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Exhibit 99.1
Solicitation Statement Dated October 25, 2000
NVR, INC.
Solicitation of Consents to Amendment
of
the Indenture Governing
its
8% Senior Notes due 2005
(CUSIP No. 62944T AB 1)
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THIS CONSENT SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
NOVEMBER 13, 2000, UNLESS EXTENDED. IF THE REQUISITE CONSENTS ARE OBTAINED AND
THE PROPOSED AMENDMENT IS ADOPTED AND BECOMES EFFECTIVE, IT WILL BE BINDING ON
ALL HOLDERS OF NOTES, AND THEIR RESPECTIVE TRANSFEREES, WHETHER OR NOT THEY HAVE
DELIVERED A CONSENT.
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NVR, Inc. ("NVR" or the "Company") is hereby soliciting consents from
registered holders of its 8% Senior Notes due 2005 (the "Notes") to the
amendment (the "Proposed Amendment") of the indenture (the "Indenture") dated
as of April 14, 1998, between the Company and The Bank of New York, as trustee
(the "Trustee"), as amended and supplemented by the first supplemental indenture
(the "First Supplemental Indenture") dated as of April 14, 1998, between the
Company and the Trustee, pursuant to which the Notes were issued. As more fully
described herein, the purpose of the consent solicitation (the "Solicitation")
is to permit the Company to amend the Indenture in order to provide the Company
with greater flexibility to continue to repurchase shares of its outstanding
common stock as part of its strategy of maximizing shareholder value. See
"Purpose of the Solicitation and Proposed Amendment." The Proposed Amendment to
the Indenture is specifically set forth in "Proposed Amendment" and in Annex A
hereto.
This solicitation is being made to all holders of the Notes. Subject to the
terms and conditions set forth in this Solicitation Statement, the Company will
(i) accept all properly completed and executed consent forms constituting or
deemed to constitute a vote for the Proposed Amendment (the "Consents") received
by Georgeson Shareholder Communications Inc. (the "Information Agent") prior to
5:00 p.m., New York City time, on November 13, 2000 (as such time may be
extended as provided herein, the "Expiration Date") and not properly revoked
only if (x) Consents (the "Requisite Consents") in respect of at least a
majority in aggregate principal amount of Notes that are outstanding have been
received by the Expiration Date (and not properly revoked) and (y) the operative
provisions of the second supplemental indenture incorporating the Proposed
Amendment (the "Second Supplemental Indenture") have become effective and (ii)
pay consenting Holders (as hereinafter defined) $10 in cash (the "Consent
Payment") for each $1,000 principal amount of Notes for which a Consent has been
accepted.
The Solicitation Agent for the Consent Solicitation is:
Credit Suisse First Boston
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The Company will make Consent Payments to consenting Holders as promptly as
practicable after the execution of the Second Supplemental Indenture. Holders
who do not properly deliver their Consents prior to the Expiration Date will not
be entitled to receive Consent Payments.
The Company expressly reserves the right in its sole discretion (i) to
terminate the Solicitation at any time (including after the Expiration Date)
prior to the execution of the Second Supplemental Indenture (whether or not the
Requisite Consents have been received) by giving oral or written notice of such
termination to the Trustee, (ii) not to extend the Solicitation beyond the
Expiration Date and (iii) to amend, at any time or from time to time, the terms
of the Solicitation. Any such termination or amendment will be followed as
promptly as practicable by public announcement thereof (or written notice
thereof to the Registered Holders of Notes).
Only those persons in whose names Notes are registered in the register
maintained by the Trustee as of the close of business on October 25, 2000 (the
"Record Date"), or any other person who has obtained a proxy authorizing such
person (or any other person claiming title by or through such person) to vote
the applicable Notes on behalf of a Registered Holder, will be eligible to
consent to the Proposed Amendment and be entitled to receive a Consent Payment.
A beneficial owner of Notes (other than a DTC participant) registered in the
name of a nominee must either (i) instruct the relevant holder to deliver a
Consent on its behalf or (ii) obtain a written proxy from such registered holder
if such beneficial owner desires to deliver a Consent with respect to such
Notes.
The Company shall not be deemed to have accepted any Consents until the
Second Supplemental Indenture is executed by the Company and the Trustee. If the
Company and the Trustee execute the Second Supplemental Indenture as aforesaid,
the Proposed Amendment will be binding upon all holders of Notes, whether or not
such Holders have delivered their Consents.
The transfer of Notes will not have the effect of revoking the election
made in any Consent form theretofore validly delivered by the Holder of such
Notes, and each Consent will be counted notwithstanding any transfer of the
Notes to which such Consent relates, unless the procedure for revoking Consents
described herein has been complied with. Holders must deliver (and not revoke)
Consents to approve the Proposed Amendment. For purposes of determining the
principal amount of Notes outstanding, Notes held by the Company and any of its
affiliates will not be counted as outstanding. As of the date of this
Solicitation Statement, the aggregate principal amount of Notes outstanding is
$145,000,000, $30,000,000 of which is held by the Company and $1,010,000 of
which is held by affiliates of the Company. Accordingly, for purposes of this
Solicitation Statement, a total of $113,990,000 in aggregate principal amount of
Notes will be counted as outstanding.
