Default............................................. 65
SECTION 12.06 Subrogation to Rights of Holders of Senior Indebtedness..................... 65
SECTION 12.07 Provisions Solely to Define Relative Rights................................. 66
SECTION 12.08 Trustee to Effectuate Subordination......................................... 66
SECTION 12.09 No Waiver of Subordination Provisions....................................... 66
SECTION 12.10 Notice to Trustee........................................................... 67
SECTION 12.11 Reliance on Judicial Order or Certificate of Liquidating Agent.............. 67
SECTION 12.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.................... 67
SECTION 12.13 Rights of Trustee as Holder of Senior Indebtedness;
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Preservation of Trustee's Rights.......................................... 68
SECTION 12.14 Article 12 Applicable to Paying Agents.................................... 68
ARTICLE 13 MISCELLANEOUS
SECTION 13.01 Trust Indenture Act Controls.............................................. 68
SECTION 13.02 Notices................................................................... 68
SECTION 13.03 Communication by Holders with Other Holders............................... 69
SECTION 13.04 Certificate and Opinion as to Conditions Precedent........................ 69
SECTION 13.05 Statements Required in Certificate or Opinion............................. 70
SECTION 13.06 Separability Clause....................................................... 70
SECTION 13.07 Rules by Trustee, Paying Agent, Conversion Agent and Registrar............ 70
SECTION 13.08 Legal Holidays............................................................ 70
SECTION 13.09 GOVERNING LAW............................................................. 70
SECTION 13.10 No Recourse Against Others................................................ 70
SECTION 13.11 Successors................................................................ 70
SECTION 13.12 Multiple Originals........................................................ 71
</TABLE>
iv
<PAGE>
INDENTURE dated as of June 12, 2000 between KOHL'S CORPORATION, a
Wisconsin corporation ("Company"), and THE BANK OF NEW YORK, a New York banking
corporation ("Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's Liquid Yield
Option(TM) Notes due 2020 (Zero Coupon - Subordinated) ("Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
-------------------------------
"144A Global Security" means a permanent Global Security in the form
--------------------
of the Security attached hereto as Exhibit A-1, and that is deposited with and
registered in the name of the Depositary, representing Securities sold in
reliance on Rule 144A under the Securities Act.
"Affiliate" of any specified person means any other person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Applicable Procedures" means, with respect to any transfer or
---------------------
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Board of Directors" means either the board of directors of the
------------------
Company or any duly authorized committee of such board.
"Business Day" means each day of the year other than a Saturday or a
------------
Sunday on which banking institutions are not required or authorized to close in
the City of New York or Milwaukee, Wisconsin.
"Capital Stock" for any corporation means any and all shares,
-------------
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that
corporation.
"Certificated Securities" means Securities that are in the form of the
-----------------------
Securities attached hereto as Exhibit A-2.
<PAGE>
"Common Stock" shall mean the shares of Common Stock, $0.01 par value,
------------
of the Company as it exists on the date of this Indenture or any other shares of
Capital Stock of the Company into which the Common Stock shall be reclassified
or changed.
"Company" means the party named as the "Company" in the first
-------
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"Company Request" or "Company Order" means a written request or order
--------------- -------------
signed in the name of the Company by any two Officers.
"Corporate Trust Office" means the principal office of the Trustee at
----------------------
which at any time its corporate trust business shall be administered, which
office at the date hereof is located at 101 Barclay Street, Floor 21 West, New
York, New York 10286, Attention: Corporate Trust Administration, or such other
address as the Trustee may designate from time to time by notice to the Holders
and the Company, or the principal corporate trust office of any successor
Trustee (or such other address as a successor Trustee may designate from time to
time by notice to the Holders and the Company).
"Debt" means with respect to the Company at any date, without
----
duplication, obligations (other than nonrecourse obligations) for borrowed money
or evidenced by bonds, debentures, notes or similar instruments.
"Default" means any event which is, or after notice or passage of time
-------
or both would be, an Event of Default.
"Global Securities" means Securities that are in the form of the
-----------------
Securities attached hereto as Exhibit A-1, and to the extent that such
Securities are required to bear the Legend required by Section 2.06, such
Securities will be in the form of a 144A Global Security.
"Holder" or "Securityholder" means a person in whose name a Security
------ --------------
is registered on the Registrar's books.
"Indenture" means this Indenture, as amended or supplemented from time
---------
to time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"Institutional Accredited Investor Security" means a Security in the
------------------------------------------
form of the Security attached hereto as Exhibit A-2, representing Securities
sold to institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3) and (7) under the Securities Act).
"Issue Date" of any Security means the date on which the Security was
----------
originally issued or deemed issued as set forth on the face of the Security.
"Issue Price" of any Security means, in connection with the original
-----------
issuance of such Security, the initial issue price at which the Security is sold
as set forth on the face of the Security.
2
<PAGE>
"Officer" means the Chairman of the Board, the Vice Chairman, the
-------
Chief Executive Officer, the President, any Executive Vice President, any Senior
Vice President, any Vice President, the Treasurer or the Secretary or any
Assistant Treasurer or Assistant Secretary of the Company.
"Officers' Certificate" means a written certificate containing the
---------------------
information specified in Sections 13.04 and 13.05, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.03 shall be signed by an authorized
financial or accounting Officer of the Company but need not contain the
information specified in Sections 13.04 and 13.05.
"Opinion of Counsel" means a written opinion containing the
------------------
information specified in Sections 13.04 and 13.05, from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.
"Original Issue Discount" of any Security means the difference between
-----------------------
the Issue Price and the Principal Amount at Maturity of the Security as set
forth on the face of the Security.
"person" means any individual, corporation, limited liability company,
------
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Principal Amount at Maturity" of a Security means the Principal
----------------------------
Amount at Maturity as set forth on the face of the Security.
"Redemption Date" or "redemption date" shall mean the date specified
--------------- ---------------
for redemption of the Securities in accordance with the terms of the Securities
and this Indenture.
"Redemption Price" or "redemption price" shall have the meaning set
---------------- ----------------
forth in paragraph 5 of the Securities.
"Responsible Officer" shall mean, when used with respect to the
-------------------
Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.
"Restricted Security" means a Security required to bear the
-------------------
restrictive legend set forth in the form of Security set forth in Exhibits A-1
and A-2 of this Indenture.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
---------
provision), as it may be amended from time to time.
"SEC" means the Securities and Exchange Commission.
---
3
<PAGE>
"Securities" means any of the Company's Liquid Yield Option Notes due
----------
2020 (Zero Coupon-Subordinated), as amended or supplemented from time to time,
issued under this Indenture.
"Securityholder" or "Holder" means a person in whose name a Security
-------------- ------
is registered on the Registrar's books.
"Senior Indebtedness" means the principal, premium (if any) and unpaid
-------------------
interest on all present and future (i) indebtedness of the Company for borrowed
money, (ii) obligations of the Company evidenced by bonds, debentures, notes or
similar instruments, (iii) all obligations of the Company under (a) interest
rate swaps, caps, collars, options, and similar arrangements, (b) any foreign
exchange contract, currency swap contract, futures contract, currency option
contract, or other foreign currency hedge, and (c) credit swaps, caps, floors,
collars and similar arrangements, (iv) indebtedness incurred, assumed or
guaranteed by the Company in connection with the acquisition by it or a
subsidiary of the Company of any business, properties or assets (except
purchase-money indebtedness classified as accounts payable under generally
accepted accounting principles), (v) all obligations and liabilities (contingent
or otherwise) in respect of leases of the Company required, in conformity with
generally accepted accounting principles, to be accounted for as capitalized
lease obligations on the balance sheet of the Company and all obligations and
liabilities (contingent or otherwise) under any lease or related document
(including a purchase agreement) in connection with the lease or real property
which provides that the Company is contractually obligated to purchase or cause
a third party to purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the lessor and the obligations of the
Company under such lease or related document to purchase or to cause a third
party to purchase such leased property, (vi) reimbursement obligations of the
Company in respect of letters of credit relating to indebtedness or other
obligations of the Company that qualify as indebtedness or obligations of the
kind referred to in clauses (i) through (v) above, and (vii) obligations of the
Company under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kinds referred to in clauses (i) through (vi) above, in each case
unless in the instrument creating or evidencing the indebtedness or obligation
or pursuant to which the same is outstanding it is provided (i) that such
indebtedness or obligation is not senior in right of payment to the Securities
or (ii) that such indebtedness or obligation is subordinated to any other
indebtedness or obligation of the Company, unless such indebtedness or
obligation expressly provides that such indebtedness or obligations be senior in
right of payment to the Securities.
"Special Record Date" means for the payment of any Defaulted Interest,
-------------------
the date fixed by the Trustee pursuant to Section 10.02(b).
"Stated Maturity", when used with respect to any Security, means the
---------------
date specified in such Security as the fixed date on which an amount equal to
the Principal Amount at Maturity of such Security is due and payable.
"Subsidiary" means (i) a corporation, a majority of whose Capital
----------
Stock with voting power, under ordinary circumstances, to elect directors is, at
the date of determination, directly or indirectly owned by the Company, by one
or more subsidiaries of the Company or by
4
<PAGE>
the Company and one or more Subsidiaries of the Company, (ii) a partnership in
which the Company or a Subsidiary of the Company holds a majority interest in
the equity capital or profits of such partnership, or (iii) any other person
(other than a corporation) in which the Company, a Subsidiary of the Company or
the Company and one or more Subsidiaries of the Company, directly or indirectly,
at the date of determination, has (x) at least a majority ownership interest or
(y) the power to elect or direct the election of a majority of the directors or
other governing body of such person.
"Tax Event" means that the Company shall have received an opinion from
---------
independent tax counsel experienced in such matters to the effect that, on or
after June 5, 2000, as a result of (a) any amendment to, or change (including
any announced prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority thereof or
therein or (b) any amendment to, or change in, an interpretation or application
of such laws or regulations by any legislative body, court, governmental agency
or regulatory authority, in each case which amendment or change is enacted,
promulgated, issued or announced or which interpretation is issued or announced
or which action is taken, on or after June 5, 2000, there is more than an
insubstantial risk that interest (including Original Issue Discount) payable on
the Securities either (i) would not be deductible on a current accrual basis or
(ii) would not be deductible under any other method, in either case in whole or
in part, by the Company (by reason of deferral, disallowance, or otherwise) for
United States Federal income tax purposes.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date
---
of this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.
"trading day" means a day during which trading in securities generally
-----------
occurs on the New York Stock Exchange or, if the Common Stock is not listed on
the New York Stock Exchange, on the principal other national or regional
securities exchange on which the Common Stock is then listed or, if the Common
Stock is not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock is then traded.
"Trustee" means the party named as the "Trustee" in the first
-------
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
SECTION 1.02 Definitions.
-----------------------------
Term Section Defined in
---- -------
"Agent Members"........................... 2.12(e)
"Associate"............................... 3.09(a)
"Average Quoted Price".................... 11.01
5
<PAGE>
"Bankruptcy Law"........................................ 6.01
"beneficial owner"...................................... 3.09(a)
"cash".................................................. 3.08(b)
"Change in Control"..................................... 3.09(a)
"Change in Control Purchase Date"....................... 3.09(a)
"Change in Control Purchase Notice"..................... 3.09(c)
"Change in Control Purchase Price"...................... 3.09(a)
"Company Notice"........................................ 3.08(e)
"Company Notice Date"................................... 3.08(c)
"Conversion Agent"...................................... 2.03
"Conversion Date"....................................... 11.02
"Conversion Rate"....................................... 11.01
"Custodian"............................................. 6.01
"Defaulted Interest".................................... 10.02(b)
"Depositary"............................................ 2.01(a)
"Event of Default"...................................... 6.01
"Exchange Act".......................................... 3.08(d)
"Ex-Dividend Time"...................................... 11.01
"Extraordinary Cash Dividend"........................... 11.08
"Institutional Accredited Investors".................... 2.01(b)
"Interest Payment Date"................................. 10.01
"Legal Holiday"......................................... 13.08
"Legend"................................................ 2.06(f)
"Market Price".......................................... 3.08(d)
"Notice of Default"..................................... 6.01
"Paying Agent".......................................... 2.03
"Purchase Date"......................................... 3.08(a)
"Purchase Notice"....................................... 3.08(a)
"Purchase Price"........................................ 3.08(a)
"QIB"................................................... 2.01(a)
"Quoted Price".......................................... 11.01
"Registrar"............................................. 2.03
"Regular Record Date"................................... 10.01
"Restated Principal Amount"............................. 10.01
"Rights"................................................ 11.19
"Rights Agreement"...................................... 11.19
"Rule 144A Information"................................. 4.06
"Sale Price"............................................ 3.08(d)
"Securities Act"....................................... 3.08(d)
"Tax Event Date"........................................ 10.01
"Time of Determination"................................. 11.01
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
---------------------------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
6
<PAGE>
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04 Rules of Construction. Unless the context otherwise
---------------------------------------
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in effect
from time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the plural
include the singular.
SECTION 1.05 Acts of Holders. (a) Any request, demand,
---------------------------------
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of Holders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such officer the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's
7
<PAGE>
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such 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 deems sufficient.
(c) The ownership of Registered Securities shall be proved by the
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(e) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
ARTICLE 2
THE SECURITIES
SECTION 2.01 Form and Dating. The Securities and the Trustee's
------------------------------
certificate of authentication shall be substantially in the form of Exhibits A-1
and A-2, which are a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage (provided
that any such notation, legend or endorsement required by usage is in a form
acceptable to the Company). The Company shall provide any such notations,
legends or endorsements to the Trustee in writing. Each Security shall be dated
the date of its authentication.
(a) 144A Global Securities. Securities offered and sold within the
----------------------
United States to qualified institutional investors as defined in Rule 144A
("QIBs") in reliance on Rule 144A shall be issued, initially in the form of
a 144A Global Security, which shall be deposited with the Trustee at its
Corporate Trust Office, as custodian for the Depositary and registered in
the name of The Depository Trust Company ("DTC") or the nominee thereof
(such depositary, or any successor thereto, and any such nominee being
8
<PAGE>
hereinafter referred to as the "Depositary"), duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the 144A Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee
and the Depositary as hereinafter provided.
(b) Institutional Accredited Investor Securities. Except as provided
--------------------------------------------
in this Section 2.01, 2.06 or 2.12, owners of beneficial interests in
Global Securities will not be entitled to receive physical delivery of
Certificated Securities. Securities offered and sold within the United
States to institutional accredited investors as defined in Rule 501(a)(1),
(2) (3) and (7) under the Securities Act ("Institutional Accredited
Investors") shall be issued, initially in the form of an Institutional
Accredited Investor Security, duly executed by the Company and
authenticated by the Trustee as hereinafter provided.
(c) Global Securities in General. Each Global Security shall
----------------------------
represent such of the outstanding Securities as shall be specified therein
and each shall provide that it shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Securities represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges,
redemptions and conversions.
Any adjustment of the aggregate principal amount of a Global Security
to reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 hereof and
shall be made on the records of the Trustee and the Depositary.
(d) Book-Entry Provisions. This Section 2.01(d) shall apply only to
---------------------
Global Securities deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(d), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary, (b) shall
be delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall bear legends substantially to the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
9
<PAGE>
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS,
IN WHOLE BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST
COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF."
(e) Certificated Securities. Securities not issued as interests
in the Global Securities will be issued in certificated form
substantially in the form of Exhibit A-2 attached hereto.
SECTION 2.02 Execution and Authentication. The Securities shall
------------------------------------------
be executed on behalf of the Company by any Officer, under its corporate seal
reproduced thereon. The signature of the officer on the Securities may be manual
or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at the time of the execution of the Securities the proper
Officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized officer, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for
original issue in an aggregate Principal Amount at Maturity of up to
$624,000,000 upon a Company Order without any further action by the Company. The
aggregate Principal Amount at Maturity of Securities outstanding at any time may
not exceed the amount set forth in the foregoing sentence, except as provided in
Section 2.07.
The Securities shall be issued only in registered form without
coupons and only in denominations of $1,000 of Principal Amount at Maturity and
any integral multiple thereof.
SECTION 2.03 Registrar, Paying Agent and Conversion Agent. The
----------------------------------------------------------
Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency
where Securities may be presented for purchase or payment ("Paying Agent") and
an office or agency where Securities may be presented for conversion
("Conversion Agent"). The Registrar shall keep a register of the Securities and
of their transfer and exchange. The Company may have one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents. The term Paying Agent includes any additional paying agent, including
any named pursuant to Section
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<PAGE>
4.05. The term Conversion Agent includes any additional conversion agent,
including any named pursuant to Section 4.05.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (other than the
Trustee). The agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.07. The Company or
any Subsidiary or an Affiliate of either of them may act as Paying Agent,
Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion
Agent and Paying Agent in connection with the Securities.
SECTION 2.04 Paying Agent to Hold Money and Securities in Trust.
--------------------------------------------------------------------
Except as otherwise provided herein, on or prior to each due date of payments in
respect of any Security, the Company shall deposit with the Paying Agent a sum
of money (in immediately available funds if deposited on the due date) or Common
Stock sufficient to make such payments when so becoming due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that the
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money and Common Stock held by the Paying Agent for the making of
payments in respect of the Securities and shall notify the Trustee of any
default by the Company in making any such payment. At any time during the
continuance of any such default, the Paying Agent shall, upon the written
request of the Trustee, forthwith pay to the Trustee all money and Common Stock
so held in trust. If the Company, a Subsidiary or an Affiliate of either of them
acts as Paying Agent, it shall segregate the money and Common Stock held by it
as Paying Agent and hold it as a separate trust fund. The Company at any time
may require a Paying Agent to pay all money and Common Stock held by it to the
Trustee and to account for any funds and Common Stock disbursed by it. Upon
doing so, the Paying Agent shall have no further liability for the money or
Common Stock.
SECTION 2.05 Securityholder Lists. The Trustee shall preserve in
--------------------------------------
as current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall cause to be furnished to the Trustee at least
semiannually on May 1 and November 1 a listing of Securityholders dated within
15 days of the date on which the list is furnished and at such other times as
the Trustee may request in writing a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.