CONSENTS MAY BE REVOKED IN ACCORDANCE WITH THE PROCEDURE SET FORTH HEREIN
AT ANY TIME UP TO, BUT WILL BECOME IRREVOCABLE UPON, THE LATER OF (I) THE
EXPIRATION DATE AND (II) THE RECEIPT BY THE TRUSTEE FROM THE COMPANY OF AN
OFFICER'S CERTIFICATE CERTIFYING THAT THE REQUISITE CONSENTS HAVE BEEN RECEIVED.
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ONLY HOLDERS ON THE RECORD DATE WHO PROPERLY DELIVER THEIR CONSENTS PRIOR
TO THE EXPIRATION DATE AND DO NOT PROPERLY REVOKE SUCH CONSENTS WILL BE ENTITLED
TO RECEIVE CONSENT PAYMENTS IN THE EVENT THE SECOND SUPPLEMENTAL INDENTURE IS
EXECUTED.
IF ANY HOLDER SUBMITS AN EXECUTED CONSENT FORM WITHOUT INDICATING A VOTE
WITH RESPECT TO THE PROPOSED AMENDMENT, SUCH SUBMISSION WILL BE DEEMED TO
CONSTITUTE A VOTE FOR THE PROPOSED AMENDMENT.
NOTES SHOULD NOT BE TENDERED OR DELIVERED IN CONNECTION WITH THIS
SOLICITATION.
THE SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON NOVEMBER
13, 2000, UNLESS EXTENDED.
IMPORTANT
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS SOLICITATION STATEMENT. IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION CANNOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE SOLICITATION AGENT OR THE INFORMATION
AGENT. THE COMPANY IS NOT AWARE OF ANY JURISDICTION IN WHICH THE MAKING OF THE
SOLICITATION IS NOT IN COMPLIANCE WITH APPLICABLE LAW. IF THE COMPANY BECOMES
AWARE OF ANY JURISDICTION IN WHICH THE MAKING OF THE SOLICITATION WOULD NOT BE
IN COMPLIANCE WITH APPLICABLE LAW, IT WILL MAKE A GOOD FAITH EFFORT TO COMPLY
WITH SUCH LAW. IF, AFTER SUCH GOOD FAITH EFFORT, IT CANNOT COMPLY WITH ANY SUCH
LAW, CONSENTS WILL NOT BE SOLICITED FROM HOLDERS RESIDING IN SUCH JURISDICTIONS.
IN ANY JURISDICTION WHERE THE SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE
SOLICITATION TO BE MADE BY A LICENSED BROKER OR DEALER, THE SOLICITATION WILL BE
DEEMED TO BE MADE ON BEHALF OF THE COMPANY BY THE SOLICITATION AGENT OR ONE OR
MORE OTHER REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF SUCH
JURISDICTION.
The delivery of this Solicitation Statement shall not under any
circumstances create any implication that the information contained herein is
correct as of any time subsequent to the date hereof or that there has been no
change in the information set forth herein or in the affairs of the Company
since the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450
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Fifth Street, N.W., Washington, D.C. 20549; Northwest Atrium Center, Suite 1400,
500 West Madison Street, Chicago, Illinois 60661; and Seven World Trade Center,
13th Floor, New York, New York 10048. Copies of such material can be obtained
from the Public Reference Section of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such materials
may also be accessed electronically by means of the Commission's home page on
the Internet at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1999 and Quarterly Reports on Form 10-Q for the quarters ended March 31,
2000, June 30, 2000 and September 30, 2000, which are on file with the
Commission, are incorporated in this Solicitation Statement by reference and
made a part hereof. All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act through the Expiration
Date shall be deemed to be incorporated herein by reference and shall be a part
hereof from the date of the filing of such documents. Any statements contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or replaced for purposes of this Solicitation
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or replaces such statement. Any such statement so
modified or replaced shall not be deemed, except as so modified or replaced, to
constitute a part of this Solicitation Statement.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Solicitation Statement is delivered, upon written
or oral request of such person, a copy of the documents incorporated by
reference herein, other than exhibits to such documents not specifically
incorporated by reference. Such requests should be directed to the Information
Agent.
FORWARD-LOOKING STATEMENTS
Some of the statements in this Solicitation Statement, including the
documents incorporated herein by reference, as well as statements made by the
Company in periodic press releases or other public communications, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Certain, but not necessarily all, of such
forward-looking statements can be identified by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should," or
"anticipates" or the negative thereof or other variations thereof or comparable
terminology, or by discussion of strategies, each of which involves risks and
uncertainties. All statements other than of historical facts included herein or
incorporated herein by reference, including those regarding market trends, the
Company's financial position, business strategy, projected plans and objectives
of management for future operations, are forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results or performance of the Company to
be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Such risk factors
include, but are not limited to, general economic and business conditions (on
both a national and regional level), interest rate changes, access to suitable
financing, competition, the availability and cost of
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land and other raw materials used by the Company in its homebuilding operations,
shortages of labor, weather related slow downs, building moratoria, governmental
regulation, the ability of the Company to integrate any acquired business,
certain conditions in financial markets and other factors over which the Company
has little or no control.
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SUMMARY
The following is a summary of certain information contained elsewhere in
this Solicitation Statement and is qualified in its entirety by the more
detailed information contained elsewhere in this Solicitation Statement or
incorporated herein by reference. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Indenture.
The Company.................... The Company was formed in 1980 as NVHomes, Inc.
The Company operates in two business segments:
(1) the construction and marketing of homes and
(2) mortgage banking. The Company conducts its
homebuilding activities both directly and
through its wholly owned subsidiary, Fox Ridge
Homes, Inc. NVR is one of the largest home
builders in the United States and in the
Washington, D.C. and Baltimore, Maryland
metropolitan areas. The homebuilding unit
constructs homes under the Ryan Homes, NVHomes
and Fox Ridge Homes trade names. The Company
conducts its mortgage banking operations
through another wholly owned subsidiary, NVR
Mortgage Finance, Inc. NVR provides a number of
mortgage-related services through its mortgage
banking operations.
Purpose of the Solicitation.... The purpose of the Solicitation and the
Proposed Amendment is to modify the Indenture
in order to provide NVR with greater
flexibility to continue to repurchase shares of
its outstanding common stock as part of its
strategy of maximizing shareholder value. See
"Purpose of the Solicitation and Proposed
Amendment."
The Solicitation............... The Company is soliciting Consents of Holders
to the Proposed Amendment to the Indenture.
The Consent Payments........... The Company will pay $10 in cash for each
$1,000 principal amount of Notes for which a
Consent is received and accepted. The Company
will make the Consent Payments as promptly as
practicable after the execution of the Second
Supplemental Indenture.
Expiration Date................ The Expiration Date is 5:00 p.m., New York City
time, on November 13, 2000, unless the
Solicitation is extended, in which case the
term "Expiration Date" means the latest date
and time to which the Solicitation is extended.
The Company may extend the Solicitation at any
time.
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Proposed Amendment............. The Company has periodically repurchased shares
of its outstanding common stock as part of its
strategy of maximizing shareholder value. In
furtherance of this strategy, the Company has
entered into an agreement with an individual
shareholder not otherwise affiliated with the
Company to repurchase approximately 780,000
shares of the Company's common stock, effective
January 2, 2001, for approximately $65,000,000.
While the Company expects to have the capacity
under the Indenture to acquire these shares,
the Proposed Amendment would give the Company
flexibility to make additional repurchases as
set forth below.
The Proposed Amendment would amend the covenant
in the Indenture limiting certain "Restricted
Payments" to permit the Company to make, in
addition to the Restricted Payments the Company
would otherwise be permitted to make under the
Indenture, additional Restricted Payments of up
to $70,000,000 in the aggregate for the purpose
of repurchasing the Company's outstanding
capital stock (from persons other than officers
or directors of the Company) in one or more
privately negotiated and/or open market
transactions at any time or from time to time
on or before July 31, 2001; provided that any
such additional Restricted Payments not made on
or before July 31, 2001 may not be made at any
subsequent time. See "The Proposed Amendment."
Conditions to Proposed
Amendment..................... The effectiveness of the Proposed Amendment is
conditioned upon receipt of valid Consents (not
properly revoked) from Holders of at least a
majority in aggregate principal amount of Notes
outstanding and acceptance of such Consents by
the Company. The Company will not be deemed to
accept any Consents until the Second
Supplemental Indenture is executed.
Holders........................ The term "Registered Holder," when used with
respect to the Solicitation, means any person
in whose name a Note is registered in the
register maintained by the Trustee as of the
Record Date. The term "Holder" means any
Registered Holder or
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any other person who has obtained a proxy
authorizing such person (or any other person
claiming title by or through such person) to
Consent with respect to Notes on behalf of the
Registered Holder thereof.
Procedure for Consenting....... A Holder of Notes desiring to deliver a Consent
form should complete and sign the Consent form,
or a facsimile thereof, have the signature
thereon (and on any proxy delivered therewith)
guaranteed or notarized (unless such Consent
form or proxy, as the case may be, is given by
or for the account of an Eligible Institution
(as defined below)) and mail or otherwise
deliver the Consent form, or such facsimile
(together with a duly executed proxy, if the
Holder is not a Registered Holder, and any
other proxy, guarantee or notarization required
to establish a beneficial owner's or registered
holder's right to execute a Consent form) to
the Information Agent at its address set forth
below. A beneficial owner of Notes that is not
a Holder of such Notes desiring to deliver a
Consent form should request the Registered
Holder of such Notes to effect the transaction
for such beneficial owner or to provide such
beneficial owner with a proxy authorizing such
beneficial owner to Consent with respect to
Notes on behalf of such Registered Holder. The
term "Eligible Institution", when used with
respect to the Solicitation, means a firm that
is a member of a registered national securities
exchange or the National Association of
Securities Dealers, Inc., or a commercial bank
or trust company having an office or
correspondent in the United States.