SECTION 2.06 Transfer and Exchange. Subject to Section 2.12
---------------------------------------
hereof, (a) upon surrender for registration of transfer of any Security,
together with a written instrument of transfer satisfactory to the Registrar
duly executed by the securityholder or such Securityholder's attorney duly
authorized in writing, at the office or agency of the Company designated as
Registrar or co-registrar pursuant to Section 2.03, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of any authorized
denomination or denominations, of a like aggregate
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<PAGE>
Principal Amount at Maturity. The Company shall not charge a service charge for
any registration of transfer or exchange, but the Company may require payment of
a sum sufficient to pay all taxes, assessments or other governmental charges
that may be imposed in connection with the transfer or exchange of the
Securities from the Securityholder requesting such transfer or exchange.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
Principal Amount at Maturity, upon surrender of the Securities to be exchanged,
together with a written instrument of transfer satisfactory to the Registrar
duly executed by the Securityholder or such Securityholder's attorney duly
authorized in writing, at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given and not withdrawn by the Holder thereof
in accordance with the terms of this Indenture (except, in the case of
Securities to be purchased in part, the portion thereof not to be purchased) or
any Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed.
(b) Notwithstanding any provision to the contrary herein, so long as a
Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.12 and this Section 2.06(b). Transfers of a
Global Security shall be limited to transfers of such Global Security in whole,
or in part, to nominees of the Depositary or to a successor of the Depositary or
such successor's nominee.
(c) Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.
(d) Any Registrar appointed pursuant to Section 2.03 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
(e) No Registrar shall be required to make registrations of transfer
or exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
(f) If Securities are issued upon the transfer, exchange or
replacement of Securities subject to restrictions on transfer and bearing the
legends set forth on the form of Security attached hereto as Exhibits A-1 and A-
2 setting forth such restrictions (collectively, the "Legend"), or if a request
is made to remove the Legend on a Security, the Securities so issued shall bear
the Legend, or the Legend shall not be removed, as the case may be, unless there
is
12
<PAGE>
delivered to the Company and the Registrar such satisfactory evidence, which
shall include an Opinion of Counsel, as may be reasonably required by the
Company and the Registrar, that neither the Legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 under the Securities Act or that
such Securities are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon (i) provision of such satisfactory evidence, or (ii)
notification by the Company to the Trustee and registrar of the sale of such
Security pursuant to a registration statement that is effective at the time of
such sale, the Trustee, at the written direction of the Company, shall
authenticate and deliver a Security that does not bear the Legend. If the Legend
is removed from the face of a Security and the Security is subsequently held by
an Affiliate of the Company, the Legend shall be reinstated.
SECTION 2.07 Replacement Securities. If (a) any mutilated
----------------------------------------
Security is surrendered to the Trustee, or (b) the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
written request the Trustee shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and Principal Amount at Maturity, bearing
a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.08 Outstanding Securities; Determinations of Holders'
-------------------------------------------------------------------
Action. Securities outstanding at any time are all the Securities authenticated
------
by the Trustee except for those cancelled by it, those paid pursuant to Section
2.07 delivered to it for cancellation and those described in this Section 2.08
as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate thereof holds the Security; provided, however,
13
<PAGE>
that in determining whether the Holders of the requisite Principal Amount at
Maturity of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Subject to the foregoing,
only Securities outstanding at the time of such determination shall be
considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following the Purchase Date or a Change
in Control Purchase Date, or on Stated Maturity, money or securities, if
permitted hereunder, sufficient to pay Securities payable on that date, then
immediately after such Redemption Date, Purchase Date, Change in Control
Purchase Date or Stated Maturity, as the case may be, such Securities shall
cease to be outstanding and Original Issue Discount and interest, if any, on
such Securities shall cease to accrue; provided, that if such Securities are to
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made.
If a Security is converted in accordance with Article 11, then from
and after the time of conversion on the Conversion Date, such Security shall
cease to be outstanding and Original Issue Discount and interest, if any, shall
cease to accrue on such Security.
SECTION 2.09 Temporary Securities. Pending the preparation of
----------------------------------
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like Principal Amount at
Maturity of definitive Securities of authorized denominations. Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
14
<PAGE>
SECTION 2.10 Cancellation. All Securities surrendered for payment,
--------------------------
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange shall, if surrendered to any person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. The Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation or that any Holder has converted pursuant to Article 11. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of by
the Trustee in accordance with the Trustee's customary procedure.
SECTION 2.11 Persons Deemed Owners. Prior to due presentment of a
----------------------------------
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of the Security or the payment of any Redemption Price, Purchase Price
or Change in Control Purchase Price in respect thereof, and interest thereon,
for the purpose of conversion and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 2.12 Global Securities.
-------------------------------
(a) Notwithstanding any other provisions of this Indenture or the
Securities, (A) transfers of a Global Security, in whole or in part, shall be
made only in accordance with Section 2.06 and Section 2.12(a)(i), (B) transfer
of a beneficial interest in a Global Security for a Certificated Security shall
comply with Section 2.06 and Section 2.12(a)(ii) below, and (C) transfers of a
Certificated Security shall comply with Section 2.06 and Section 2.12(a)(iii)
and (iv) below.
(i) Transfer of Global Security. A Global Security may not be
transferred, in whole or in part, to any Person other than the
Depositary or a nominee or any successor thereof, and no such transfer
to any such other Person may be registered; provided that this clause
(i) shall not prohibit any transfer of a Security that is issued in
exchange for a Global Security but is not itself a Global Security. No
transfer of a Security to any Person shall be effective under this
Indenture or the Securities unless and until such Security has been
registered in the name of such Person. Nothing in this Section
2.12(a)(i) shall prohibit or render ineffective any transfer of a
beneficial interest in a Global Security effected in accordance with
the other provisions of this Section 2.12(a).
(ii) Restrictions on Transfer of a Beneficial Interest in a Global
Security for a Certificated Security. A beneficial interest in a
Global Security may not be exchanged for a Certificated Security
except upon satisfaction of the requirements set forth below. Upon
receipt by the Trustee of a transfer of a beneficial interest in
15
<PAGE>
a Global Security in accordance with Applicable Procedures for a
Certificated Security in the form satisfactory to the Trustee, together
with:
(a) so long as the Securities are Restricted Securities, certification, in
the form set forth in Exhibit B-1, and, if requested by the Company or
the Registrar, certification in the form set forth in Exhibit B-2,
that such beneficial interest in the Global Security is being
transferred to an Institutional Accredited Investor in accordance with
subparagraphs (a)(1), (2), (3) or (7) of Rule 501 under the Securities
Act;
(b) written instructions to the Trustee to make, or direct the Registrar
to make, an adjustment on its books and records with respect to such
Global Security to reflect a decrease in the aggregate Principal
Amount of the Securities represented by the Global Security, such
instructions to contain information regarding the Depositary account
to be credited with such decrease; and
(c) if the Company or Registrar so requests, an opinion of counsel or
other evidence reasonably satisfactory to them as to the compliance
with the restrictions set forth in the Legend.
then the Trustee shall cause, or direct the Registrar to cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Registrar, the aggregate Principal Amount at Maturity of Securities
represented by the Global Security to be decreased by the aggregate Principal
Amount at Maturity of the Certificated Security to be issued, shall issue such
Certificated Security and shall debit or cause to be debited to the account of
the Person specified in such instructions a beneficial interest in the Global
Security equal to the Principal Amount at Maturity of the Certificated Security
so issued.
(iii) Transfer and Exchange of Certificated Securities. When Certificated
Securities are presented to the Registrar with a request:
(x) to register the transfer of such Certificated Securities; or
(y) to exchange such Certificated Securities for an equal Principal
Amount at Maturity of Certificated Securities of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Certificated Securities surrendered for transfer or exchange:
(a) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing; and
16
<PAGE>
(b) so long as such Securities are Restricted Securities, such Securities
are being transferred or exchanged pursuant to an effective registration
statement under the Securities Act or pursuant to clause (A), (B) or (C)
below, and are accompanied by the following additional information and
documents, as applicable:
(A) if such Certificated Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect; or
(B) if such Certificated Securities are being transferred to the
Company, a certification to that effect; or
(C) if such Certificated Securities are being transferred
pursuant to an exemption from registration (i) a certification to that
effect (in the form set forth in Exhibit B-1 and B-2, if applicable)
and (ii) if the Company or Registrar so requests, an opinion of
counsel or other evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the Legend.
(iv) Restrictions on Transfer of a Certificated Security for a Beneficial
Interest in a Global Security. A Certificated Security may not be exchanged
for a beneficial interest in a Global Security except upon satisfaction of
the requirements set forth below.
Upon receipt by the Trustee of a Certificated Security, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:
(a) so long as the Securities are Restricted Securities,
certification, in the form set forth in Exhibit B-1, that such
Certificated Security is being transferred to a Qualified
Institutional Buyer in accordance with Rule 144A; and
(b) written instructions directing the Trustee to make, or to direct
the Registrar to make, an adjustment on its books and records with
respect to such Global Security to reflect an increase in the
aggregate Principal Amount at Maturity of the Securities represented
by the Global Security, such instructions to contain information
regarding the Depositary account to be credited with such increase,
then the Trustee shall cancel such Certificated Security and cause, or
direct the Registrar to cause, in accordance with the standing instructions
and procedures existing between the Depositary and the Registrar, the
aggregate Principal Amount at Maturity of Securities represented by the
Global Security to be increased by the aggregate Principal Amount at
Maturity of the Certificated Security to be exchanged, and shall credit or
cause to be credited to the account of the Person specified in such
instructions a beneficial interest in the Global
17
<PAGE>
Security equal to the Principal Amount at Maturity of the Certificated
Security so cancelled. If no Global Securities are then outstanding, the
Company shall issue and the Trustee shall authenticate, upon written order
of the Company in the form of an Officers' Certificate, a new Global
Security in the appropriate Principal Amount at Maturity.
(b) Subject to the succeeding paragraph, every Security shall be subject
to the restrictions on transfer provided in the Legend including the delivery of
an opinion of counsel, if so provided. Whenever any Restricted Security is
presented or surrendered for registration of transfer or for exchange for a
Security registered in a name other than that of the Holder, such Security must
be accompanied by a certificate in substantially the form set forth in
Exhibit B-1, dated the date of such surrender and signed by the Holder of such
Security, as to compliance with such restrictions on transfer. The Registrar
shall not be required to accept for such registration of transfer or exchange
any Security not so accompanied by a properly completed certificate.
(c) The restrictions imposed by the Legend upon the transferability of any
Security shall cease and terminate when such Security has been sold pursuant to
an effective registration statement under the Securities Act or transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by an opinion of counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and in form
acceptable to the Company, to the effect that the transfer of such Security has
been made in compliance with Rule 144 or such successor provision), be exchanged
for a new Security, of like tenor and aggregate Principal Amount at Maturity,
which shall not bear the restrictive Legend. The Company shall inform the
Trustee of the effective date of any registration statement registering the
Securities under the Securities Act. The Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
aforementioned opinion of counsel or registration statement.
(d) As used in the preceding two paragraphs of this Section 2.12, the term
"transfer" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Security.
(e) The provisions of clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:
(1) Notwithstanding any other provisions of this Indenture or the
Securities, except as provided in Section 2.12(a)(ii), a Global
Security shall not be exchanged in whole or in part for a Security
registered in the name of any Person other than the Depositary or one
or more nominees thereof, provided that a Global Security may be
exchanged for Securities
18
<PAGE>
registered in the names of any person designated by the depositary in
the event that (i) the Depositary has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security
or such Depositary has ceased to be a "clearing agency" registered
under the Exchange Act, and a successor Depositary is not appointed by
the Company within 90 days or (ii) an Event of Default has occurred
and is continuing with respect to the Securities. Any Global Security
exchanged pursuant to clause (i) above shall be so exchanged in whole
and not in part, and any Global Security exchanged pursuant to clause
(ii) above may be exchanged in whole or from time to time in part as
directed by the Depositary. Any Security issued in exchange for a
Global Security or any portion thereof shall be a Global Security;
provided that any such Security so issued that is registered in the
name of a Person other than the Depositary or a nominee thereof shall
not be a Global Security.
(2) Securities issued in exchange for a Global Security or any
portion thereof shall be issued in definitive, fully registered form,
without interest coupons, shall have an aggregate Principal Amount at
Maturity equal to that of such Global Security or portion thereof to
be so exchanged, shall be registered in such names and be in such
authorized denominations as the Depositary shall designate and shall
bear the applicable legends provided for herein. Any Global Security
to be exchanged in whole shall be surrendered by the Depositary to the
Trustee, as Registrar. With regard to any Global Security to be
exchanged in part, either such Global Security shall be so surrendered
for exchange or, if the Trustee is acting as custodian for the
Depositary or its nominee with respect to such Global Security, the
Principal Amount at Maturity thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the Trustee. Upon any
such surrender or adjustment, the Trustee shall authenticate and
deliver the Security issuable on such exchange to or upon the order of
the Depositary or an authorized representative thereof.
(3) Subject to the provisions of clause (5) below, the registered
Holder may grant proxies and otherwise authorize any Person, including
Agent Members (as defined below) and persons that may hold interests
through Agent Members, to take any action which a holder is entitled
to take under this Indenture or the Securities.
(4) In the event of the occurrence of any of the events specified in
clause (1) above, the Company will promptly make available to the
Trustee a reasonable supply of Certificated Securities in definitive,
fully registered form, without interest coupons.
(5) Neither any members of, or participants in, the Depositary
(collectively, the "Agent Members") nor any other Persons on whose
behalf Agent Members may act shall have any rights under this
Indenture
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with respect to any Global Security registered in the name of the
Depositary or any nominee thereof, or under any such Global
Security, and the Depositary or such nominee, as the case may be,
may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and holder of such
Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee
or any agent of the Company or the Trustee from giving effect to
any written certification, proxy or other authorization furnished
by the Depositary or such nominee, as the case may be, or impair,
as between the Depositary, its Agent Members and any other person
on whose behalf an Agent Member may act, the operation of
customary practices of such Persons governing the exercise of the
rights of a holder of any Security.
SECTION 2.13 CUSIP Numbers. The Company is issuing the Securities
---------------------------
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01 Right to Redeem; Notices to Trustee. The Company, at its
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option, may redeem the Securities in accordance with the provisions of
paragraphs 5 and 7 of the Securities. If the Company elects to redeem Securities
pursuant to paragraph 5 of the Securities, it shall notify the Trustee in
writing of the Redemption Date, the Principal Amount at Maturity of Securities
to be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 by a Company Order, at least 20 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee).
SECTION 3.02 Selection of Securities to Be Redeemed. If less than all
----------------------------------------------------
the Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed pro rata or by lot or by any other method the Trustee considers fair
and appropriate (so long as such method is not prohibited by the rules of any
stock exchange on which the Securities are then listed). The Trustee shall make
the selection at least 15 days but not more than 60 days before the Redemption
Date from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the Principal Amount at Maturity
of Securities that have denominations larger than $1,000.
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Securities and portions of them the Trustee selects shall be in
Principal Amounts at Maturity of $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed may be treated by
the Trustee as outstanding for the purpose of such selection.
SECTION 3.03 Notice of Redemption. At least 15 days but not more than
----------------------------------
60 days before a Redemption Date, the Company shall mail a notice of redemption
by first-class mail, postage prepaid, to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) that Securities called for redemption may be converted at any time
before the close of business on the Redemption Date;
(6) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 8 of the Securities;
(7) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(8) if fewer than all the outstanding Securities are to be redeemed,
the certificate number and Principal Amounts at Maturity of the
particular Securities to be redeemed;
(9) that, unless the Company defaults in making payment of such
Redemption Price, Original Issue Discount on Securities called for
redemption, and interest, if any, will cease to accrue on and after
the Redemption Date; and
(10) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense, provided that the
Company makes such request at least three Business Days prior to such notice of
redemption.
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SECTION 3.04 Effect of Notice of Redemption. Once notice of
--------------------------------------------
redemption is given, Securities called for redemption become due and payable on
the Redemption Date and at the Redemption Price stated in the notice except for
Securities which are converted in accordance with the terms of this Indenture.
Upon surrender to the Paying Agent, such Securities shall be paid at the
Redemption Price stated in the notice.
SECTION 3.05 Deposit of Redemption Price. Prior to 10.00 a.m. (New
-----------------------------------------
York City Time), on Redemption Date, the Company shall deposit with the Paying
Agent (or if the Company or a Subsidiary or an Affiliate of either of them is
the Paying Agent, shall segregate and hold in trust) money sufficient to pay the
Redemption Price of all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which on or prior
thereto have been delivered by the Company to the Trustee for cancellation or
have been converted. The Paying Agent shall as promptly as practicable return to
the Company any money, not required for that purpose because of conversion of
Securities pursuant to Article 11. If such money is then held by the Company in
trust and is not required for such purpose it shall be discharged from such
trust.
SECTION 3.06 Securities Redeemed in Part. Upon surrender of a
-----------------------------------------
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder a new Security in an authorized
denomination equal in Principal Amount at Maturity to the unredeemed portion of
the Security surrendered.
SECTION 3.07 Conversion Arrangement on Call for Redemption. In
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connection with any redemption of Securities, the Company may arrange for the
purchase and conversion of any Securities called for redemption by an agreement
with one or more investment bankers or other purchasers to purchase such
Securities by paying to the Trustee in trust for the Securityholders, on or
prior to 10:00 a.m. New York City time on the Redemption Date, an amount that,
together with any amounts deposited with the Trustee by the Company for the
redemption of such Securities, is not less than the Redemption Price of such
Securities. Notwithstanding anything to the contrary contained in this Article
3, the obligation of the Company to pay the Redemption Price of such Securities
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers. If such an agreement is entered into, any Securities
not duly surrendered for conversion by the Holders thereof may, at the option of
the Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article 11) surrendered by such purchasers for conversion, all as
of immediately prior to the close of business on the Business Day prior to the
Redemption Date, subject to payment of the above amount as aforesaid. The
Trustee shall hold and pay to the Holders whose Securities are selected for
redemption any such amount paid to it for purchase and conversion in the same
manner as it would moneys deposited with it by the Company for the redemption of
Securities. Without the Trustee's prior written consent, no arrangement between
the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee as set forth in this Indenture,
and the Company agrees to indemnify the Trustee from, and hold it harmless
against, any loss, liability or expense arising out of or in connection with any
such arrangement for the purchase and conversion of any Securities between the
Company and such purchasers, including the costs and expenses incurred by the
Trustee in the defense of any claim or liability arising out of or in
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connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.
SECTION 3.08 Purchase of Securities at Option of the Holder.