Revocation..................... Consents may be revoked by filing a written
notice of revocation with the Information Agent
at any time prior to the later of the
Expiration Date and receipt by the Trustee from
the Company of an officer's certificate in
accordance with the Indenture certifying that
the Requisite Consents have been received. Any
Holder who properly revokes a Consent will not
receive a Consent Payment, unless such Consent
is properly redelivered prior to the Expiration
Date. The transfer of Notes after the Record
Date will not have the effect of revoking the
election made in any Consent form theretofore
validly delivered by a Holder of such Notes
prior to
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such transfer, and each Consent will be counted
notwithstanding any transfer after the Record
Date of the Notes to which such Consent relates
unless the procedure for revoking Consents
described herein has been compiled with.
Delivery of Consent Forms...... Each Consent form should be sent to the
Information Agent, as follows:
Georgeson Shareholder Communications Inc.
17 State Street
10th Floor
New York, New York 10004
Facsimile Transmission: (212) 440-9009
Telephone Number: (212) 440-9800 (collect)
Amendment to Solicitation...... The Company expressly reserves the right in its
sole discretion, (i) to terminate the
Solicitation at any time (including after the
Expiration Date) prior to the execution of the
Second Supplemental Indenture (whether or not
the Requisite Consents have been received) by
giving oral or written notice of such
termination to the Trustee, (ii) not to extend
the Solicitation beyond the Expiration Date and
(iii) to amend, at any time or from time to
time, the terms of the Solicitation. Any such
termination or amendment will be followed as
promptly as practicable by public announcement
thereof (or written notice thereof to the
Registered Holders of Notes).
Certain Tax Considerations..... The Company believes that the federal income
tax consequence of adoption of the Proposed
Amendment to holders of Notes will be that the
full amount of the Consent Payment will be
subject to tax as ordinary income to those
holders who receive it. See "Certain Federal
Income Tax Consequences."
Assistance; Additional
Materials.................... Questions regarding the Solicitation should be
directed to the Company's Solicitation Agent,
Credit Suisse First Boston Corporation ("CSFB"
or the "Solicitation Agent"). All requests and
correspondence to CSFB should be directed to
CSFB at the following address: 277 Park Avenue,
New York, New York 10172, attention: Marc Warm,
(212) 892-7179 or (800) 922-9004 (ext. 7179) or
Jeff Dorst, (212) 538-8474 or (800) 820-1653.
Questions relating to the procedure for
consenting as well as requests for assistance
or for additional material should be directed
to the Information Agent at (800) 223-2064
(toll free). Banks and brokers should call
(212) 440-9800 (collect).
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THE COMPANY
The Company was formed in 1980 as NVHomes, Inc. The Company operates in
two business segments: (1) the construction and marketing of homes and (2)
mortgage banking. The Company conducts its homebuilding activities both
directly and through its wholly owned subsidiary, Fox Ridge Homes, Inc. The
Company conducts its mortgage banking operations through another wholly owned
subsidiary, NVR Mortgage Finance, Inc. Unless the context otherwise requires,
references to "NVR" in this section include its subsidiaries.
NVR is one of the largest homebuilders in the United States and in the
Washington, D.C. and Baltimore, Maryland metropolitan areas. NVR's homebuilding
operations construct and sell single-family detached homes, townhomes and
condominium buildings under three tradenames: Ryan Homes, NVHomes and Fox Ridge
Homes. The Ryan Homes product is built in seventeen metropolitan areas located
in Maryland, Virginia, Pennsylvania, New York, North Carolina, South Carolina,
Ohio, New Jersey, Delaware and Tennessee. The Fox Ridge Homes product is built
only in the Nashville, Tennessee metropolitan area. The Ryan Homes and Fox
Ridge Homes products are moderately priced and marketed primarily towards first-
time buyers. The NVHomes product is built largely in the Washington, D.C.
metropolitan area, and is marketed primarily to move-up buyers.
In addition to building and selling homes, NVR provides a number of
mortgage-related services through its mortgage banking operations, which operate
in ten states. NVR's mortgage banking business generates revenues primarily
from origination fees, gains on marketing of loans, title fees, and sales of
servicing rights. NVR's mortgage banking operations provide financing to a
substantial portion of NVR's homebuilding customers. NVR's mortgage banking
business sells all of the mortgage loans and related servicing rights it closes
into the secondary markets.
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CAPITALIZATION
The following table sets forth the capitalization of the Company at
September 30, 2000 on an historical basis.
<TABLE>
<CAPTION>
September 30, 2000
------------------
(in thousands)
<S> <C>
Cash................................................. $ 118,398
Debt: =========
Homebuilding indebtedness
Notes Payable................................... 1,909
Other term debt................................. 5,021
8% Notes due 2005............................... 115,000
Total homebuilding debt......................... 121,930
Mortgage banking indebtedness(1)..................... 93,183
---------
Total debt...................................... 215,113
---------
Shareholders' equity:
Common Stock....................................... 206
Paid in capital.................................... 184,544
Retained earnings.................................. 353,256
Deferred compensation trust........................ (15,915)
Deferred compensation liability.................... 15,915
Less treasury stock at cost........................ (272,531)
---------
Total shareholders' equity...................... 265,475
---------
Total capitalization................................. $ 480,588
=========
</TABLE>
---------------
(1) Mortgage banking indebtedness is non-recourse to the Company.