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(a) General. Securities shall be purchased by the Company pursuant to
paragraph 6 of the Securities as of June 12, 2003 and June 12, 2010, (each, a
"Purchase Date"), at the purchase price of $628.57 per $1,000 of Principal
Amount at Maturity as of June 12, 2003, and of $761.00 per $1,000 of Principal
Amount at Maturity as of June 12, 2010 (each, a "Purchase Price", as
applicable), at the option of the Holder thereof, upon:
(1) delivery to the Paying Agent, by the Holder of a written notice
of purchase (a "Purchase Notice") at any time from the opening of
business on the date that is at least 20 Business Days prior to a
Purchase Date until the close of business on such Purchase Date
stating:
(A) the certificate number of the Security which the Holder will
deliver to be purchased,
(B) the portion of the Principal Amount at Maturity of the
Security which the Holder will deliver to be purchased, which
portion must be in principal amounts of maturity of $1,000 or an
integral multiple thereof,
(C) that such Security shall be purchased as of the Purchase
Date pursuant to the terms and conditions specified in paragraph
6 of the Securities and in this Indenture, and
(D) in the event the Company elects, pursuant to Section
3.08(b), to pay the Purchase Price to be paid as of such Purchase
Date, in whole or in part, in shares of Common Stock but such
portion of the Purchase Price shall ultimately be payable to such
Holder entirely in cash because any of the conditions to payment
of the Purchase Price in Common Stock is not satisfied prior to
the close of business on such Purchase Date, as set forth in
Section 3.08(d), whether such Holder elects (i) to withdraw such
Purchase Notice as to some or all of the Securities to which such
Purchase Notice relates (stating the Principal Amount at Maturity
and certificate numbers of the Securities as to which such
withdrawal shall relate), or (ii) to receive cash in respect of
the entire Purchase Price for all Securities (or portions
thereof) to which such Purchase Notice relates; and
(2) delivery of such Security to the Paying Agent prior to, on or
after the Purchase Date (together with all necessary endorsements) at
the offices of the Paying Agent, such delivery being a condition to
receipt by the Holder of the Purchase Price therefor; provided,
however, that such Purchase Price shall be so paid pursuant to this
Section 3.08 only if the Security so delivered to the Paying Agent
shall conform in all respects to the description thereof in the
related Purchase Notice, as determined by the Company.
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If a Holder, in such Holder's Purchase Notice and in any written
notice of withdrawal delivered by such Holder pursuant to the terms of Section
3.10, fails to indicate such Holder's choice with respect to the election set
forth in clause (D) of Section 3.08(a)(1), such Holder shall be deemed to have
elected to receive cash in respect of the Purchase Price for all Securities
subject to such Purchase Notice in the circumstances set forth in such clause
(D).
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the Principal Amount at Maturity of
such portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Security also apply to the
purchase of such portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.08 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Purchase Date and
the time of delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this Section 3.08(a)
shall have the right to withdraw such Purchase Notice at any time prior to the
close of business on the Business Day prior to the Purchase Date by delivery of
a written notice of withdrawal to the Paying Agent in accordance with Section
3.10.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Purchase Notice or written notice of withdrawal thereof.
(b) Company's Right to Elect Manner of Payment of Purchase Price. The
Securities to be purchased pursuant to Section 3.08(a) may be paid for, at the
election of the Company, in U.S. legal tender ("cash") or Common Stock, or in
any combination of cash and Common Stock, subject to the conditions set forth in
Sections 3.08(c) and (d). The Company shall designate, in the Company Notice
delivered pursuant to Section 3.08(e), whether the Company will purchase the
Securities for cash or Common Stock, or, if a combination thereof, the
percentages of the Purchase Price of Securities in respect of which it will pay
in cash or Common Stock; provided that the Company will pay cash for fractional
interests in Common Stock. For purposes of determining the existence of
potential fractional interests, all Securities subject to purchase by the
Company held by a Holder shall be considered together (no matter how many
separate certificates are to be presented). Each Holder whose Securities are
purchased pursuant to this Section 3.08 shall receive the same percentage of
cash or Common Stock in payment of the Purchase Price for such Securities,
except (i) as provided in Section 3.08(d) with regard to the payment of cash in
lieu of fractional shares of Common Stock and (ii) in the event that the Company
is unable to purchase the Securities of a Holder or Holders for Common Stock
because any necessary qualifications or registrations of the Common Stock under
applicable state securities laws cannot be obtained, the Company may purchase
the Securities of such Holder or Holders for cash. The Company may not change
its election with respect to the consideration (or components or percentages of
components thereof) to be paid once the Company has given its Company Notice to
Securityholders except pursuant to this Section 3.08(b) or pursuant to Section
3.08(d) in the event of a failure to satisfy, prior to the close of business on
the Purchase Date, any condition to the payment of the Purchase Price, in whole
or in part, in Common Stock.
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At least three Business Days before the Company Notice Date, the
Company shall deliver an Officers' Certificate to the Trustee specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 3.08(e),
(iii) if the Company elects to pay the Purchase Price, or a
specified percentage thereof, in Common Stock, that the conditions to
such manner of payment set forth in Section 3.08(d) have been or will
be complied with, and
(iv) whether the Company desires the Trustee to give the Company
Notice required by Section 3.08(e).
(c) Purchase with Cash. On each Purchase Date, at the option of
the Company, the Purchase Price of Securities in respect of which a Purchase
Notice pursuant to Section 3.08(a) has been given, or a specified percentage
thereof, may be paid by the Company with cash equal to the aggregate Purchase
Price of such Securities. If the Company elects to purchase Securities with
cash, the Company Notice, as provided in Section 3.08(e), shall be sent to
Holders (and to beneficial owners as required by applicable law) not less than
20 Business Days prior to such Purchase Date (the "Company Notice Date").
(d) Payment by Issuance of Common Stock. On each Purchase Date,
at the option of the Company, the Purchase Price of Securities in respect of
which a Purchase Notice pursuant to Section 3.08(a) has been given, or a
specified percentage thereof, may be paid by the Company by the issuance of a
number of shares of Common Stock equal to the quotient obtained by dividing (i)
the amount of cash to which the Securityholders would have been entitled had the
Company elected to pay all or such specified percentage, as the case may be, of
the Purchase Price of such Securities in cash by (ii) the Market Price of a
share of Common Stock, subject to the next succeeding paragraph.
The Company will not issue a fractional share of Common Stock in
payment of the Purchase Price. Instead the Company will pay cash for the current
market value of the fractional share. The current market value of a fraction of
a share shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent. It is understood that if a
Holder elects to have more than one Security purchased, the number of shares of
Common Stock shall be based on the aggregate amount of Securities to be
purchased.
If the Company elects to purchase the Securities by the issuance of
shares of Common Stock, the Company Notice, as provided in Section 3.08(e),
shall be sent to the Holders (and to beneficial owners as required by applicable
law) not later than the Company Notice Date.
The Company's right to exercise its election to purchase the
Securities pursuant to Section 3.08 through the issuance of shares of Common
Stock shall be conditioned upon:
(i) the Company's not having given its Company Notice of an
election to pay entirely in cash and its giving of timely Company
Notice of election to purchase
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all or a specified percentage of the Securities with Common Stock as
provided herein;
(ii) the registration of the shares of Common Stock to be issued
in respect of the payment of the Purchase Price under the Securities
Act of 1933, as amended (the "Securities Act"), or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in each case,
if required;
(iii) any necessary qualification or registration under applicable
state securities laws or the availability of an exemption from such
qualification and registration; and
(iv) the receipt by the Trustee of an Officers' Certificate and
an Opinion of Counsel each stating that (A) the terms of the issuance
of the Common Stock are in conformity with this Indenture and (B) the
shares of Common Stock to be issued by the Company in payment of the
Purchase Price in respect of Securities have been duly authorized and,
when issued and delivered pursuant to the terms of this Indenture in
payment of the Purchase Price in respect of the Securities, will be
validly issued, fully paid and non-assessable and, to the best of such
counsel's knowledge, free from preemptive rights, and, in the case of
such Officers' Certificate, stating that conditions (i), (ii) and
(iii) above and the condition set forth in the second succeeding
sentence have been satisfied and, in the case of such Opinion of
Counsel, stating that conditions (ii) and (iii) above has been
satisfied.
Such Officers' Certificate shall also set forth the number of shares
of Common Stock to be issued for each $1,000 Principal Amount at Maturity of
Securities and the Sale Price of a share of Common Stock on each trading day
during the period commencing on the first trading day of the period during which
the Market Price is calculated and ending on the applicable Purchase Date. The
Company may pay the Purchase Price (or any portion thereof) in Common Stock only
if the information necessary to calculate the Market Price is published in a
daily newspaper of national circulation. If the foregoing conditions are not
satisfied with respect to a Holder or Holders prior to the close of business on
the Purchase Date and the Company has elected to purchase the Securities
pursuant to this Section 3.08 through the issuance of shares of Common Stock,
the Company shall pay the entire Purchase Price of the Securities of such Holder
or Holders in cash.
The "Market Price" means the average of the Sale Prices of the Common
Stock for the five trading day period ending on (if the third Business Day prior
to the applicable Purchase Date is a trading day, or if not, then on the last
trading day prior to) the third Business Day prior to the applicable Purchase
Date, appropriately adjusted to take into account the occurrence, during the
period commencing on the first of such trading days during such five trading day
period and ending on such Purchase Date, of any event described in Section
11.06, 11.07 or 11.08; subject, however, to the conditions set forth in Sections
11.09 and 11.10.
The "Sale Price" of the Common Stock on any date means the closing per
share sale price (or, if no closing sale price is reported, the average of the
bid and ask prices or, if more
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than one in either case, the average of the average bid and average ask prices)
on such date as reported in the composite transactions for the principal United
States securities exchange on which the Common Stock is traded or, if the Common
Stock is not listed on a United States national or regional securities exchange,
as reported by the National Association of Securities Dealers Automated
Quotation System.
(e) Notice of Election. The Company's notice of election to purchase
with cash or Common Stock or any combination thereof shall be sent to the
Holders (and to beneficial owners as required by applicable law) in the manner
provided in Section 13.02 at the time specified in Section 3.08(c) or (d), as
applicable (the "Company Notice"). Such Company Notice shall state the manner of
payment elected and shall contain the following information:
In the event the Company has elected to pay the Purchase Price (or a
specified percentage thereof) with Common Stock, the Company Notice shall:
(1) state that each Holder will receive Common Stock with a Market
Price determined as of a specified date prior to the Purchase Date
equal to such specified percentage of the Purchase Price of the
Securities held by such Holder (except any cash amount to be paid in
lieu of fractional shares);
(2) set forth the method of calculating the Market Price of the
Common Stock; and
(3) state that because the Market Price of Common Stock will be
determined prior to the Purchase Date, Holders will bear the market
risk with respect to the value of the Common Stock to be received from
the date such Market Price is determined to the Purchase Date.
In any case, each Company Notice shall include a form of Purchase
Notice to be completed by a Securityholder and shall state:
(i) the Purchase Price and the Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion
Agent;
(iii) that Securities as to which a Purchase Notice has been given
may be converted pursuant to Article 11 hereof only if the applicable
Purchase Notice has been withdrawn in accordance with the terms of
this Indenture;
(iv) that Securities must be surrendered to the Paying Agent to
collect payment;
(v) that the Purchase Price for any security as to which a Purchase
Notice has been given and not withdrawn will be paid promptly
following the later of the Purchase Date and the time of surrender of
such Security as described in (iv);
(vi) the procedures the Holder must follow to exercise rights under
Section 3.08 and a brief description of those rights;
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(vii) briefly, the conversion rights of the Securities; and
(viii) the procedures for withdrawing a Purchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms
of Section 3.08(a)(1)(D) or Section 3.10).
(ix) that, unless the Company defaults in making payment of such
Redemption Price, Original Issue Discount on Securities called for
redemption, and interest, if any, will cease to accrue on and after
the Redemption Date; and
(x) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give such Company Notice
in the Company's name and at the Company's expense; provided, however, that, in
all cases, the text of such Company Notice shall be prepared by the Company.
Upon determination of the actual number of shares of Common Stock to
be issued for each $1,000 Principal Amount at Maturity of Securities, the
Company will publish such determination on the Company's Web site on the World
Wide Web.
(f) Covenants of the Company. All shares of Common Stock delivered
upon purchase of the Securities shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and nonassessable, subject
to Wis. Stat. (S)1800622(2)(b) and shall be free from preemptive rights and free
of any lien or adverse claim.
The Company shall use its best efforts to list or cause to have quoted
any shares of Common Stock to be issued to purchase Securities on each national
securities exchange or over-the-counter or other domestic market on which the
Common Stock is then listed or quoted.
(g) Procedure upon Purchase. The Company shall deposit cash (in
respect of a cash purchase under Section 3.08(c) or for fractional interests, as
applicable) or shares of Common Stock, or a combination thereof, as applicable,
at the time and in the manner as provided in Section 3.11, sufficient to pay the
aggregate Purchase Price of all Securities to be purchased pursuant to this
Section 3.08. As soon as practicable after the Purchase Date, the Company shall
deliver to each Holder entitled to receive Common Stock through the Paying
Agent, a certificate for the number of full shares of Common Stock issuable in
payment of the Purchase Price and cash in lieu of any fractional interests. The
person in whose name the certificate for Common Stock is registered shall be
treated as a holder of record of shares of Common Stock on the Business Day
following the Purchase Date. Subject to Section 3.08(d), no payment or
adjustment will be made for dividends on the Common Stock the record date for
which occurred on or prior to the Purchase Date.
(h) Taxes. If a Holder of a Security is paid in Common Stock, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
such issue of shares of Common Stock. However, the Holder shall pay any such tax
which is due because the Holder requests the shares of Common Stock to be issued
in a name other than the Holder's name. The Paying Agent may refuse to deliver
the certificates representing the Common Stock being issued in a name other than
the Holder's name until the Paying Agent receives a sum sufficient to pay
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any tax which will be due because the shares of Common Stock are to be issued in
a name other than the Holder's name. Nothing herein shall preclude any income
tax withholding required by law or regulations.
SECTION 3.09 Purchase of Securities at Option of the Holder upon
-----------------------------------------------------------------
Change in Control. (a) If on or prior to June 12, 2003 there shall have
-----------------
occurred a Change in Control, Securities shall be purchased by the Company, at
the option of the Holder thereof, at a purchase price specified in paragraph 6
of the Securities (the "Change in Control Purchase Price"), as of the date that
is 35 Business Days after the occurrence of the Change in Control (the "Change
in Control Purchase Date"), subject to satisfaction by or on behalf of the
Holder of the requirements set forth in Section 3.09(c).
A "Change in Control" shall be deemed to have occurred at such time as
either of the following events shall occur:
(i) There shall be consummated any share exchange, consolidation or
merger of the Company pursuant to which the Common Stock would be
converted into cash, securities or other property, in each case other
than a share exchange, consolidation or merger of the Company in which
the holders of the Common Stock immediately prior to the share
exchange, consolidation or merger have, directly or indirectly, at
least a majority of the total voting power in the aggregate of all
classes of capital stock of the continuing or surviving corporation
immediately after the share exchange, consolidation or merger; or
(ii) There is a report filed on Schedule 13D or TO (or any successor
schedule, form or report) pursuant to the Exchange Act, disclosing
that any person (for the purposes of this Section 3.09 only, as the
term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act) has become the beneficial owner (as the term "beneficial
owner" is defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of 50% or more of the voting power
of the Common Stock then outstanding; provided, however, that a person
shall not be deemed beneficial owner of, or to own beneficially, (A)
any securities tendered pursuant to a tender or exchange offer made by
or on behalf of such person or any of such person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange thereunder, or (B) any securities if such beneficial
ownership (1) arises solely as a result of a revocable proxy delivered
in response to a proxy or consent solicitation made pursuant to the
applicable rules and regulations under the Exchange Act, and (2) is
not also then reportable on Schedule 13D (or any successor schedule)
under the Exchange Act.
Notwithstanding the foregoing provisions of this Section 3.09, a Change in
Control shall not be deemed to have occurred by virtue of the Company, any
Subsidiary, any employee stock ownership plan or any other employee benefit plan
of the Company or any Subsidiary, or any person holding Common Stock for or
pursuant to the terms of any such employee benefit plan, filing or becoming
obligated to file a report under or in response to Schedule 13D or Schedule
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TO (or any successor schedule, form or report) under the Exchange Act disclosing
beneficial ownership by it of shares of Common Stock, whether in excess of 50%
or otherwise.
"Associate" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.
(b) Within 15 Business Days after the occurrence of a Change in
Control, the Company shall mail a written notice of Change in Control by first-
class mail to the Trustee and to each Holder (and to beneficial owners as
required by applicable law). The notice shall include a form of Change in
Control Purchase Notice to be completed by the Securityholder and shall state:
(1) briefly, the events causing a Change in Control and the date of
such Change in Control;
(2) the date by which the Change in Control Purchase Notice pursuant
to this Section 3.09 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) the name and address of the Paying Agent and the Conversion Agent;
(6) the Conversion Rate and any adjustments thereto;
(7) that Securities as to which a Change in Control Purchase Notice
has been given may be converted pursuant to Article 11 hereof only if
the Change in Control Purchase Notice has been withdrawn in accordance
with the terms of this Indenture;
(8) that Securities must be surrendered to the Paying Agent to collect
payment;
(9) that the Change in Control Purchase Price for any Security as to
which a Change in Control Purchase Notice has been duly given and not
withdrawn will be paid promptly following the later of the Change in
Control Purchase Date and the time of surrender of such Security as
described in (8);
(10) briefly, the procedures the Holder must follow to exercise rights
under this Section 3.09;
(11) briefly, the conversion rights of the Securities; and
(12) the procedures for withdrawing a Change in Control Purchase
Notice.
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(13) that, unless the Company defaults in making payment of such
Redemption Price, Original Issue Discount on Securities called for
redemption, and interest, if any, will cease to accrue on and after
the Redemption Date; and
(14) the CUSIP number of the Securities.
(c) A Holder may exercise its rights specified in Section 3.09(a)
upon delivery of a written notice of purchase (a "Change in Control Purchase
Notice") to the Paying Agent at any time prior to the close of business on the
Change in Control Purchase Date, stating:
(1) the certificate number of the Security which the Holder will
deliver to be purchased;
(2) the portion of the Principal Amount at Maturity of the Security
which the Holder will deliver to be purchased, which portion must be
$1,000 or an integral multiple thereof; and
(3) that such Security shall be purchased pursuant to the terms and
conditions specified in paragraph 6 of the Securities.
The delivery of such Security to the Paying Agent prior to, on or
after the Change in Control Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent shall be a condition to the
receipt by the Holder of the Change in Control Purchase Price therefor;
provided, however, that such Change in Control Purchase Price shall be so paid
pursuant to this Section 3.09 only if the Security so delivered to the Paying
Agent shall conform in all respects to the description thereof set forth in the
related Change in Control Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Security if the Principal Amount at Maturity of
such portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Security also apply to the
purchase of such portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.09 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Change in Control
Purchase Date and the time of delivery of the Security to the Paying Agent in
accordance with this Section 3.09.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 3.09(c) shall have the right to withdraw such Change in Control Purchase
Notice at any time prior to the close of business on the Change in Control
Purchase Date by delivery of a written notice of withdrawal to the Paying Agent
in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Change in Control Purchase Notice or written withdrawal thereof.
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SECTION 3.10 Effect of Purchase Notice or Change in Control
------------------------------------------------------------
Purchase Notice. Upon receipt by the Paying Agent of the Purchase Notice or
---------------
Change in Control Purchase Notice specified in Section 3.08(a) or Section
3.09(c), as applicable, the Holder of the Security in respect of which such
Purchase Notice or Change in Control Purchase Notice, as the case may be, was
given shall (unless such Purchase Notice or Change in Control Purchase Notice
is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Purchase Price or Change in Control Purchase
Price, as the case may be, with respect to such Security. Such Purchase Price
or Change in Control Purchase Price shall be paid to such Holder, subject to
receipts of funds and/or securities by the Paying Agent, promptly following
the later of (x) the Purchase Date or the Change in Control Purchase Date, as
the case may be, with respect to such Security (provided the conditions in
Section 3.08(a) or Section 3.09(c), as applicable, have been satisfied) and
(y) the time of delivery of such Security to the Paying Agent by the Holder
thereof in the manner required by Section 3.08(a) or Section 3.09(c), as
applicable. Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice, as the case may be, has been given by the Holder
thereof may not be converted pursuant to Article 11 hereof on or after the
date of the delivery of such Purchase Notice or Change in Control Purchase
Notice, as the case may be, unless such Purchase Notice or Change in Control
Purchase Notice, as the case may be, has first been validly withdrawn as
specified in the following two paragraphs.
A Purchase Notice or Change in Control Purchase Notice, as the case
may be, may be withdrawn by means of a written notice of withdrawal delivered to
the office of the Paying Agent in accordance with the Purchase Notice or Change
in Control Purchase Notice, as the case may be, at any time prior to the close
of business on the Purchase Date or the Change in Control Purchase Date, as the
case may be, specifying:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted,
(2) the Principal Amount at Maturity of the Security with respect to
which such notice of withdrawal is being submitted, and
(3) the Principal Amount at Maturity, if any, of such Security which
remains subject to the original Purchase Notice or Change in Control
Purchase Notice, as the case may be, and which has been or will be
delivered for purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the form
set forth in the preceding paragraph or may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of Section
3.08(a)(1)(D) or (ii) a conditional withdrawal containing the information set
forth in Section 3.08(a)(1)(D) and the preceding paragraph and contained in a
written notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.
There shall be no purchase of any Securities pursuant to Section 3.08
(other than through the issuance of Common Stock in payment of the Purchase
Price, including cash in lieu of fractional shares) or 3.09 if there has
occurred (prior to, on or after, as the case may be, the
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giving, by the Holders of such Securities, of the required Purchase Notice or
Change in Control Purchase Notice, as the case may be) and is continuing an
Event of Default (other than a default in the payment of the Purchase Price or
Change in Control Purchase Price, as the case may be, with respect to such
Securities). The Paying Agent will promptly return to the respective Holders
thereof any Securities (x) with respect to which a Purchase Notice or Change in
Control Purchase Notice, as the case may be, has been withdrawn in compliance
with this Indenture, or (y) held by it during the continuance of an Event of
Default (other than a default in the payment of the Purchase Price or Change in
Control Purchase Price, as the case may be, with respect to such Securities) in
which case, upon such return, the Purchase Notice or Change in Control Purchase
Notice with respect thereto shall be deemed to have been withdrawn.
SECTION 3.11 Deposit of Purchase Price or Change in Control Purchase
---------------------------------------------------------------------
Price. Prior to 10:00 a.m. (local time in The City of New York) on the Business
-----
Day following the Purchase Date or the Change in Control Purchase Date, as the
case may be, the Company shall deposit with the Trustee or with the Paying Agent
(or, if the Company or a Subsidiary or an Affiliate of either of them is acting
as the Paying Agent, shall segregate and hold in trust as provided in Section
2.04) an amount of money (in immediately available funds if deposited on such
Business Day) or Common Stock, if permitted hereunder, sufficient to pay the
aggregate Purchase Price or Change in Control Purchase Price, as the case may
be, of all the Securities or portions thereof which are to be purchased as of
the Purchase Date or Change in Control Purchase Date, as the case may be.
SECTION 3.12 Securities Purchased in Part. Any Security which is to
------------------------------------------
be purchased only in part shall be surrendered at the office of the Paying Agent
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder in aggregate Principal Amount at Maturity equal to, and in exchange
for, the portion of the Principal Amount at Maturity of the Security so
surrendered which is not purchased.
SECTION 3.13 Covenant to Comply With Securities Laws Upon Purchase of
----------------------------------------------------------------------
Securities. Section 3.08 or 3.09 hereof (provided that such offer or purchase
-----------
constitutes an "issuer tender offer" for purposes of Rule 13e-4 (which term, as
used herein, includes any successor provision thereto) under the Exchange Act at
the time of such offer or purchase), the Company shall (i) comply with Rule 13e-
4 and Rule 14e-1 under the Exchange Act, (ii) file the related Schedule TO (or
any successor schedule, form or report) under the Exchange Act, and (iii)
otherwise comply with all Federal and state securities laws so as to permit the
rights and obligations under Sections 3.08 and 3.09 to be exercised in the time
and in the manner specified in Sections 3.08 and 3.09.
SECTION 3.14 Repayment to the Company. The Trustee and the Paying
--------------------------------------
Agent shall return to the Company any cash or shares of Common Stock that remain
unclaimed as provided in paragraph 13 of the Securities, together with interest
or dividends, if any, thereon (subject to the provisions of Section 7.01(f)),
held by them for the payment of the Purchase Price or Change in Control Purchase
Price, as the case may be; provided, however, that to the extent
33
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that the aggregate amount of cash or shares of Common Stock deposited by the
Company pursuant to Section 3.11 exceeds the aggregate Purchase Price or Change
in Control Purchase Price, as the case may be, of the Securities or portions
thereof which the Company is obligated to purchase as of the Purchase Date or
Change in Control Purchase Date, as the case may be, then promptly after the
Business Day following the Purchase Date or Change in Control Purchase Date, as
the case may be, the Trustee shall return any such excess to the Company
together with interest or dividends, if any, thereon (subject to the provisions
of Section 7.01(f)).
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Securities. The Company shall promptly make
-----------------------------------
all payments in respect of the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture. Any amounts to be
given to the Trustee or Paying Agent, shall be deposited with the Trustee or
Paying Agent by 10:00 a.m. New York City time by the Company. Principal Amount
at Maturity, Restated Principal Amount, Issue Price plus accrued Original Issue
Discount, Redemption Price, Purchase Price, Change in Control Purchase Price and
interest, if any, shall be considered paid on the applicable date due if on such
date (or, in the case of a Purchase Price or Change in Control Purchase Price,
on the Business Day following the applicable Purchase Date or Change in Control
Purchase Date, as the case may be) the Trustee or the Paying Agent holds, in
accordance with this Indenture, money or securities, if permitted hereunder,
sufficient to pay all such amounts then due.
The Company shall, to the extent permitted by law, pay interest on
overdue amounts at the rate per annum set forth in paragraph 1 of the
Securities, compounded semiannually, which interest shall accrue from the date
such overdue amount was originally due to the date payment of such amount,
including interest thereon, has been made or duly provided for. All such
interest shall be payable on demand. The accrual of such interest on overdue
amounts shall be in lieu of, and not in addition to, the continued accrual of
Original Issue Discount.
SECTION 4.02 SEC and Other Reports. The Company shall file with the
-----------------------------------
Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual
report and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. In the event the Company is at any time
no longer subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, it shall continue to provide the Trustee with reports containing
substantially the same information as would have been required to be filed with
the SEC had the Company continued to have been subject to such reporting
requirements. In such event, such reports shall be provided at the times the
Company would have been required to provide reports had it continued to have
been subject to such reporting requirements. The Company also shall comply with
the other provisions of TIA Section 314(a).
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SECTION 4.03 Compliance Certificate. The Company shall deliver to the
------------------------------------
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on February 3, 2001) an Officers'
Certificate, stating whether or not to the best knowledge of the signers 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.
SECTION 4.04 Further Instruments and Acts. Upon request of the
------------------------------------------
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 4.05 Maintenance of Office or Agency. The Company will
---------------------------------------------
maintain in the Borough of Manhattan, The City of New York, an office or agency
of the Trustee, Registrar, Paying Agent and Conversion Agent where Securities
may be presented or surrendered for payment, where Securities may be surrendered
for registration of transfer, exchange, purchase, redemption or conversion and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The office of The Bank of New York, located at
101 Barclay Street, Floor 21 West, New York, New York 10286 (Attention:
Corporate Trust Administration - Trustee Administration), shall initially be
such office or agency for all of the aforesaid purposes. The Company shall give
prompt written notice to the Trustee of the location, and of any change in the
location, of any such office or agency (other than a change in the location of
the office of the Trustee). If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 13.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York, for such purposes.
SECTION 4.06 Delivery. of Certain Information At any time when
----------------------
the Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a holder or any beneficial holder of Securities or shares of Common
Stock issued upon conversion thereof, the Company will promptly furnish or cause
to be furnished Rule 144A Information (as defined below) to such Holder or any
beneficial holder of Securities or holder of shares of Common Stock issued upon
conversion of Securities, or to a prospective purchaser of any such security
designated by any such holder, as the case may be, to the extent required to
permit compliance by such Holder or holder with Rule 144A under the Securities
Act in connection with the resale of any such security. "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act.
SECTION 4.07 Calculation of Original Issue Discount. The Company
----------------------------------------------------
shall file with the Trustee promptly at the end of each calendar year (i) a
written notice specifying the amount of original issue discount (including daily
rates and accrual periods)
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<PAGE>
accrued on Outstanding Securities as of the end of such year and (ii) such other
specific information relating to such original issue discount as may then be
relevant under the Internal Revenue Code of 1986, as amended from time to time.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When Company May Merge or Transfer Assets. The Company
---------------------------------------------------------
shall not consolidate with or merge with or into any other person or convey,
transfer or lease its properties and assets substantially as an entirety to any
person, unless:
(a) either (1) the Company shall be the continuing corporation or (2)
the person (if other than the Company) formed by such consolidation or into
which the Company is merged or the person which acquires by conveyance,
transfer or lease the properties and assets of the Company substantially as
an entirety (i) shall be organized and validly existing under the laws of
the United States or any State thereof or the District of Columbia and (ii)
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all of the
obligations of the Company under the Securities and this Indenture;
(b) immediately after giving effect to such transaction, no Default
shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture, comply with this Article 5 and that all conditions
precedent herein provided for relating to such transaction have been
satisfied.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of the properties and assets of one or more Subsidiaries
(other than to the Company or another Subsidiary), which, if such assets were
owned by the Company, would constitute all or substantially all of the
properties and assets of the Company, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Company.
The successor person formed by such consolidation or into which the
Company is merged or the successor person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company herein; and thereafter, except in
the case of a lease and obligations the Company may have under a supplemental
indenture pursuant to Section 11.14, the Company shall be discharged from all
obligations and covenants under this Indenture and the Securities. Subject to
Section 9.06, the Company, the Trustee and the successor person shall enter into
a supplemental indenture to evidence the succession and substitution of such
successor person and such discharge and release of the Company.
36
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default. An "Event of Default" occurs if:
-------------------------------
(1) after exercise of its option pursuant to Section 10.01 hereof
following a Tax Event, the Company defaults in the payment of interest
upon any Security when such interest becomes due and payable (whether
or not such payment shall be prohibited by the terms of this
Indenture);
(2) the Company defaults in the payment of the Principal Amount at
Maturity (or, if the Securities have been converted to semiannual
coupon notes following a Tax Event pursuant to Article 10, the
Restated Principal Amount), Issue Price plus accrued Original Issue
Discount, Redemption Price, Purchase Price or Change in Control
Purchase Price on any Security when the same becomes due and payable
at its Stated Maturity, upon redemption, upon declaration, when due
for purchase by the Company or otherwise (whether or not any such
payment shall be prohibited by the terms of this Indenture);
(3) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in clauses
(1) and (2) above) and such failure continues for 60 days after
receipt by the Company of a Notice of Default;
(4) (a) failure of the Company to make any payment by the end of any
applicable grace period after maturity of Debt in an amount in excess
of $25,000,000 and continuance of such failure, or (b) the
acceleration of Debt in an amount in excess of $25,000,000 because of
a default with respect to such Debt without such Debt having been
discharged or such acceleration having been cured, waived, rescinded
or annulled, in the case of (a) or (b) above, for a period of 30 days
after receipt by the Company of a Notice of Default; provided,
however, that if any such failure or acceleration referred to in (a)
or (b) above shall cease or be cured, waived, rescinded or annulled,
then the Event of Default by reason thereof shall be deemed not to
have occurred; or
(5) the Company pursuant to or under or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it in an
involuntary case or proceeding or the commencement of any case
against it;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
37
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(D) makes a general assignment for the benefit of its creditors;
(E) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or
(F) consents to the filing of such petition or the appointment of
or taking possession by a Custodian; or
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case or
proceeding, or adjudicates the Company insolvent or bankrupt;
(B) appoints a Custodian of the Company or for any substantial
part of its property; or
(C) orders the winding up or liquidation of the Company;
and the order or decree remains unstayed and in effect for 60 days.
"Bankruptcy Law" means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors.
"Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
A Default under clause (3) or clause (4) above is not an Event of
Default until the Trustee notifies the Company, or the Holders of at least 25%
in aggregate Principal Amount at Maturity of the Securities at the time
outstanding notify the Company and the Trustee, of the Default and the Company
does not cure such Default (and such Default is not waived) within the time
specified in clause (3) or clause (4) above after actual receipt of such notice.
Any such notice must specify the Default, demand that it be remedied and state
that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any event which with
the giving of notice or the lapse of time, or both, would become an Event of
Default under clause (3) or clause (4) above, its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 6.02 Acceleration. If an Event of Default (other than an
--------------------------
Event of Default specified in Section 6.01(5) or (6)) occurs and is continuing,
the Trustee by Notice to the Company, or the Holders of at least 25% in
aggregate Principal Amount at Maturity of the Securities at the time outstanding
by notice to the Company and the Trustee, may declare the Issue Price plus
accrued Original Issue Discount through the date of declaration on all the
Securities to be immediately due and payable. Upon such a declaration, such
Issue Price plus accrued Original Issue Discount shall be due and payable
immediately. If an Event of Default specified in Section 6.01(5) or (6) occurs
and is continuing, the Issue Price plus accrued Original
38
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Issue Discount on all the Securities shall become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Securityholders. The Holders of a majority in aggregate Principal Amount at
Maturity of the Securities at the time outstanding, by notice to the Trustee
(and without notice to any other Securityholder) may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of the Issue Price plus accrued Original Issue Discount that have
become due solely as a result of acceleration and if all amounts due to the
Trustee under Section 7.07 have been paid. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03 Other Remedies. If an Event of Default occurs and is
---------------------------
continuing, the Trustee may pursue any available remedy to collect the payment
of the Issue Price plus accrued Original Issue Discount on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.04 Waiver of Past Defaults. The Holders of a majority in
-------------------------------------
aggregate Principal Amount at Maturity of the Securities at the time
outstanding, by notice to the Trustee (and without notice to any other
Securityholder), may waive an existing Default and its consequences except (1)
an Event of Default described in Section 6.01(1) or (2), (2) a Default in
respect of a provision that under Section 9.02 cannot be amended without the
consent of each Securityholder affected or (3) a Default which constitutes a
failure to convert any Security in accordance with the terms of Article 11. When
a Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right. This Section 6.04
shall be in lieu of Section 316(a)1(B) of the TIA and such Section 316(a)1(B) is
hereby expressly excluded from this Indenture, as permitted by the TIA.
SECTION 6.05 Control by Majority. The Holders of a majority in
---------------------------------
aggregate Principal Amount at Maturity of the Securities at the time outstanding
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust or power conferred on
the Trustee. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee determines in good
faith is unduly prejudicial to the rights of other Securityholders or would
involve the Trustee in personal liability unless the Trustee is offered
indemnity satisfactory to it. This Section 6.05 shall be in lieu of Section
316(a)1(A) of the TIA and such Section 316(a)1(A) is hereby expressly excluded
from this Indenture, as permitted by the TIA.
SECTION 6.06 Limitation on Suits. A Securityholder may not pursue
----------------------------------
any remedy with respect to this Indenture or the Securities unless:
39
<PAGE>
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate Principal Amount at
Maturity of the Securities at the time outstanding make a written
request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee security or indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of such notice, request and offer of security or indemnity;
and
(5) the Holders of a majority in aggregate Principal Amount at
Maturity of the Securities at the time outstanding do not give the
Trustee a direction inconsistent with the request during such 60-day
period.
A Securityholder may not use this Indenture to prejudice the rights of
any other Securityholder or to obtain a preference or priority over any other
Securityholder.
SECTION 6.07 Rights of Holders to Receive Payment. Notwithstanding any
-------------------------------------------------
other provision of this Indenture, the right of any Holder to receive payment of
the Principal Amount at Maturity (or if the Securities have been converted to
semiannual coupon notes following a Tax Event pursuant to Article 10, the
Restated Principal Amount), Issue Price plus accrued Original Issue Discount,
Redemption Price, Purchase Price, Change in Control Purchase Price or interest,
if any, in respect of the Securities held by such Holder, on or after the
respective due dates expressed in the Securities or any Redemption Date, and to
convert the Securities in accordance with Article 11, or to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to convert, shall not be impaired or affected adversely without the consent of
such Holder.
SECTION 6.08 Collection Suit by Trustee. If an Event of Default
----------------------------------------
described in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount owing with respect to the Securities and the
amounts provided for in Section 7.07.