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PURPOSE OF THE SOLICITATION
AND PROPOSED AMENDMENT
Beginning in 1994, the Company has periodically repurchased shares of its
outstanding common stock in open market and privately negotiated transactions
(the "Stock Repurchase Program") as part of its strategy of maximizing
shareholder value. In furtherance of the Stock Repurchase Program, the Company
has entered into an agreement (the "Repurchase Agreement") with an individual
shareholder not otherwise affiliated with the Company to repurchase
approximately 780,000 shares of the Company's common stock at a fixed price,
effective January 2, 2001. The aggregate purchase price for the shares of
common stock under the Repurchase Agreement is approximately $65,000,000. While
the Company expects to have the capacity under the Indenture to repurchase the
shares pursuant to the Repurchase Agreement, the purpose of the Proposed
Amendment is to provide the Company with the flexibility to make additional
repurchases of its common stock (from persons other than officers or directors
of the Company) of up to $70,000,000 in the aggregate in one or more privately
negotiated and/or open market transactions at any time or from time to time from
the effectiveness of the Proposed Amendment through July 31, 2001. This would
enable the Company to repurchase the shares under the Repurchase Agreement as
well as to continue its Stock Repurchase Program through the relevant time
period should the Company believe it appropriate to do so. Any portion of the
$70,000,000 in additional Restricted Payments permitted by the Proposed
Amendment but not made by the Company to repurchase its outstanding common stock
through July 31, 2001 may not be used by the Company at any subsequent time. The
consummation of the repurchase of shares pursuant to the Repurchase Agreement is
not contingent on the effectiveness of the Proposed Amendment.
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CERTAIN CONSIDERATIONS
Holders of Notes should carefully consider the factors set forth below as
well as the other information set forth in and incorporated by reference in this
Solicitation Statement prior to marking and returning a Consent.
Effects of the Proposed Amendment
If the Proposed Amendment becomes effective, modification of the Indenture
would permit NVR to make additional repurchases of its outstanding common stock
(from persons other than officers or directors of the Company) of up to
$70,000,000 in the aggregate on or before July 31, 2001. Such action could
increase the credit risks with respect to the Company faced by the Holders,
adversely affect the market price of the Notes or otherwise be adverse to the
interests of the Holders. See "The Proposed Amendment."
Certain Tax Considerations
For a discussion of certain federal income tax considerations relating to
the Proposed Amendment and the receipt of the Consent Payments by Holders, see
"Certain Federal Income Tax Consequences."
Consequences to Non-consenting Holders
Holders who do not timely consent to the Proposed Amendment prior to the
Expiration Date will not be eligible to receive the Consent Payments even though
the Proposed Amendment will be binding upon them upon execution of the Second
Supplemental Indenture.
PROPOSED AMENDMENT
Set forth below is a summary description of the proposed modification to
the Indenture for which the Consents of the Registered Holders of the Notes are
being solicited hereby. This description is qualified by reference to the full
text of the Proposed Amendment, which is set forth in Annex A hereto.
As of the date of this Solicitation Statement, the aggregate principal
amount of Notes outstanding is $145,000,000, $30,000,000 of which is held by the
Company and $1,010,000 of which is held by affiliates of the Company.
Accordingly, for purposes of this Solicitation Statement, a total of
$113,990,000 in aggregate principal amount of Notes will be counted as
outstanding. The Notes bear interest at a rate of 8% per annum, payable on each
June 1 and December 1. NVR may redeem the Notes at 104% of the principal amount
of the Notes on or after June 1, 2003, at 102% on or after June 1, 2004 and at
par on or after June 1, 2005, in each case plus accrued and unpaid interest. The
Notes contain numerous covenants, including the covenant proposed to be modified
as outlined below. The foregoing summary is qualified in its entirety by
reference to the complete terms contained in the Indenture (including the form
of the Notes attached
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thereto), copies of which are available upon request without charge from the
Information Agent.
The Proposed Amendment would amend the covenant (Section 5.01 of the First
Supplemental Indenture) that limits certain Restricted Payments to permit NVR to
make, in addition to the Restricted Payments the Company would otherwise be
permitted to make under the Indenture, additional Restricted Payments of up to
$70,000,000 in the aggregate for the purpose of repurchasing the Company's
outstanding capital stock (from persons other than officers or directors of the
Company) in one or more privately negotiated and/or open market transactions at
any time or from time to time on or before July 31, 2001; provided that any such
additional Restricted Payments not made on or before July 31, 2001 may not be
made at any subsequent time.
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THE SOLICITATION
Terms of the Solicitation
Subject to the terms and conditions set forth herein, the Company hereby
offers to make a Consent Payment of $10 for each $1,000 principal amount of
Notes for which a valid Consent is (i) received by the Information Agent at the
address set forth below prior to the Expiration Date, (ii) not properly revoked
as provided herein prior to the later of the Expiration Date and receipt by the
Trustee from the Company of an officer's certificate certifying to the receipt
of the Requisite Consents and (iii) accepted by the Company as provided herein.