SECTION 6.09 Trustee May File Proofs of Claim. In case of the
---------------------------------------------
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the Principal Amount at Maturity, Issue Price
plus accrued Original Issue Discount, Redemption Price, Purchase Price, Change
in Control Purchase Price or interest, if any, in respect of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of any such amount) shall be entitled and empowered,
by intervention in such proceeding or otherwise,
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<PAGE>
(a) to file and prove a claim for the whole amount of the Principal
Amount at Maturity, Issue Price plus accrued Original Issue Discount,
Redemption Price, Purchase Price, Change in Control Purchase Price, or
interest, if any, 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 or
any other amounts due the Trustee under Section 7.07) and of the
Holders 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
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay 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 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10 Priorities. If the Trustee collects any money pursuant
-------------------------
to this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for the Principal Amount at Maturity, Issue Price plus
accrued Original Issue Discount, Redemption Price, Purchase Price,
Change in Control Purchase Price or interest, if any, as the case may
be, ratably, without preference or priority of any kind, according to
such amounts due and payable on the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and the amount to be paid.
SECTION 6.11 Undertaking for Costs. In any suit for the enforcement
-----------------------------------
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims
41
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or defenses made by the party litigant. This Section 6.11 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in aggregate Principal Amount at Maturity of the
Securities at the time outstanding. This Section 6.11 shall be in lieu of
Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded
from this Indenture, as permitted by the TIA.
SECTION 6.12 Waiver of Stay, Extension or Usury Laws. The Company
-----------------------------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit or
forgive the Company from paying all or any portion of the Principal Amount at
Maturity, Issue Price plus accrued Original Issue Discount, Redemption Price,
Purchase Price or Change in Control Purchase Price in respect of Securities, or
any interest on such amounts, as contemplated herein, or 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 7
TRUSTEE
SECTION 7.01 Duties of Trustee. (a) If an Event of Default has
-------------------------------
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture But in case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture, but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein.
This Section 7.01(b) shall be in lieu of Section 3.15(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
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(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of paragraph (b) of
this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
Subparagraphs (c)(1), (2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any right
or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
(acting in any capacity hereunder) shall be under no liability for interest on
any money received by it hereunder unless otherwise agreed in writing with the
Company.
SECTION 7.02 Rights of Trustee. Subject to its duties and
-------------------------------
responsibilities under the TIA,
(a) the Trustee may conclusively 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) 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,
conclusively rely upon an Officers' Certificate;
(c) 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;
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(d) The Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith which it believes to be authorized or
within its rights or powers conferred under this Indenture;
(e) The Trustee may consult with counsel selected by it and any advice
or Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel.
(f) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby.
(g) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(h) 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
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder; and
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 7.03 Individual Rights of Trustee. The Trustee in its
------------------------------------------
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal
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with the Company or its Affiliates with the same rights it would have if it were
not Trustee. Any Paying Agent, Registrar, Conversion Agent or co-registrar may
do the same with like rights. However, the Trustee must comply with Sections
7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer. The Trustee makes no representation
----------------------------------
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use or application of the proceeds from the
Securities, it shall not be responsible for any statement in the registration
statement for the Securities under the Securities Act or in the Indenture or the
Securities (other than its certificate of authentication), or the determination
as to which beneficial owners are entitled to receive any notices hereunder.
SECTION 7.05 Notice of Defaults. If a Default occurs and if it is
--------------------------------
known to the Trustee, the Trustee shall give to each Securityholder notice of
the Default within 90 days after it occurs unless such Default shall have been
cured or waived before the giving of such notice. Except in the case of a
Default described in Section 6.01(1) or (2), the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Securityholders.
The second sentence of this Section 7.05 shall be in lieu of the proviso to
Section 315(b) of the TIA and such proviso is hereby expressly excluded from
this Indenture, as permitted by the TIA. The Trustee shall not be deemed to have
knowledge of a Default unless a Responsible Officer of the Trustee has received
written notice of such Default.
SECTION 7.06 Reports by Trustee to Holders. Within 60 days after each
-------------------------------------------
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder a brief report dated as of such May 15
that complies with TIA Section 313(a), if required by such Section 313(a). The
Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each securities exchange, if any, on which the
Securities are listed. The Company agrees to promptly notify the Trustee
whenever the Securities become listed on any securities exchange and of any
delisting thereof.
SECTION 7.07 Compensation and Indemnity. The Company agrees:
----------------------------------------
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for
all services rendered by it hereunder (which compensation shall not be
limited (to the extent permitted by law) by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses, advances 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
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(c) to indemnify the Trustee or any predecessor, Trustee and their
agents for, and to hold them harmless against, any loss, damage, claim,
liability, cost or expense (including attorney's fees and taxes (other
than taxes based upon, measured by or determined by 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 this
trust, including the costs and expenses of defending itself against any
claim (whether asserted by the Company or any Holder or any other
Person) or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the Principal
Amount at Maturity, Issue Price plus accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price or interest, if any, as
the case may be, on particular Securities.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(5) or (6), the expenses
including the reasonable charges and expenses of its counsel, are intended to
constitute expenses of administration under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee. The Trustee may resign by so
------------------------------------
notifying the Company; provided, however, no such resignation shall be effective
until a successor Trustee has accepted its appointment pursuant to this Section
7.08. The Holders of a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding may remove the Trustee by so notifying the
Trustee and the Company. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.07.
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If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
SECTION 7.09 Successor Trustee by Merger. If the Trustee consolidates
-----------------------------------------
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall at all
-------------------------------------------
times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The Trustee
(or its parent holding company) shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition. Nothing herein contained shall prevent the Trustee from filing with
the Commission the application referred to in the penultimate paragraph of TIA
Section 310(b).
SECTION 7.11 Preferential Collection of Claims Against Company. The
---------------------------------------------------------------
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
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ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Liability on Securities. When (i) the
--------------------------------------------------
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company deposits with
the Trustee cash or, if expressly permitted by the terms of the Securities,
Common Stock sufficient to pay all amounts due and owing on all outstanding
Securities (other than Securities replaced pursuant to Section 2.07), and if in
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Section 7.07, cease to be of further
effect. The Trustee shall join in the execution of a document prepared by the
Company acknowledging satisfaction and discharge of this Indenture on demand of
the Company accompanied by an Officers' Certificate and Opinion of Counsel and
at the cost and expense of the Company.
SECTION 8.02 Repayment to the Company. The Trustee and the Paying
--------------------------------------
Agent shall return to the Company upon written request any money or securities
held by them for the payment of any amount with respect to the Securities that
remains unclaimed for two years, subject to applicable unclaimed property law.
After return to the Company, Holders entitled to the money or securities must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person and the Trustee and the Paying
Agent shall have no further liability to the Securityholders with respect to
such money or securities for that period commencing after the return thereof.
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders. The Company and the Trustee
----------------------------------------
may amend this Indenture or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5 or Section 11.14;
(3) to provide for uncertificated Securities in addition to
certificated Securities so long as such uncertificated Securities are
in registered form for purposes of the Internal Revenue Code of 1986,
as amended;
(4) to make any change that does not adversely affect the rights of any
Securityholder; or
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(5) to make any change to comply with the TIA, or any amendment
thereto, or to comply with any requirement of the SEC in connection
with the qualification of the Indenture under the TIA.
SECTION 9.02 With Consent of Holders. With the written consent of the
-------------------------------------
Holders of at least a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding, the Company and the Trustee may amend this
Indenture or the Securities. However, without the consent of each Securityholder
affected, an amendment to this Indenture or the Securities may not:
(1) make any change to the Principal Amount at Maturity of Securities
whose Holders must consent to an amendment;
(2) make any change in the manner or rate of accrual in connection with
Original Issue Discount, reduce the rate of interest referred to in
paragraph 1 of the Securities, reduce the rate of interest referred to
in Section 10.01 upon the occurrence of a Tax Event, or extend the time
for payment of Original Issue Discount or interest, if any, on any
Security;
(3) reduce the Principal Amount at Maturity, Restated Principal Amount
or the Issue Price of or extend the Stated Maturity of any Security;
(4) reduce the Redemption Price, Purchase Price or Change in Control
Purchase Price of any Security;
(5) make any Security payable in money or securities other than that
stated in the Security;
(6) make any change in Section 6.04, Section 6.07 or this Section 9.02,
except to increase any percentage set forth therein;
(7) make any change that adversely affects the right to convert any
Security; or
(8) make any change that adversely affects the right to require the
Company to purchase the Securities in accordance with the terms thereof
and this Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
SECTION 9.03 Compliance with Trust Indenture Act. Every supplemental
-------------------------------------------------
indenture executed pursuant to this Article shall comply with the TIA.
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SECTION 9.04 Revocation and Effect of Consents, Waivers and Actions.
--------------------------------------------------------------------
Until an amendment, waiver or other action by Holders becomes effective, a
consent thereto by a Holder of a Security hereunder is a continuing consent by
the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same obligation as the consenting Holder's Security,
even if notation of the consent, waiver or action is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent, waiver or
action as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment, waiver or
action becomes effective. After an amendment, waiver or action becomes
effective, it shall bind every Securityholder.
SECTION 9.05 Notation on or Exchange of Securities. Securities
----------------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 9.06 Trustee to Sign Supplemental Indentures. The Trustee
-----------------------------------------------------
shall sign any supplemental indenture authorized pursuant to this Article 9 if
the amendment contained therein does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign such supplemental indenture. In signing such supplemental indenture
the Trustee shall receive, and (subject to the provisions of Section 7.01) shall
be fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that such amendment is authorized or permitted by this
Indenture.
SECTION 9.07 Effect of Supplemental Indentures. Upon the execution of
-----------------------------------------------
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
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ARTICLE 10
SPECIAL TAX EVENT CONVERSION
SECTION 10.01 Optional Conversion to Semiannual Coupon Note Upon Tax
--------------------------------------------------------------------
Event. From and after (i) the date (the "Tax Event Date") of the occurrence of a
-----
Tax Event and (ii) the date the Company exercises such option, whichever is
later (the "Option Exercise Date"), at the option of the Company, interest in
lieu of future Original Issue Discount shall accrue at the rate of 2.75% per
annum on a restated principal amount per $1,000 original Principal Amount at
Maturity (the "Restated Principal Amount") equal to the Issue Price plus
Original Issue Discount accrued through the Option Exercise Date and shall be
payable semiannually on June 12 and December 12 of each year (each an "Interest
Payment Date") to holders of record at the close of business on May 28 or
November 27 (each a "Regular Record Date") immediately preceding such Interest
Payment Date. Interest will be computed on the basis of a 360-day year comprised
of twelve 30-day months and will accrue from the most recent date on which
interest has been paid or, if no interest has been paid, from the Option
Exercise Date. Within 15 days of the occurrence of a Tax Event, the Company
shall mail a written notice of such Tax Event by facsimile and first-class mail
to the Trustee and within 15 days of its exercise of such option the Company
shall mail a written notice of the Option Exercise Date by facsimile and first-
class mail to the Trustee and by first class mail to the Holders of the
Securities. From and after the Option Exercise Date, (i) the Company shall be
obligated to pay at Stated Maturity, in lieu of the Principal Amount at Maturity
of a Security, the Restated Principal Amount thereof and (ii) "Issue Price and
accrued Original Issue Discount," "Issue Price plus Original Issue Discount" or
similar words, as used herein, shall mean Restated Principal Amount plus accrued
and unpaid interest with respect to any Security. Securities authenticated and
delivered after the Option Exercise Date may, and shall if required by the
Trustee, bear a notation in a form approved by the Trustee as to the conversion
of the Securities to semiannual coupon notes.
SECTION 10.02 Payment of Interest; Interest Rights Preserved. (a)
-------------------------------------------------------------
Interest on any Security that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the person in whose
name that Security is registered at the close of business on the Regular Record
Date for such interest at the office or agency of the Company maintained for
such purpose. Each installment of interest on any Security shall be paid in
same-day funds by transfer to an account maintained by the payee located
inside the United States. In the case of a permanent Global Security, interest
payable on any Interest Payment Date will be paid to the Depositary, with
respect to that portion of such permanent Global Security held for its account
by Cede & Co. for the purpose of permitting such party to credit the interest
received by it in respect of such permanent Global Security to the accounts of
the beneficial owners thereof.
(b) Except as otherwise specified with respect to the Securities, any
interest on any Security that is payable, but is not punctually paid or duly
provided for, within 30 days following on any Interest Payment Date (herein
called "Defaulted Interest", which term shall include any accrued and unpaid
interest that has accrued on such defaulted amount in accordance
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with paragraph 1 of the Securities), shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company,
as its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the persons in whose names the Securities are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date of the
proposed payment (which shall not be less than 20 days after such
notice is received by the Trustee), 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 on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the
persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15
days and not less than 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 of Securities at
his address as it appears on the list of Securityholders maintained
pursuant to Section 2.05 not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the persons in whose names
the Securities are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 2.06,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
ARTICLE 11
CONVERSION
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SECTION 11.01 Conversion Privilege. A Holder of a Security may convert
-----------------------------------
such Security into Common Stock at any time during the period stated in
paragraph 8 of the Securities. The number of shares of Common Stock issuable
upon conversion of a Security per $1,000 of Principal Amount at Maturity thereof
(the "Conversion Rate") shall be that set forth in paragraph 8 in the
Securities, subject to adjustment as herein set forth.
A Holder may convert a portion of the Principal Amount at Maturity of
a Security if the portion is $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to conversion of all of a Security also
apply to conversion of a portion of a Security.
"Quoted Price" means, for any given day, the last reported per share
sale price (or, if no sale price is reported, the average of the bid and ask
prices or, if more than one in either case, the average of the average bid and
average ask prices) on such day of the Common Stock on the New York Stock
Exchange Composite Tape or, in the event shares of Common Stock are not listed
on the New York Stock Exchange, in the composite transactions for such other
national or regional securities exchange upon which the Common Stock is listed,
or, if the shares of Common Stock are not listed on a national or regional
securities exchange, as quoted on the National Association of Securities Dealers
Automated Quotation System or by the National Quotation Bureau Incorporated. In
the absence of such quotations, the Company shall be entitled to determine the
Quoted Price on the basis of such quotations as it considers appropriate.
"Average Quoted Price" means the average of the Quoted Prices of the
Common Stock for the shorter of
(i) 30 consecutive trading days ending on the last full trading day
prior to the Time of Determination with respect to the rights,
warrants or options or distribution in respect of which the Average
Quoted Price is being calculated, or
(ii) the period (x) commencing on the date next succeeding the first
public announcement of (a) the issuance of rights, warrants or options
or (b) the distribution, in each case, in respect of which the Average
Quoted Price is being calculated and (y) proceeding through the last
full trading day prior to the Time of Determination with respect to
the rights, warrants or options or distribution in respect of which
the Average Quoted Price is being calculated (excluding days within
such period, if any, which are not trading days), or
(iii) the period, if any, (x) commencing on the date next succeeding
the Ex-Dividend Time with respect to the next preceding (a) issuance
of rights, warrants or options or (b) distribution, in each case, for
which an adjustment is required by the provisions of Section 11.06(4),
11.07 or 11.08 and (y) proceeding through the last full trading day
prior to the Time of Determination with respect to the rights,
warrants or options or distribution in respect of which the Average
Quoted Price is being calculated (excluding days within such period,
if any, which are not trading days).
In the event that the Ex-Dividend Time (or in the case of a
subdivision, combination or reclassification, the effective date with respect
thereto) with respect to a
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dividend, subdivision, combination or reclassification to which Section
11.06(1), (2), (3) or (5) applies occurs during the period applicable for
calculating "Average Quoted Price" pursuant to the definition in the preceding
sentence, "Average Quoted Price" shall be calculated for such period in a manner
determined by the Board of Directors to reflect the impact of such dividend,
subdivision, combination or reclassification on the Quoted Price of the Common
Stock during such period.
"Time of Determination" means the time and date of the earlier of (i)
the determination of stockholders entitled to receive rights, warrants or
options or a distribution, in each case, to which Section 11.07 or 11.08 applies
and (ii) the time ("Ex-Dividend Time") immediately prior to the commencement of
"ex-dividend" trading for such rights, warrants or options or distribution on
the New York Stock Exchange or such other national or regional exchange or
market on which the Common Stock is then listed or quoted.
SECTION 11.02 Conversion Procedure. To convert a Security a Holder
-----------------------------------
must satisfy the requirements in paragraph 8 of the Securities. The date on
which the Holder satisfies all those requirements is the conversion date (the
"Conversion Date"). As soon as practicable after the Conversion Date, the
Company shall deliver to the Holder, through the Conversion Agent, a certificate
for the number of full shares of Common Stock issuable upon the conversion and
cash in lieu of any fractional share determined pursuant to Section 11.03. The
person in whose name the certificate is registered shall be treated as a
stockholder of record on and after the Conversion Date; provided, however, that
no surrender of a Security on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the person or persons
entitled to receive the shares of Common Stock upon such conversion as the
record holder or holders of such shares of Common Stock on such date, but such
surrender shall be effective to constitute the person or persons entitled to
receive such shares of Common Stock as the record holder or holders thereof for
all purposes at the close of business on the next succeeding day on which such
stock transfer books are open; such conversion shall be at the Conversion Rate
in effect on the date that such Security shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been closed.
Upon conversion of a Security, such person shall no longer be a Holder of such
Security.
No payment or adjustment will be made for dividends on, or other
distributions with respect to, any Common Stock except as provided in this
Article 11. On conversion of a Security, that portion of accrued Original Issue
Discount (or interest, if the Company has exercised its option provided for in
Section 10.01) attributable to the period from the Issue Date (or, if the
Company has exercised the option provided for in Section 10.01, the later of (x)
the date of such exercise and (y) the date on which interest was last paid) of
the Security through the Conversion Date with respect to the converted Security
shall not be cancelled, extinguished or forfeited, but rather shall be deemed to
be paid in full to the Holder thereof through delivery of the Common Stock
(together with the cash payment, if any, in lieu of fractional shares) in
exchange for the Security being converted pursuant to the provisions hereof; and
the fair market value of such shares of Common Stock (together with any such
cash payment in lieu of fractional shares) shall be treated as issued, to the
extent thereof, first in exchange for Original Issue Discount (or interest, if
the Company has exercised its option provided for in Section 10.01) accrued
through the Conversion Date, and the balance, if any, of such fair market value
of such
54
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Common Stock (and any such cash payment) shall be treated as issued in exchange
for the Issue Price of the Security being converted pursuant to the provisions
hereof.
If the Holder converts more than one Security at the same time, the
number of shares of Common Stock issuable upon the conversion shall be based on
the total Principal Amount at Maturity of the Securities converted.
If the last day on which a Security may be converted is a Legal
Holiday, the Security may be surrendered on the next succeeding day that is not
a Legal Holiday.
Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Security in an authorized denomination equal in Principal Amount at Maturity
to the unconverted portion of the Security surrendered.