CONSENT PAYMENTS WILL BE MADE ONLY TO HOLDERS ON THE RECORD DATE WHO, PRIOR
TO THE EXPIRATION DATE, HAVE VALIDLY CONSENTED TO THE PROPOSED AMENDMENT. ANY
BENEFICIAL OWNER OF NOTES WHO IS NOT THE REGISTERED HOLDER BUT WHO DESIRES TO
GIVE A CONSENT AND THUS BE ENTITLED TO RECEIVE A CONSENT PAYMENT IN THE EVENT
THE SECOND SUPPLEMENTAL INDENTURE IS EXECUTED MUST EITHER (I) OBTAIN A PROXY
FROM THE REGISTERED HOLDER OF SUCH NOTES THAT AUTHORIZES SUCH BENEFICIAL OWNER
TO CONSENT IN THE MANNER DESCRIBED BELOW OR (II) REQUEST THE REGISTERED HOLDER
TO GIVE SUCH CONSENT ON ITS BEHALF.
The Company will make the Consent Payments as promptly as practicable after
the execution of the Second Supplemental Indenture. The Company reserves the
right, in its sole discretion, to delay making Consent Payments, in whole or in
part, in order to comply with any applicable law.
The Consents will become irrevocable on the later of the Expiration Date
and the date on which the Trustee receives from the Company an officer's
certificate certifying that the Requisite Consents have been received. Following
such delivery, the Trustee and the Company will execute the Second Supplemental
Indenture. The Proposed Amendment shall be effective upon execution of the
Second Supplemental Indenture. After execution of the Second Supplemental
Indenture, all holders of Notes including non-consenting holders and all
subsequent holders of the Notes, will be bound by the Proposed Amendment. Non-
consenting holders will not be entitled to any rights of appraisal or similar
rights of dissenters with respect to the proposed modification to the Indenture.
The term "Expiration Date" means 5:00 p.m., New York City time, on November
13, 2000, unless the Company, in its sole discretion, extends the period during
which the Solicitation is open, in which event the term "Expiration Date" shall
mean the time and date on which the Solicitation, as so extended by the Company,
expires. The Company reserves the right to extend the Solicitation at any time
and from time to time by giving oral or written notice to the Trustee no later
than 9:00 a.m., New York City time, on the business day following any previously
announced Expiration Date. Any such
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extension will be followed as promptly as practicable by public announcement
thereof (or written notice thereof to the Registered Holders of Notes). The
Company will not be obligated, and does not intend, to extend the Solicitation
if the Requisite Consents have been received as of the Expiration Date.
The Company expressly reserves the right, in its sole discretion, (i) to
terminate the Solicitation at any time (including after the Expiration Date)
prior to the execution of the Second Supplemental Indenture (whether or not the
Requisite Consents have been received) by giving oral or written notice of such
termination to the Trustee, (ii) not to extend the Solicitation beyond the
Expiration Date and (iii) to amend, at any time or from time to time, the terms
of the Solicitation. Any such termination or amendment will be followed as
promptly as practicable by public announcement thereof (or written notice
thereof to the Registered Holders of Notes).
If Consents received by the Information Agent (and not properly revoked) as
of the Expiration Date are sufficient to permit adoption of the Proposed
Amendment, the Company intends to execute the Second Supplemental Indenture.
Consents will be deemed to be accepted when the Second Supplemental Indenture
has been executed by the Company and the Trustee. The Company reserves the right
to accept any or all Consents received after the Expiration Date.
Consent Procedure
This Solicitation Statement is being sent to the current registered holders
of the Notes. The Company has designated October 25, 2000 as the Record Date for
the Solicitation.
Approval of the Proposed Amendment requires the consent of the Registered
Holders of at least a majority in aggregate principal amount of the Notes that
are outstanding. As of the date of this Solicitation Statement, the aggregate
principal amount of Notes outstanding is $145,000,000, $30,000,000 of which is
held by the Company and $1,010,000 of which is held by affiliates of the
Company. Accordingly, for purposes of this Solicitation Statement, a total of
$113,990,000 in aggregate principal amount of Notes will be counted as
outstanding.
Except as permitted by an omnibus proxy executed by DTC, as defined and
described below, only (i) Registered Holders or (ii) any other person who has
obtained a proxy which authorizes such person (or any other person claiming
title by or through such person) to vote the applicable Notes on behalf of such
Registered Holder (collectively, "Holders") may execute and deliver a Consent
and receive a Consent Payment. A beneficial owner of Notes who is not the
Registered Holder of such Notes (e.g., a beneficial holder whose Notes are
registered in the name of a nominee such as a brokerage firm) must (i) arrange
with the Registered Holder to execute and deliver a Consent on such beneficial
owner's behalf or (ii) obtain a proxy from the Registered Holder authorizing the
beneficial owner to vote the Notes on behalf of such Registered Holder. For
purposes of the Solicitation, (i) the Company anticipates that Depository Trust
Company ("DTC") will authorize (by omnibus proxy) brokers, banks and other
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financial institutions that participate in DTC ("DTC Participants") to execute
Consents as if they were Registered Holders and, in such case, (ii) the term
"Registered Holder," with respect to Notes registered in the name of Cede & Co.,
which is the nominee for DTC, shall be deemed to include DTC Participants. A
Consent by a DTC Participant must be signed in the manner in which its name
appears on the position listing of Cede & Co. A Consent by a Holder is a
continuing Consent notwithstanding that registered ownership of the Notes has
been transferred after the Record Date unless such Consent is timely revoked in
accordance with the procedure described herein.
The Consent form is enclosed with this Solicitation Statement. A Consent
form (or, if the Holder signing such Consent form is not the Registered Holder,
the accompanying irrevocable proxy), to be effective, must be executed by the
Registered Holder of the Notes to which such Consent form (or such irrevocable
proxy) relates in the same manner as the name of the Registered Holder appears
on such Notes or as set forth in a DTC security position listing. If such Notes
are held of record by two or more Registered Holders, all such Registered
Holders must sign the Consent form (or such irrevocable proxy). If such Notes
are registered in different names, separate Consent forms (or irrevocable
proxies) must be executed covering each form of registration. If a Consent form
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation, or other person acting in a fiduciary or
representative capacity, such person must so indicate when signing and must
submit with the Consent form appropriate evidence of authority to execute the
Consent form. In addition, (i) if a Holder is a Registered Holder and a Consent
form relates to less than the total principal amount of Notes registered in the
name of such Registered Holder as of the Record Date or (ii) if a Holder is not
a Registered Holder and is consenting pursuant to a proxy given by a Registered
Holder and a Consent form relates to less than the total principal amount of
Notes to which such proxy relates, such Consent form must list the certificate
numbers (or CUSIP numbers if held through DTC) and principal amount of Notes to
which the Consent form relates. Otherwise, the Consent form will be deemed to
relate to the total principal amount of Notes registered in the name of (or set
forth in the position listing of Cede & Co. for) such Registered Holder or to
which such proxy relates, as the case may be.
The registered ownership of Notes shall be proven by the Trustee, as
registrar of the Notes. The ownership of Notes held through DTC by DTC
Participants shall be established by a DTC security position listing provided by
DTC. All questions as to the validity, form, eligibility (including time of
receipt) and the acceptance of Consent forms and revocations of elections made
on Consent forms with respect to Notes will be resolved in the first instance by
the Company, whose determination shall be binding subject only to such final
review as may be prescribed by the Trustee in accordance with the Indenture
concerning proof of execution and ownership. The Company reserves the absolute
right to reject any or all Consent forms and revocations that are not in proper
form or the acceptance of which could, in the opinion of the Company's counsel,
be unlawful. The Company also reserves the right, subject to such final review
as the Trustee may prescribe in accordance with the Indenture for proof of
execution and ownership, to waive any irregularities or conditions of delivery
as to particular Consent forms or revocations. Unless waived, any irregularities
in connection with the deliveries
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must be cured within such time as the Company determines. None of the Company,
the Solicitation Agent, the Trustee, the Information Agent or any other person
shall be under any duty to give notification of any such irregularities or
waiver, nor shall any of them incur any liability for failure to give such
notification. Deliveries of such Consent forms or notices of revocation will not
be deemed to have been made until such irregularities have been cured or waived.
The Company's interpretation of the terms and conditions of this Solicitation
shall be binding.
Consents to the Proposed Amendment, to be effective, must be properly
executed and received by the Information Agent prior to the Expiration Date.
Each Holder of Notes wishing to consent with respect to the Proposed Amendment
must complete, sign and date the accompanying Consent form (or a facsimile
thereof) in accordance with the instructions set forth herein and therein, have
the signature thereon (and on any proxy delivered therewith) notarized or
guaranteed (unless such consent form or proxy, as the case may be, is given by
or for the account of an Eligible Institution) and mail, hand deliver or send by
overnight courier, or telecopy the Consent form and any other required documents
to the Information Agent. The method of delivery of all documents, including
fully executed Consent forms, is at the election and risk of the Holder. Such
delivery will be deemed made only when actually received by the Information
Agent. A signature guarantee must be by a firm that is a member of a registered
national securities exchange or a member in good standing of the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office or correspondent in the United States.
Each Consent form should be sent to the Information Agent, as follows:
Georgeson Shareholder Communications Inc.
17 State Street
10th Floor
New York, New York 10004
Facsimile Transmission: 212-440-9009
Telephone Number: 212-440-9800 (collect)
HOLDERS OF NOTES WHO WISH TO CONSENT SHOULD MAIL, HAND DELIVER, SEND BY
OVERNIGHT COURIER, OR TELECOPY THEIR PROPERLY COMPLETED AND EXECUTED CONSENT
FORMS TOGETHER WITH OTHER REQUIRED DOCUMENTS TO THE INFORMATION AGENT IN
ACCORDANCE WITH THE INSTRUCTIONS SET FORTH HEREIN AND THEREIN. CONSENT FORMS
SHOULD BE DELIVERED TO THE INFORMATION AGENT AND NOT TO THE COMPANY, THE
SOLICITATION AGENT OR THE TRUSTEE. HOWEVER, THE COMPANY RESERVES THE RIGHT TO
ACCEPT ANY CONSENT RECEIVED BY THE COMPANY, THE SOLICITATION AGENT OR THE
TRUSTEE.
IN NO EVENT SHOULD A HOLDER TENDER OR DELIVER NOTES.
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Conditions of the Solicitation
The Company shall not be deemed to have accepted any Consents unless and
until the Second Supplemental Indenture is executed by the Company and the
Trustee.