SECTION 11.03 Fractional Shares. The Company will not issue a
--------------------------------
fractional share of Common Stock upon conversion of a Security. Instead, the
Company will deliver cash for the current market value of the fractional share.
The current market value of a fractional share shall be determined, to the
nearest 1/1,000th of a share, by multiplying the Sale Price, on the last trading
day prior to the Conversion Date, of a full share by the fractional amount and
rounding the product to the nearest whole cent.
SECTION 11.04 Taxes on Conversion. If a Holder converts a Security,
----------------------------------
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on the issue of shares of Common Stock upon the conversion. However, the
Holder shall pay any such tax which is due because the Holder requests the
shares to be issued in a name other than the Holder's name. The Conversion Agent
may refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder's name until the Conversion Agent
receives a sum sufficient to pay any tax which will be due because the shares
are to be issued in a name other than the Holder's name. Nothing herein shall
preclude any tax withholding required by law or regulations.
SECTION 11.05 Company to Provide Stock. The Company shall, prior to
---------------------------------------
issuance of any Securities under this Article 11, and from time to time as may
be necessary, reserve out of its authorized but unissued Common Stock a
sufficient number of shares of Common Stock to permit the conversion of the
Securities.
All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable, subject to Wis. Stat. (S)180.0622(2)(b)
and shall be free from preemptive rights and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all federal and
state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Securities, if any, and will list or cause to have
quoted such shares of Common Stock on each national securities exchange or in
the over-the-counter market or such other market on which the Common Stock is
then listed or quoted.
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SECTION 11.06 Adjustment for Change In Capital Stock. If, after the
-----------------------------------------------------
Issue Date of the Securities, the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
(4) pays a dividend or makes a distribution on its Common Stock in
shares of its Capital Stock (other than Common Stock or rights,
warrants or options for its Capital Stock); or
(5) issues by reclassification of its Common Stock any shares of its
Capital Stock (other than rights, warrants or options for its Capital
Stock), then the conversion privilege and the Conversion Rate in
effect immediately prior to such action shall be adjusted so that the
Holder of a Security thereafter converted may receive the number of
shares of Capital Stock of the Company which such Holder would have
owned immediately following such action if such Holder had converted
the Security immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security upon conversion of such
Security may receive shares of two or more classes of Capital Stock of the
Company, the Conversion Rate shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated by this Article 11 with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article 11.
SECTION 11.07 Adjustment for Rights Issue. If after the Issue Date
------------------------------------------
of the Securities, the Company distributes any rights, warrants or options to
all holders of its Common Stock entitling them, for a period expiring within 60
days after the record date for such distribution, to purchase shares of Common
Stock at a price per share less than the Quoted Price as of the Time of
Determination, the Conversion Rate shall be adjusted in accordance with the
formula:
R' = R x (O + N)
---------------
(O + (N x P)/M)
where:
R' = the adjusted Conversion Rate.
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R = the current Conversion Rate.
O = the number of shares of Common Stock outstanding on the record date
for the distribution to which this Section 11.07 is being applied.
N = the number of additional shares of Common Stock offered pursuant to
the distribution.
P = the offering price per share of the additional shares.
M = the Average Quoted Price, minus, in the case of (i) a distribution to
which Section 11.06(4) applies or (ii) a distribution to which Section 11.08
applies, for which, in each case, (x) the record date shall occur on or before
the record date for the distribution to which this Section 11.07 applies and (y)
the Ex-Dividend Time shall occur on or after the date of the Time of
Determination for the distribution to which this Section 11.07 applies, the fair
market value (on the record date for the distribution to which this Section
11.07 applies) of the
(1) Capital Stock of the Company distributed in respect of each share
of Common Stock in such Section 11.06(4) distribution and
(2) assets of the Company or debt securities or any rights, warrants
or options to purchase securities of the Company distributed in
respect of each share of Common Stock in such Section 11.08
distribution.
The Board of Directors shall determine fair market values for the purposes
of this Section 11.07.
The adjustment shall become effective immediately after the record
date for the determination of shareholders entitled to receive the rights,
warrants or options to which this Section 11.07 applies. If all of the shares of
Common Stock subject to such rights, warrants or options have not been issued
when such rights, warrants or options expire, then the Conversion Rate shall
promptly be readjusted to the Conversion Rate which would then be in effect had
the adjustment upon the issuance of such rights, warrants or options been made
on the basis of the actual number of shares of Common Stock issued upon the
exercise of such rights, warrants or options.
No adjustment shall be made under this Section 11.07 if the
application of the formula stated above in this Section 11.07 would result in a
value of R' that is equal to or less than the value of R.
SECTION 11.08 Adjustment for Other Distributions. If, after the
-------------------------------------------------
Issue Date of the Securities, the Company distributes to all holders of its
Common Stock any of its assets, or debt securities or any rights, warrants or
options to purchase securities of the Company (including securities or cash, but
excluding (x) distributions of Capital Stock referred to in Section 11.06 and
distributions of rights, warrants or options referred to in Section 11.07 and
(y) cash dividends or other cash distributions that are paid out of consolidated
current net earnings or earnings retained in the business as shown on the books
of the Company unless such cash dividends or other cash distributions are
Extraordinary Cash Dividends) the Conversion Rate
57
<PAGE>
shall be adjusted, subject to the provisions of the last paragraph of this
Section 11.08, in accordance with the formula:
R' = R x M
------
M-F
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Quoted Price, minus, in the case of a distribution to
which Section 11.06(4) applies, for
which (i) the record date shall occur on or before the record date for the
distribution to which this Section 11.08 applies and (ii) the Ex-Dividend
Time shall occur on or after the date of the Time of Determination for the
distribution to which this Section 11.08 applies, the fair market value (on
the record date for the distribution to which this Section 11.08 applies)
of any Capital Stock of the Company distributed in respect of each share of
Common Stock in such Section 11.06(4) distribution.
F = the fair market value (on the record date for the distribution to
which this Section 11.08 applies) of the assets, securities, rights, warrants or
options to be distributed in respect of each share of Common Stock in the
distribution to which this Section 11.08 is being applied (including, in the
case of cash dividends or other cash distributions giving rise to an adjustment,
all such cash distributed concurrently).
The Board of Directors shall determine fair market values for the purposes
of this Section 11.08.
The adjustment shall become effective immediately after the record
date for the determination of shareholders entitled to receive the distribution
to which this Section 11.08 applies.
For purposes of this Section 11.08, the term "Extraordinary Cash
Dividend" shall mean any cash dividend with respect to the Common Stock the
amount of which, together with the aggregate amount of cash dividends on the
Common Stock to be aggregated with such cash dividend in accordance with the
provisions of this paragraph, equals or exceeds the threshold percentage set
forth in item (i) below. For purposes of item (i) below, the "Measurement
Period" with respect to a cash dividend on the Common Stock shall mean the 365
consecutive day period ending on the date prior to the Ex-Dividend Time with
respect to such cash dividend, and the "Relevant Cash Dividends" with respect to
a cash dividend on the Common Stock shall mean the cash dividends on the Common
Stock with Ex-Dividend Times occurring in the Measurement Period.
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(i) If, upon the date prior to the Ex-Dividend Time with respect a
cash dividend on the Common Stock, the aggregate amount of such cash
dividend together with the amounts of all Relevant Cash Dividends
equals or exceeds on a per share basis 10% of the Sale Price of the
Common Stock on the last trading day preceding the date of declaration
by the Board of Directors of the cash dividend with respect to which
this provision is being applied, then such cash dividend together with
all Relevant Cash Dividends, shall be deemed to be an Extraordinary
Cash Dividend and for purposes of applying the formula set forth above
in this Section 11.08, the value of "F" shall be equal to (y) the
aggregate amount of such cash dividend together with the amount of all
Relevant Cash Dividends, minus (z) the aggregate amount of all
Relevant Cash Dividends for which a prior adjustment in the Conversion
Rate was previously made under this Section 11.08.
In making the determinations required by item (i) above, the amount of
cash dividends paid on a per share basis and the amount of any
Relevant Cash Dividends specified in item (i) above, shall be
appropriately adjusted to reflect the occurrence during such period of
any event described in Section 11.06.
In the event that, with respect to any distribution to which this
Section 11.08 would otherwise apply, the difference "M-F" as defined in the
above formula is less than $1.00 or "F" is equal to or greater than "M", then
the adjustment provided by this Section 11.08 shall not be made and in lieu
thereof the provisions of Section 11.14 shall apply to such distribution.
SECTION 11.09 When Adjustment May Be Deferred. No adjustment in the
----------------------------------------------
Conversion Rate need be made unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Rate. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article 11 shall be made to the nearest
cent or to the nearest 1/1,000th of a share, as the case may be.
SECTION 11.10 When No Adjustment Required. No adjustment need be
------------------------------------------
made for a transaction referred to in Section 11.06, 11.07, 11.08 or 11.14 if
Securityholders are to participate in the transaction on a basis and with notice
that the Board of Directors determines to be fair and appropriate in light of
the basis and notice on which holders of Common Stock participate in the
transaction. Such participation by Securityholders may include participation
upon conversion provided that an adjustment shall be made at such time as the
Securityholders are no longer entitled to participate.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
To the extent the Securities become convertible pursuant to this
Article 11 into cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.
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SECTION 11.11 Notice of Adjustment. Whenever the Conversion Rate is
-----------------------------------
adjusted, the Company shall promptly mail to Securityholders a notice of the
adjustment. The Company shall file with the Trustee and the Conversion Agent
such notice and a certificate from the Company's independent public accountants
briefly stating the facts requiring the adjustment and the manner of computing
it. The certificate shall be conclusive evidence that the adjustment is correct.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate except to exhibit the same
to any Holder desiring inspection thereof.
SECTION 11.12 Voluntary Increase. The Company from time to time may
---------------------------------
increase the Conversion Rate by any amount for any period of time. Whenever the
Conversion Rate is increased, the Company shall mail to Securityholders and file
with the Trustee and the Conversion Agent a notice of the increase. The Company
shall mail the notice at least 15 days before the date the increased Conversion
Rate takes effect. The notice shall state the increased Conversion Rate and the
period it will be in effect.
A voluntary increase of the Conversion Rate does not change or adjust
the Conversion Rate otherwise in effect for purposes of Section 11.06, 11.07 or
11.08.
SECTION 11.13 Notice of Certain Transactions. If:
----------------------------------------------
(1) the Company takes any action that would require an adjustment in
the Conversion Rate pursuant to Section 11.06, 11.07 or 11.08 (unless
no adjustment is to occur pursuant to Section 11.10); or
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 11.14; or
(3) there is a liquidation or dissolution of the Company;
then the Company shall mail to Securityholders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, binding share exchange, transfer,
liquidation or dissolution. The Company shall file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in
it shall not affect the validity of the transaction.
SECTION 11.14 Reorganization of Company; Special Distributions. If
---------------------------------------------------------------
the Company is a party to a transaction subject to Section 5.01 (other than a
sale of all or substantially all of the assets of the Company in a transaction
in which the holders of Common Stock immediately prior to such transaction do
not receive securities, cash or other assets of the Company or any other person)
or a merger or binding share exchange which reclassifies or changes its
outstanding Common Stock, the person obligated to deliver securities, cash or
other assets upon conversion of Securities shall enter into a supplemental
indenture. If the issuer of securities deliverable upon conversion of Securities
is an Affiliate of the successor Company, that issuer shall join in the
supplemental indenture.
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The supplemental indenture shall provide that the Holder of a Security
may convert it into the kind and amount of securities, cash or other assets
which such Holder would have received immediately after the consolidation,
merger, binding share exchange or transfer if such Holder had converted the
Security immediately before the effective date of the transaction, assuming (to
the extent applicable) that such Holder (i) was not a constituent person or an
Affiliate of a constituent person to such transaction; (ii) made no election
with respect thereto; and (iii) was treated alike with the plurality of non-
electing Holders. The supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practical to the adjustments provided
for in this Article 11. The successor Company shall mail to Securityholders a
notice briefly describing the supplemental indenture.
If this Section applies, neither Section 11.06 nor 11.07 applies.
If the Company makes a distribution to all holders of its Common Stock
of any of its assets, or debt securities or any rights, warrants or options to
purchase securities of the Company that, but for the provisions of the last
paragraph of Section 11.08, would otherwise result in an adjustment in the
Conversion Rate pursuant to the provisions of Section 11.08, then, from and
after the record date for determining the holders of Common Stock entitled to
receive the distribution, a Holder of a Security that converts such Security in
accordance with the provisions of this Indenture shall upon such conversion be
entitled to receive, in addition to the shares of Common Stock into which the
Security is convertible, the kind and amount of securities, cash or other assets
comprising the distribution that such Holder would have received if such Holder
had converted the Security immediately prior to the record date for determining
the holders of Common Stock entitled to receive the distribution.
SECTION 11.15 Company Determination Final. Any determination that
------------------------------------------
the Company or the Board of Directors must make pursuant to Section 11.03,
11.06, 11.07, 11.08, 11.09, 11.10, 11.14 or 11.17 is conclusive.
SECTION 11.16 Trustee's Adjustment Disclaimer. The Trustee has no
----------------------------------------------
duty to determine when an adjustment under this Article 11 should be made, how
it should be made or what it should be. The Trustee has no duty to determine
whether a supplemental indenture under Section 11.14 need be entered into or
whether any provisions of any supplemental indenture are correct. The Trustee
shall not be accountable for and makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities. The
Trustee shall not be responsible for the Company's failure to comply with this
Article 11. Each Conversion Agent shall have the same protection under this
Section 11.16 as the Trustee.
SECTION 11.17 Simultaneous Adjustments. In the event that this
---------------------------------------
Article 11 requires adjustments to the Conversion Rate under more than one of
Sections 11.06(4), 11.07 or 11.08, and the record dates for the distributions
giving rise to such adjustments shall occur on the same date, then such
adjustments shall be made by applying, first, the provisions of Section 11.06,
second, the provisions of Section 11.08 and, third, the provisions of Section
11.07.
SECTION 11.18 Successive Adjustments. After an adjustment to the
-------------------------------------
Conversion Rate under this Article 11, any subsequent event requiring an
adjustment under this Article 11 shall cause an adjustment to the Conversion
Rate as so adjusted.
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SECTION 11.19 Rights Issued in Respect of Common Stock Issued Upon
-------------------------------------------------------------------
Conversion. Each share of Common Stock issued upon conversion of Securities
----------
pursuant to this Article 11 shall be entitled to receive the appropriate number
of common stock or preferred stock purchase rights, as the case may be (the
"Rights"), if any, and the certificates representing the Common Stock issued
upon such conversion shall bear such legends, if any, in each case as may be
provided by the terms of any shareholder rights agreement adopted by the
Company, as the same may be amended from time to time (in each case, a "Rights
Agreement"). Provided that such Rights Agreement requires that each share of
Common Stock issued upon conversion of Securities at any time prior to the
distribution of separate certificates representing the Rights be entitled to
receive such Rights, then, notwithstanding anything else to the contrary in this
Article 11, there shall not be any adjustment to the conversion privilege or
Conversion Rate as a result of the issuance of Rights, the distribution of
separate certificates representing the Rights, the exercise or redemption of
such Rights in accordance with any such Rights Agreement, or the termination or
invalidation of such Rights.
ARTICLE 12
SUBORDINATION
SECTION 12.01 Securities Subordinate to Senior Indebtedness. The
------------------------------------------------------------
Company covenants and agrees, and each Holder of a Security, by his acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article 12, the indebtedness represented by the
Securities and the payment of the Principal Amount at Maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, cash in respect of Purchase
Price, cash in respect of a conversion, Change in Control Purchase Price and
interest, if any, in respect of each and all of the Securities are hereby
expressly made subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness of the Company, as the case may be.
SECTION 12.02 Payment over of Proceeds upon Dissolution, Etc. Upon
-------------------------------------------------------------
any distribution of assets of the Company in the event of:
(a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its
respective creditors, as such, or to its respective assets, or
(b) any liquidation, dissolution or other winding-up of the Company,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or
(c) any assignment for the benefit of creditors or any other
marshaling of assets and liabilities of the Company, or
(d) any other event that would constitute an Event of Default
specified in Section 6.01(5) or 6.01(6),
then, and in any such event, the holders of Senior Indebtedness shall be
entitled to receive:
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(1) payment in full in cash of all amounts due or to become due on or
in respect of all Senior Indebtedness in cash or cash equivalents, or
provision shall be made for such payment, before the Holders of the
Securities are entitled to receive any payment on account of the Principal
Amount at Maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, cash in respect of the Purchase Price, cash in respect of
a conversion, Change of Control Purchase Price or interest, if any, in
respect of the Securities, and
(2) any payment or distribution of any kind or character, whether in
cash, property or securities, which may be payable or deliverable in
respect of the Securities in any such case, proceeding, dissolution,
liquidation or other winding up or event, including any such payment or
distribution which may be payable or deliverable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment
of the Securities.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other indebtedness of the Company being subordinated to the payment of the
Securities, before all Senior Indebtedness is paid in full in cash or payment
thereof provided for, and if such fact shall, at or prior to the time of such
payment or distribution, have been made known to the Trustee or, as the case may
be, such Holder, then, in such event, such payment or distribution shall be paid
over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, Custodian, assignee, agent or other Person making payment or
distribution of assets of the Company for application to the payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full in cash or as payment thereof is otherwise provided for (as
such phrase is defined below), after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
For purposes of this Article 12 only, the words "cash, property or
securities" shall not be deemed to include shares of Capital Stock of the
Company, as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan or reorganization or readjustment the payment
of which is subordinated, at least to the extent provided in this Article 12
with respect to the Securities, to the payment of all Senior Indebtedness which
may at the time be outstanding; provided, however, that (i) Senior Indebtedness
-------- -------
is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of the Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment.
The consolidation or share exchange 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 5 shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of the Company for the purposes of this Section if the person
formed by such consolidation or share exchange or into which the Company is
merged or the person which
63
<PAGE>
acquires by conveyance or transfer such properties and assets of the Company, as
the case may be, substantially as an entirety, as the case may be, shall as part
of such consolidation, share exchange, merger, conveyance or transfer, comply
with the conditions set forth in Article 5.
SECTION 12.03 Acceleration of Securities. In the event that any
-----------------------------------------
Securities are declared due and payable before their Stated Maturity pursuant to
Section 6.02, then and in such event the Company shall promptly notify holders
of Senior Indebtedness of such acceleration. The Company may not pay the
Securities until the earlier of (i) 120 or more days have passed after such
acceleration occurs or (ii) the payment in full of all Senior Indebtedness or as
payment thereof is otherwise provided for (as such phrase is defined below), and
may thereafter pay the Securities if this Indenture permits the payment at that
time.
In the event that, notwithstanding the foregoing, (a) the Company
shall make any payment to the Trustee or the Holder of any Securities prohibited
by the foregoing provisions of this Section 12.03, and (b) with respect to any
payment made before 120 or more days have passed after such acceleration occurs
if such facts 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 by or on
behalf of the person holding such payment for the benefit of the holders of
Senior Indebtedness.
The provisions of this Section 12.03 shall not apply to any payment
with respect to which Section 12.02 would be applicable.
SECTION 12.04 Default on Senior Indebtedness. The Company may not
---------------------------------------------
make any payment of the Principal Amount at Maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Change of Control Purchase Price or
interest, if any, in respect of the Securities and may not pay cash with respect
to the Purchase Price (or portion thereof) or cash in respect of a conversion of
any Security or otherwise acquire any Securities for cash or property if:
(1) any payment default on any Senior Indebtedness has occurred and is
continuing beyond any applicable grace period with respect thereto; or
(2) a default (other than a default referred to in the preceding
clause (1)) on any Senior Indebtedness occurs and is continuing that
permits holders of such Senior Indebtedness to accelerate the maturity
thereof and the default is the subject of judicial proceedings or the
Company receives a notice of default thereof from any person who may give
such notice pursuant to the instrument evidencing or document governing
such Senior Indebtedness.
If the Company receives any such notice, then a similar notice received within
nine months thereafter relating to the same default on the same issue of Senior
Indebtedness shall not be effective for purposes of this Section 12.04.
The Company may resume payment on the Securities and may acquire
Securities if and when:
64
<PAGE>
(a) the default referred to above is cured or waived as provided or
permitted in accordance with the terms of the applicable Senior
Indebtedness; or
(b) in the case of a default referred to in clause (2) of the
preceding paragraph, 179 or more days pass after the receipt by the Company
of the notice described in clause (2) above; and
this Indenture otherwise permits the payment or acquisition at that time;
provided, however, that with respect to payments made after the 179-day period
-------- -------
referred to in clause (b) of this Section 12.04, the Trustee or the Holder of
any Securities shall pay over and deliver forthwith to the Company for the
benefit of the holders of Senior Indebtedness any amounts received by the
Trustee or any such Holder to the extent necessary to pay all holders of Senior
Indebtedness in full in cash or otherwise provide for such payment thereof (as
such phrase is defined above).
In the event that, notwithstanding the foregoing, (a) the Company
shall make any payment to the Trustee or the Holder of any Security prohibited
by the foregoing provisions of this Section, and (b) with respect to any payment
made after the expiration of the 179-day period if such fact shall then have
been made known to the Trustee or, as the case may be, such Holder, then and in
such event such payment shall (to the extent permitted by law) be paid over and
delivered forthwith to the Company by or on behalf of the person holding such
payment for the benefit of the holders of the Senior Indebtedness.
The provisions of this Section shall not apply to any payment with
respect to which Section 12.02 would be applicable.
SECTION 12.05 Payment Permitted If No Default. Nothing contained in
----------------------------------------------
this Article 12 or elsewhere in this Indenture or in any of the Securities shall
prevent (a) the Company at any time except during the pendency of any case,
proceeding, dissolution, liquidation or other winding up, assignment for the
benefit of creditors or other marshaling of assets and liabilities of the
Company referred to in Section 12.02 or under the conditions described in
Section 12.03 or 12.04, from making payments at any time of Principal Amount at
Maturity, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price, Change of Control Purchase Price or interest, if any, as the
case may be, in respect of the Securities if the Trustee did not, at the time of
such application, have actual knowledge that such payment would have been
prohibited by the provisions of this Article 12 or (b) the application by the
Trustee of any money deposited with it hereunder to payment of or on account of
the Principal Amount at Maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Purchase Price, Change in Control Purchase Price or interest,
if any, as the case may be, in respect of the Securities or the retention of
such payment by the Holders of the Securities, if, at the time of such
application by the Trustee, the Trustee did not have actual knowledge that such
payment would have been prohibited by the provisions of this Article 12.
SECTION 12.06 Subrogation to Rights of Holders of Senior
---------------------------------------------------------
Indebtedness. Subject to payment in full of all Senior Indebtedness to the
------------
extent and in the manner set forth in this Article 12, the Holders of the
Securities 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 12 (equally and ratably with the holders of all indebtedness of the
Company which by its
65
<PAGE>
express terms is subordinated to indebtedness of the Company to substantially
the same extent as the Securities are subordinated and is entitled to like
rights of subrogation) to the rights of the holders of such Senior Indebtedness
to receive payments or distributions of cash, property and securities applicable
to the Senior Indebtedness until the Principal Amount at Maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price, Change of
Control Purchase Price or interest, if any, as the case may be, in respect of
the Securities 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 the Securities or the Trustee
would be entitled except for the provisions of this Article 12, and no payments
over pursuant to the provisions of this Article 12 to the holders of Senior
Indebtedness by Holders of the Securities or the Trustee, shall, as among the
Company, the creditors of the Company, other than holders of Senior Indebtedness
and the Holders of the Securities, be deemed to be a payment or distribution by
the Company to or on account of the Senior Indebtedness.
SECTION 12.07 Provisions Solely to Define Relative Rights. The
----------------------------------------------------------
provisions of this Article 12 are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of Senior Indebtedness, on the other hand. Nothing contained in
this Article 12 or elsewhere in this Indenture or in the Securities is intended
to or shall (a) impair, as among the Company, the creditors of the Company other
than holders of Senior Indebtedness and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Securities the Principal Amount at Maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Purchase Price, Change of Control
Purchase Price or interest, if any, as the case may be, in respect of the
Securities as and when the same shall become due and payable in accordance with
the terms of the Securities and this Indenture; or (b) affect the relative
rights against the Company of the Holders of the Securities and creditors of the
Company other than the holders of Senior Indebtedness; or (c) prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 12 of the holders of Senior Indebtedness to
receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
SECTION 12.08 Trustee to Effectuate Subordination. Each Holder of a
--------------------------------------------------
Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article 12 and appoints the Trustee his attorney-
in-fact for any and all such purposes.
SECTION 12.09 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
by any such holder, or by any non-compliance 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 the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article 12
or
66
<PAGE>
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew, increase
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; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 12.10 Notice to Trustee. The Company shall 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 the Securities. Notwithstanding the provisions of this Article 12 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 the Securities, unless and until the
Trustee shall have received written notice thereof from the Company, or a holder
of Senior Indebtedness or from any trustee therefor; and, prior to the receipt
of any such written notice, the Trustee shall be entitled in all respects to
assume that no such facts exist.
The Trustee shall be entitled to conclusively 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 12, 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 12, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 12.11 Reliance on Judicial Order or Certificate of
-----------------------------------------------------------
Liquidating Agent. Upon any payment or distribution of assets of the Company
-----------------
referred to in this Article 12, the Trustee and the Holders of the Securities
shall be entitled to rely upon any final, nonappealable 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,
liquidating trustee, Custodian, receiver, assignee for the benefit of creditors,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of Securities, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
the Senior Indebtedness and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 12.
SECTION 12.12 Trustee Not Fiduciary for Holders of Senior
----------------------------------------------------------
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
------------
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or
67
<PAGE>
distribute to Holders of Securities or to the Company or to any other person
cash, property or securities to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article 12 or otherwise. The Trustee shall not be
charged with knowledge of the existence of Senior Indebtedness or of any facts
that would prohibit any payment hereunder or that would permit the resumption of
any such payment unless a Responsible Officer of the Trustee shall have received
notice to that effect at the address of the Trustee set forth in Section 13.02.
With respect to the holders of Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants or obligations as are
specifically set forth in this Article 12 and no implied covenants or
obligations with respect to holders of Senior Indebtedness shall be read into
this Indenture against the Trustee.
SECTION 12.13 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 12 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 7.07.
SECTION 12.14 Article 12 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
12 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 12 in
addition to or in place of the Trustee; provided, however, that Sections 12.10
and 12.12 shall not apply to the Company or an Affiliate of the Company if the
Company or any such Affiliate acts as Paying Agent.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act Controls. If any provision of this
-------------------------------------------
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02 Notices. Any request, demand, authorization, notice,
----------------------
waiver, consent or communication shall be in writing and delivered in person or
mailed by first-class mail, postage prepaid, addressed as follows or transmitted
by facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:
if to the Company:
Kohl's Corporation
N56 W17000 Ridgewood Drive
Menomonee Falls, WI 53051
68
<PAGE>
Telephone No. (262) 703-1646
Facsimile No. (262) 703-6143
Attention: Chief Financial Officer
if to the Trustee:
The Bank of New York
101 Barclay Street,
Floor 21 West
New York, New York 10286
Telephone No. 212-815-2565
Facsimile No. 212-815-5915
Attention: Corporate Trust Administration
The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Securityholder shall be mailed
to the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the Securityholders,
it shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
SECTION 13.03 Communication by Holders with Other Holders.
----------------------------------------------------------
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.
-----------------------------------------------------------------
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
69
<PAGE>
SECTION 13.05 Statements Required in Certificate or Opinion. Each
------------------------------------------------------------
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that each person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in
such Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable such
person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement that, in the opinion of such person, such covenant or
condition has been complied with.
SECTION 13.06 Separability Clause. In case any provision in this
----------------------------------
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 13.07 Rules by Trustee, Paying Agent, Conversion Agent and
-------------------------------------------------------------------
Registrar. The Trustee may make reasonable rules for action by or a meeting of
---------
Securityholders. The Registrar, Conversion Agent and the Paying Agent may make
reasonable rules for their functions.
SECTION 13.08 Legal Holidays. A "Legal Holiday" is any day other
-----------------------------
than a Business Day. If any specified date (including a date for giving notice)
is a Legal Holiday, the action shall be taken on the next succeeding day that is
not a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Securities, no Original Issue Discount or interest, if any, shall
accrue for the intervening period.
SECTION 13.09 GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL
----------------------------
GOVERN THIS INDENTURE AND THE SECURITIES.
SECTION 13.10 No Recourse Against Others. A director, officer,
-----------------------------------------
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 13.11 Successors. All agreements of the Company in this
-------------------------
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
70
<PAGE>
SECTION 13.12 Multiple Originals. The parties may sign any number of
---------------------------------
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first above written.
KOHL'S CORPORATION
By: /s/ R. Lawrence Montgomery
-------------------------------
Name: R. Lawrence Montgomery
Title: Vice Chairman and
Chief Executive Officer
THE BANK OF NEW YORK
By /s/ Stephen J. Giurlando
-------------------------------
Name: Stephen J. Giurlando
Title: Vice Predsident
71
<PAGE>
EXHIBIT A-1
[FORM OF FACE OF GLOBAL SECURITY]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF PRINCIPAL AMOUNT AT
MATURITY OF THIS SECURITY IS $420.88, THE ISSUE DATE IS June 12, 2000, THE YIELD
TO MATURITY IS 2 3/4%.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH KOHL'S CORPORATION (THE
"COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE
<PAGE>
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) 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, (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (E) IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (C), (E) OR (F) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED
BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
[THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF
THE CONDITIONS SPECIFIED IN THE INDENTURE.]
<PAGE>
KOHL'S CORPORATION
Liquid Yield Option(TM) Note due 2020
(Zero Coupon-Subordinated)
No. R-1 CUSIP: 500255AG9
Issue Date: June 12, 2000 Original Issue Discount: $420.88
Issue Price: $579.12 (for each $1,000 Principal
(for each $1,000 Principal Amount at Maturity)
Amount at Maturity)
KOHL'S CORPORATION, a Wisconsin corporation, promises to pay to Cede & Co.
or registered assigns, the Principal Amount at Maturity of FOUR HUNDRED MILLION
DOLLARS ($400,000,000) on June 12, 2020.
This Security shall not bear interest except as specified on the other side
of this Security. Original Issue Discount will accrue as specified on the other
side of this Security. This Security is convertible as specified on the other
side of this Security.
Additional provisions of this Security are set forth on the other side of
this Security.
Dated: _____________ KOHL'S CORPORATION
By
------------------------
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this
is one of the Securities referred
to in the within-mentioned Indenture.
By ________________________
Authorized Signatory
Dated: ________________________
<PAGE>
KOHL'S CORPORATION
Liquid Yield Option(TM) Note
due 2020 (Zero Coupon-Subordinated)
No. R-2 CUSIP: 500255AG9
Issue Date: June 12, 2000 Original Issue Discount: $420.88
Issue Price: $579.12 (for each $1,000 Principal
(for each $1,000 Principal Amount at Maturity)
Amount at Maturity)
KOHL'S CORPORATION, a Wisconsin corporation, promises to pay to Cede & Co.
or registered assigns, the Principal Amount at Maturity of ONE HUNDRED AND
TWENTY MILLION DOLLARS ($120,000,000) on June 12, 2020.
This Security shall not bear interest except as specified on the other side
of this Security. Original Issue Discount will accrue as specified on the other
side of this Security. This Security is convertible as specified on the other
side of this Security.
Additional provisions of this Security are set forth on the other side of
this Security.
Dated: _____________ KOHL'S CORPORATION
By
-----------------------------
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this
is one of the Securities referred
to in the within-mentioned Indenture.
By
________________________
Authorized Signatory
Dated: ________________________
<PAGE>
[FORM OF REVERSE SIDE OF LYON]
Liquid Yield Option(TM) Note Due 2020
(Zero Coupon-Subordinated)
1. Interest.
This Security shall not bear interest, except as specified in this
paragraph or in paragraph 10 hereof. If the Principal Amount at Maturity hereof
or any portion of such Principal Amount at Maturity is not paid when due
(whether upon acceleration pursuant to Section 6.02 of the Indenture, upon the
date set for payment of the Redemption Price pursuant to paragraph 5 hereof,
upon the date set for payment of the Purchase Price or Change in Control
Purchase Price pursuant to paragraph 6 hereof or upon the Stated Maturity of
this Security) or if interest due hereon or any portion of such interest is not
paid when due in accordance with paragraph 10 hereof, then in each such case the
overdue amount shall, to the extent permitted by law, bear interest at the rate
of 2.75% per annum, compounded semiannually, which interest shall accrue from
the date such overdue amount was originally due to the date payment of such
amount, including interest thereon, has been made or duly provided for. All such
interest shall be payable on demand. The accrual of such interest on overdue
amounts shall be in lieu of, and not in addition to, the continued accrual of
Original Issue Discount.
Original Issue Discount (the difference between the Issue Price and the
Principal Amount at Maturity of the Security), in the period during which a
Security remains outstanding, shall accrue at 2.75% per annum, on a semiannual
bond equivalent basis using a 360-day year composed of twelve 30-day months,
from the Issue Date of this Security.
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of Redemption Prices, Purchase Prices, Change in Control
Purchase Prices and at Stated Maturity to Holders who surrender Securities to a
Paying Agent to collect such payments in respect of the Securities. The Company
will pay cash amounts in money of the United States that at the time of payment
is legal tender for payment of public and private debts. However, the Company
may make such cash payments by check payable in such money.
3. Paying Agent, Conversion Agent and Registrar.
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent, Conversion Agent and Registrar. The
Company may appoint and change any Paying Agent, Conversion Agent, Registrar or
co-registrar without notice, other than notice to the Trustee except that the
Company will maintain at least one Paying Agent in the State of New York, City
of New York, Borough of Manhattan, which shall initially be an office or agency
of the Trustee. The Company or any of its Subsidiaries or any of their
Affiliates may act as Paying Agent, Conversion Agent, Registrar or co-registrar.
<PAGE>
4. Indenture.
The Company issued the Securities under an Indenture dated as of June 12.
2000 (the "Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as in effect from
time to time (the "TIA"). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the TIA
for a statement of those terms.
The Securities are general unsecured obligations of the Company limited to
$624,000,000 aggregate Principal Amount at Maturity (subject to Section 2.07 of
the Indenture). The Indenture does not limit other indebtedness of the Company,
secured or unsecured.
5. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the option
of the Company at the Redemption Prices set forth below, provided that the
Securities are not redeemable prior to June 12, 2003.
The table below shows Redemption Prices of a Security per $1,000 Principal
Amount at Maturity on the dates shown below and at Stated Maturity, which prices
reflect accrued Original Issue Discount calculated to each such date. The
Redemption Price of a Security redeemed between such dates shall include an
additional amount reflecting the additional Original Issue Discount accrued
since the next preceding date in the table.
<TABLE>
<CAPTION>
(2)
Accrued (3)
(1) Original Issue Redemption
LYON Discount at Price
-----------
Redemption Date Issue Price 2.75% (1) + (2)
--------------- ----------- ----- ---------
<S> <C> <C> <C>
June 12, 2003........................ $579.12 $ 49.45 $ 628.57
June 12, 2004........................ $579.12 $ 66.85 $ 645.97
June 12, 2005........................ $579.12 $ 84.74 $ 663.86
June 12, 2006........................ $579.12 $103.12 $ 682.24
June 12, 2007........................ $579.12 $122.01 $ 701.13
June 12, 2008........................ $579.12 $141.43 $ 720.55
June 12, 2009........................ $579.12 $161.38 $ 740.50
June 12, 2010........................ $579.12 $181.88 $ 761.00
June 12, 2011........................ $579.12 $202.95 $ 782.07
June 12, 2012........................ $579.12 $224.60 $ 803.72
June 12, 2013........................ $579.12 $246.86 $ 825.98
June 12, 2014........................ $579.12 $269.73 $ 848.85
June 12, 2015........................ $579.12 $293.23 $ 872.35
June 12, 2016........................ $579.12 $317.39 $ 896.51
June 12, 2017........................ $579.12 $342.21 $ 921.33
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
June 12, 2018........................ $579.12 $367.72 $ 946.84
June 12, 2019........................ $579.12 $393.94 $ 973.06
At Stated Maturity................... $579.12 $420.88 $1,000.00
</TABLE>
If converted to a semiannual coupon note following the occurrence of a Tax
Event, this Security will be redeemable at the Restated Principal Amount plus
accrued and unpaid interest from the date of such conversion through the
Redemption Date; but in no event will this Security be redeemable before June
12, 2003.
6. Purchase By the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Securities held
by such Holder on the following Purchase Dates and at the following Purchase
Prices per $1,000 Principal Amount at Maturity, upon delivery of a Purchase
Notice containing the information set forth in the Indenture, at any time from
the opening of business on the date that is 20 Business Days prior to such
Purchase Date until the close of business on such Purchase Date and upon
delivery of the Securities to the Paying Agent by the Holder as set forth in the
Indenture.
Purchase Date Purchase Price
------------- --------------
June 12, 2003 $628.57
June 12, 2010 $761.00
The Purchase Price (equal to the Issue Price plus accrued Original Issue
Discount to the Purchase Date) may be paid, at the option of the Company, in
cash or by the issuance and delivery of shares of Common Stock of the Company,
or in any combination thereof.
If prior to a Purchase Date this Security has been converted to a
semiannual coupon note following the occurrence of a Tax Event, the Purchase
Price will be equal to the Restated Principal Amount plus accrued and unpaid
interest from the date of conversion to the Purchase Date.
At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase the Securities held by
such Holder 35 Business Days after the occurrence of a Change in Control of the
Company occurring on or prior to June 12, 2003 for a Change in Control Purchase
Price equal to the Issue Price plus accrued Original Issue Discount to the
Change in Control Purchase Date, which Change in Control Purchase Price shall be
paid in cash. If prior to a Change in Control Purchase Date this Security has
been converted to a semiannual coupon note following the occurrence of a Tax
Event, the Change in Control Purchase Price shall be equal to the Restated
Principal Amount plus accrued and unpaid interest from the date of conversion to
the Change in Control Purchase Date.
Holders have the right to withdraw any Purchase Notice or Change in Control
Purchase Notice, as the case may be, by delivering to the Paying Agent a written
notice of withdrawal in accordance with the provisions of the Indenture.
<PAGE>
If cash (and/or securities if permitted under the Indenture) sufficient to
pay the Purchase Price or Change in Control Purchase Price, as the case may be,
of all Securities or portions thereof to be purchased as of the Purchase Date or
the Change in Control Purchase Date, as the case may be, is deposited with the
Paying Agent on the Business Day following the Purchase Date or the Change in
Control Purchase Date, as the case may be, Original Issue Discount ceases to
accrue on such Securities (or portions thereof) immediately after such Purchase
Date or Change in Control Purchase Date, as the case may be, and the Holder
thereof shall have no other rights as such (other than the right to receive the
Purchase Price or Change in Control Purchase Price, as the case may be, upon
surrender of such Security).
7. Notice of Redemption.
Notice of redemption will be mailed at least 15 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
the Holder's registered address. If money sufficient to pay the Redemption Price
of all Securities (or portions thereof) to be redeemed on the Redemption Date is
deposited with the Paying Agent prior to or on the Redemption Date, immediately
after such Redemption Date Original Issue Discount ceases to accrue on such
Securities or portions thereof. Securities in denominations larger than $1,000
of Principal Amount at Maturity may be redeemed in part but only in integral
multiples of $1,000 of Principal Amount at Maturity.
8. Conversion.
Subject to the next two succeeding sentences, a Holder of a Security may
convert it into Common Stock of the Company at any time before the close of
business on June 12, 2020. If the Security is called for redemption, the Holder
may convert it at any time before the close of business on the Redemption Date.
A Security in respect of which a Holder has delivered a Purchase Notice or
Change in Control Purchase Notice exercising the option of such Holder to
require the Company to purchase such Security may be converted only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 7.156 shares of Common Stock per $1,000
Principal Amount at Maturity, subject to adjustment in certain events described
in the Indenture. The Company will deliver cash or a check in lieu of any
fractional share of Common Stock.
In the event the Company exercises its option pursuant to Section 10.01 of
the Indenture to have interest in lieu of Original Issue Discount accrue on the
Security following a Tax Event, the Holder will be entitled on conversion to
receive the same number of shares of Common Stock such Holder would have
received if the Company had not exercised such option. If the Company exercises
such option, Securities surrendered for conversion during the period from the
close of business on any Regular Record Date next preceding any Interest Payment
Date to the opening of business of such Interest Payment Date (except Securities
to be redeemed on a date within such period) must be accompanied by payment of
an amount equal to the interest thereon that the registered Holder is to
receive. Except where Securities surrendered for conversion must be accompanied
by payment as described above, no interest on converted Securities will be
payable by the Company on any Interest Payment Date subsequent to the date of
conversion.
<PAGE>
To convert a Security, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the
Security to the Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (4) pay any transfer or similar tax, if required.
A Holder may convert a portion of a Security if the Principal Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. No payment
or adjustment will be made for dividends on the Common Stock except as provided
in the Indenture. On conversion of a Security, that portion of accrued Original
Issue Discount (or interest if the Company has exercised its option provided for
in paragraph 10 hereof) attributable to the period from the Issue Date (or, if
the Company has exercised the option referred to in paragraph 10 hereof, the
later of (x) the date of such exercise and (y) the date on which interest was
last paid) through the Conversion Date with respect to the converted Security
shall not be cancelled, extinguished or forfeited, but rather shall be deemed to
be paid in full to the Holder thereof through the delivery of the Common Stock
(together with the cash payment, if any, in lieu of fractional shares) in
exchange for the Security being converted pursuant to the terms hereof; and the
fair market value of such shares of Common Stock (together with any such cash
payment in lieu of fractional shares) shall be treated as issued, to the extent
thereof, first in exchange for Original Issue Discount (or interest, if the
Company has exercised its option provided for in paragraph 10 hereof) accrued
through the Conversion Date, and the balance, if any, of such fair market value
of such Common Stock (and any such cash payment) shall be treated as issued in
exchange for the Issue Price of the Security being converted pursuant to the
provisions hereof.
The Conversion Rate will be adjusted for dividends or distributions on
Common Stock payable in Common Stock or other Capital Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock for a period
expiring within 60 days at less than the Quoted Price at the Time of
Determination; and distributions to such holders of assets or debt securities of
the Company or certain rights to purchase securities of the Company (excluding
certain cash dividends or distributions). However, no adjustment need be made if
Securityholders may participate in the transaction or in certain other cases.
The Company from time to time may voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a
Security into Common Stock may be changed into a right to convert it into
securities, cash or other assets of the Company or another person.
9. Conversion Arrangement on Call for Redemption.
Any Securities called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such Securities at an amount not less than the
Redemption Price, by one or more investment bankers or other purchasers who may
agree with the Company to purchase such Securities from the Holders, to convert
them into Common Stock of the Company and to make payment for such Securities to
the Trustee in trust for such Holders.
<PAGE>
10. Tax Event
(a) From and after (i) the date (the "Tax Event Date") of the occurrence
of a Tax Event and (ii) the date the Company exercises such option, whichever is
later (the "Option Exercise Date"), at the option of the Company, interest in
lieu of future Original Issue Discount shall accrue at the rate of 2.75% per
annum on a principal amount per Security (the "Restated Principal Amount") equal
to the Issue Price plus Original Issue Discount accrued through the Option
Exercise Date and shall be payable semiannually on June 12 and December 12 of
each year (each an "Interest Payment Date") to holders of record at the close of
business on May 28 or November 27 (each a "Regular Record Date") immediately
preceding such Interest Payment Date. Interest will be computed on the basis of
a 360-day year comprised of twelve 30-day months and will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the Option Exercise Date.
(b) Interest on any Security that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose. Each installment of interest on any Security shall be paid in
same-day funds by transfer to an account maintained by the payee located inside
the United States.
(c) Except as otherwise specified with respect to the Securities, any
Defaulted Interest on any Security shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company
as provided for in Section 10.02(b) of the Indenture.
11. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount at Maturity and integral multiples
of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not transfer
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities in respect of which a Purchase Notice or Change in Control
Purchase Notice has been given and not withdrawn (except, in the case of a
Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.
12. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of this
Security for all purposes.
13. Unclaimed Money or Securities.
<PAGE>
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, subject to
applicable unclaimed property law. After return to the Company, Holders entitled
to the money or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another person.
14. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended with the written consent of the Holders of at
least a majority in aggregate Principal Amount at Maturity of the Securities at
the time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate Principal Amount at Maturity
of the Securities at the time outstanding. Subject to certain exceptions set
forth in the Indenture, without the consent of any Securityholder, the Company
and the Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 or Section 11.14
of the Indenture, to provide for uncertificated Securities in addition to or in
place of certificated Securities or to make any change that does not adversely
affect the rights of any Securityholder, or to comply with any requirement of
the SEC in connection with the qualification of the Indenture under the TIA.
15. Defaults and Remedies.
Under the Indenture, Events of Default include (i) if the Securities have
been converted to semiannual coupon notes following a Tax Event, default in the
payment of interest (whether or not such payment shall be prohibited by the
terms of the Indenture); (ii) default in payment of the Principal Amount at
Maturity (or, if the Securities have been converted to semiannual coupon notes
following a Tax Event, the Restated Principal Amount), Issue Price plus accrued
Original Issue Discount, Redemption Price, Purchase Price or Change in Control
Purchase Price, as the case may be, in respect of the Securities when the same
becomes due and payable (whether or not such payment shall be prohibited by the
terms of the Indenture); (iii) failure by the Company to comply with other
agreements in the Indenture or the Securities, subject to notice and lapse of
time; (iv) failure of the Company to make any payment by the end of any
applicable grace period after maturity of Debt in an amount in excess of
$25,000,000, or (b) the acceleration of Debt in an amount in excess of
$25,000,000 because of a default with respect to such Debt without such Debt
having been discharged or such acceleration having been cured, waived, rescinded
or annulled, subject to notice and lapse of time; provided, however, that if any
such failure or acceleration referred to in (a) or (b) above shall cease or be
cured, waived, rescinded or annulled, then the Event of Default by reason
thereof shall be deemed not to have occurred; and (v) certain events of
bankruptcy or insolvency. If an Event of Default occurs and is continuing, the
Trustee, or the Holders of at least 25% in aggregate Principal Amount at
Maturity of the Securities at the time outstanding, may declare all the
Securities to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Securities becoming
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives
<PAGE>
reasonable indemnity or security. Subject to certain limitations, Holders of a
majority in aggregate Principal Amount at Maturity of the Securities at the time
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of amounts specified in clause (i) or (ii) above)
if it determines that withholding notice is in their interests.
16. Subordination.
The Securities are subordinated to the Senior Indebtedness of the Company.
To the extent provided in the Indenture, Senior Indebtedness of the Company must
be paid before the Securities may be paid. The Company and each Holder of
Securities, by accepting a Security, agrees to the subordination provisions
contained in the Indenture and authorizes the Trustee to give it effect and
appoints the Trustee as attorney-in-fact for such purpose.
17. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
18. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
19. Authentication.
This Security shall not be valid until an authorize signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
20. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
----------------------
<PAGE>
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
Kohl's Corporation
N56 W17000 Ridgewood Drive
Menomonee Falls, WI 53051
Attention: Chief Financial Officer
<TABLE>
<S> <C>
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Security, fill in the To convert this Security into Common
form below: Stock of the Company, check the box:
I or we assign and transfer this 9
Security to
_____________________________________ To convert only part of this
_____________________________________ Security, state the Principal Amount
at Maturity to be converted (which
(Insert assignee's soc. sec. or tax must be $1,000 or an integral
ID no.) multiple of $1,000):
____________________________________ $___________________________________
____________________________________ If you want the stock certificate
made out in another person's name,
____________________________________ fill in the form below:
(Print or type assignee's name,
address and zip code) ___________________________________
___________________________________
and irrevocably appoint (Insert other person's soc. sec. or
tax ID no.)
__________________________ agent to ___________________________________
transfer this Security on the books ___________________________________
of the Company. The agent may ___________________________________
substitute another to act for him. ___________________________________
___________________________________
(Print or type other person's name,
address and zip code)
</TABLE>
______________________________________________________________________________
Date: _____________________ Your Signature: _________________________________
______________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
<PAGE>
EXHIBIT A-2
[Form of Certificated Security]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF PRINCIPAL AMOUNT AT
MATURITY OF THIS SECURITY IS $420.88, THE ISSUE DATE IS JUNE 12, 2000, THE YIELD
TO MATURITY IS 2.75%.
[INCLUDE IF SECURITY IS A CERTIFICATED SECURITY TO BE HELD BY AN
INSTITUTIONAL ACCREDITED INVESTOR--IN CONNECTION WITH ANY TRANSFER, THE HOLDER
WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOLLOWING RESTRICTIONS.]
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH KOHL'S CORPORATION (THE
"COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) 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, (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (E) IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH
A-2-1
<PAGE>
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (C), (E) OR (F) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED
BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
[THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF
THE CONDITIONS SPECIFIED IN THE INDENTURE.]
A-2-1
<PAGE>
KOHL'S CORPORATION
Liquid Yield Option(TM) Note due 2020
(Zero Coupon-Subordinated)
No. R-3 CUSIP: 500255AG9
Issue Date: June 12, 2000 Original Issue Discount: $420.88
Issue Price: $579.12 (for each $1,000 Principal
(for each $1,000 Principal Amount at Maturity)
Amount at Maturity)
KOHL'S CORPORATION, a Wisconsin corporation, promises to pay to Cede & Co.
or registered assigns, the Principal Amount at Maturity of FIVE HUNDRED AND
TWENTY MILLION DOLLARS ($520,000,000) on June 12, 2020.
This Security shall not bear interest except as specified on the other side
of this Security. Original Issue Discount will accrue as specified on the other
side of this Security. This Security is convertible as specified on the other
side of this Security.
Additional provisions of this Security are set forth on the other side of
this Security.
Dated: KOHL'S CORPORATION
By
----------------------
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this
is one of the Securities referred
to in the within-mentioned Indenture.
By ________________________
Authorized Signatory
Dated: _____________________
A-2-1
<PAGE>
EXHIBIT B-1
Transfer Certificate
In connection with any transfer of any of the Securities within the period
prior to the expiration of the holding period applicable to the sales thereof
under Rule 144(k) under the Securities Act of 1933, as amended (the "Securities
Act") (or any successor provision), the undersigned registered owner of this
Security hereby certifies with respect to $____________ Principal Amount at
Maturity of the above-captioned securities presented or surrendered on the date
hereof (the "Surrendered Securities") for registration of transfer, or for
exchange or conversion where the securities issuable upon such exchange or
conversion are to be registered in a name other than that of the undersigned
registered owner (each such transaction being a "transfer"), that such transfer
complies with the restrictive legend set forth on the face of the Surrendered
Securities for the reason checked below:
[_] A transfer of the Surrendered Securities is made to the
Company or any subsidiaries; or
[_] The transfer of the Surrendered Securities complies with
Rule 144A under the U.S. Securities Act of 1933, as amended (the
"Securities Act"); or
[_] The transfer of the Surrendered Securities is to an
institutional accredited investor, as described in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to an effective
registration statement under the Securities Act, or
[_] The transfer of the Surrendered Securities is pursuant to an offshore
transaction in accordance with Rule 904 of Regulation S under the
Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to another
available exemption from the registration requirement of the
Securities Act.
and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").
[_] The transferee is an Affiliate of the Company.
DATE: _______________ ---------------------------------------
Signature(s)
(If the registered owner is a corporation, partnership or
B-1-1
<PAGE>
fiduciary, the title of the Person signing on behalf of
such registered owner must be stated.)
B-1-2
<PAGE>
EXHIBIT B-2
Form of Letter to be Delivered by Accredited Investors
Kohl's Corporation
N56 W17000 Ridgewood Drive
Menomonee Falls, WI 53051
Attention: Chief Financial Officer
The Bank of New York
101 Barclay Street,
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Dear Sirs:
We are delivering this letter in connection with the proposed transfer of
$_____________ Principal Amount at Maturity of the Liquid Yield Option Notes due
2020 ("LYONs") of Solectron Corporation (the "Company"), which are convertible
into shares of the Company's Common Stock, $0.001 par value per share (the
"Common Stock").
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a)(1), (2) or (3) under
the Securities Act (an "Institutional Accredited Investor");
(ii) the purchase of LYONs by us is for our own account or for the
account of one or more other Institutional Accredited Investors or as
fiduciary for the account of one or more trusts, each of which is an
"accredited investor" within the meaning of Rule 501(a)(7) under the
Securities Act and for each of which we exercise sole investment discretion
or (B) we are a "bank," within the meaning of Section 3(a)(2) of the
Securities Act, or a "savings and loan association" or other institution
described in Section 3(a)(5)(A) of the Securities Act that is acquiring
LYONs as fiduciary for the account of one or more institutions for which we
exercise sole investment discretion;
(iii) we will acquire LYONs having a minimum principal amount at
maturity of not less than $250,000 for our own account or for any separate
account for which we are acting;
<PAGE>
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing LYONs; and
(v) we are not acquiring LYONs with a view to distribution thereof or
with any present intention of offering or selling LYONs or the Common Stock
issuable upon conversion thereof, except as permitted below; provided that
the disposition of our property and property of any accounts for which we
are acting as fiduciary shall remain at all times within our control.
We understand that the LYONs were originally offered and sold in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the LYONs and the shares of Common
Stock (the "Securities") issuable upon conversion thereof have not been
registered under the Securities Act, and we agree, on our own behalf and on
behalf of each account for which we acquire any LYONs, that if in the future we
decide to resell or otherwise transfer such Securities prior to the date (the
"Resale Restriction Termination Date") which is two years after the later of the
original issuance of the LYONs and the last date on which the Company or an
affiliate of the Company was the owner of the Security, such Securities may be
resold or otherwise transferred only (i) to Kohl's Corporation or any subsidiary
thereof, or (ii) for as long as the LYONs are eligible for resale pursuant to
Rule 144A, to a person it reasonably believes is a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) that purchases for its
own account or for the account of a qualified institutional buyer to which
notice is given that the transfer is being made in reliance on Rule 144A, or
(iii) to an Institutional Accredited Investor that is acquiring the Security for
its own account, or for the account of such 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 (iv)
pursuant to another available exemption from registration under the Securities
Act (if applicable), or (v) pursuant to a registration statement which has been
declared effective under the Securities Act and, in each case, in accordance
with any applicable securities laws of any State of the United States or any
other applicable jurisdiction and in accordance with the legends set forth on
the Securities. We further agree to provide any person purchasing any of the
Securities other than pursuant to clause (v) above from us a notice advising
such purchaser that resales of such securities are restricted as stated herein.
We understand that the trustee or the transfer agent, as the case may be, for
the Securities will not be required to accept for registration of transfer any
Securities pursuant to (iii) or (iv) above except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with. We further understand that any Securities will be in the
form of definitive physical certificates and that such certificates will bear a
legend reflecting the substance of this paragraph other than certificates
representing Securities transferred pursuant to clause (v) above.
We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
B-2-2
<PAGE>
---------------------------------------------
(Name of Purchaser)
By: ---------------------
Name:
Title:
Address:
B-2-3