Revocation of Consents
Any Holder of Notes as to which a Consent has been given may revoke such
Consent as to such Notes or any portion of such Notes (in integral multiples of
$1,000) by filing a written notice of revocation with the Information Agent at
the address set forth above, prior to the later of the Expiration Date and the
time that the Trustee receives from the Company an officer's certificate in
accordance with the Indenture certifying to receipt of the Requisite Consents.
The transfer of Notes will not have the effect of revoking the election made in
any Consent form theretofore validly given by a Holder of such Notes, and each
Consent will be counted notwithstanding any transfer of the Notes to which such
Consent relates, unless the procedure for revoking Consents described below has
been complied with.
A written notice of revocation, to be effective, must (i) contain the name
of the Registered Holder, the certificate numbers, if any, to which such
revocation relates, the principal amount of Notes to which such revocation
relates and the signature of a Holder (with such signature, and the signatures
in any accompanying proxy, notarized or guaranteed as described above) and (ii)
be accompanied by a properly completed irrevocable proxy if such Holder is not
the Registered Holder of such Notes.
The revocation (or, if the Holder is not the Registered Holder, the
accompanying irrevocable proxy), to be effective, must be executed by the
Registered Holder of such Notes in the same manner as the name of the Registered
Holder appears on the Notes to which the revocation relates. If a revocation is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation, or other person acting in a fiduciary or
representative capacity, such person must so indicate when signing and must
submit with the revocation appropriate evidence of authority to execute the
revocation. A revocation of the Consent shall be effective only as to the Notes
listed on the revocation and only if such revocation complies with the
provisions of this Solicitation Statement. Only a Holder of Notes is entitled to
revoke a Consent previously given. A beneficial owner of Notes other than the
Registered Holder must arrange with the Registered Holder to execute and deliver
on his or her behalf a revocation of any Consent already given with respect to
such Notes or obtain an irrevocable proxy from the Registered Holder authorizing
such beneficial holder to revoke such Consent in accordance with the procedures
described herein. A purported notice of revocation that is not received by the
Information Agent in a timely fashion and accepted by the Information Agent as a
valid revocation will not be effective to revoke a Consent previously given.
A revocation of a Consent may only be rescinded by the execution and
delivery of a new Consent. A Holder who has delivered a revocation may
thereafter deliver a new
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Consent by following one of the described procedures at any time prior to the
Expiration Date.
Prior to the execution of the Second Supplemental Indenture, the Company
intends to consult with the Information Agent to determine whether such
Information Agent has received any revocations of Consents. The Company reserves
the right to contest the validity of any such revocations.
Assistance; Additional Materials
Questions relating to the procedure for consenting as well as requests for
assistance or for additional copies of the Solicitation Statement or the Consent
form may be directed to the Information Agent at the address set forth above.
Solicitation Agent
The Company has retained CSFB as its Solicitation Agent in connection with
the Solicitation. CSFB has not been retained to render an opinion as to the
fairness of the Solicitation. CSFB will receive a customary fee in connection
with the Solicitation. In addition, the Company will reimburse CSFB for
reasonable out-of-pocket expenses and has agreed to indemnify CSFB against
certain liabilities and expenses. Questions regarding the Solicitation should be
directed to CSFB at the following address: 277 Park Avenue, New York, New York,
10172, attention: Marc Warm, (212) 892-7179 or (800) 922-9004 (ext. 7179) or
Jeff Dorst, (212) 538-8474 or (800) 820-1653.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain of the anticipated federal
income tax consequences to the Registered Holders and beneficial owners of the
Notes (collectively, the "Note Holders") arising from the Consent Payment and
the Proposed Amendment. The tax treatment of a Note Holder might vary depending
upon such Note Holder's particular situation, and certain Note Holders,
including foreign persons or entities, insurance companies, tax-exempt
organizations, financial institutions and dealers in securities, might be
subject to special rules not discussed below. In addition, this discussion does
not consider the effect of any foreign, state or other tax laws that may be
applicable to particular Note Holders. Further, this summary assumes that Note
Holders hold their Notes as "capital assets" (generally, property held for
investment) within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended (the "Code").
This summary is based on the Code and applicable Treasury Regulations,
rulings, administrative pronouncements and decisions as of the date hereof, all
of which are subject to change or different interpretations at any time with
possible retroactive effect.
The federal income tax consequences of the adoption of the Proposed
Amendment and the receipt of the Consent Payment will depend on whether a
constructive exchange of Notes for new Notes having modified terms is deemed to
have occurred for federal income tax purposes as a result of the Proposed
Amendment or the
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payment of the Consent Payment. Treasury Regulations promulgated under section
1001 of the Code provide that such a deemed exchange occurs if a "significant
modification" in the terms of the debt instrument has occurred, taking into
account all relevant facts and circumstances, including the payment of the
Consent Payment.
Under the governing Treasury Regulations, a "significant modification" of a
debt instrument results in a deemed exchange, whereas a "modification" that is
not "significant" is not treated as a deemed exchange. Although the Treasury
Regulations establish, as a general rule, that a modification is significant if
the legal rights or obligations that are altered and the degree to which they
are altered are economically significant, the Treasury Regulations further
provide that the addition, deletion or alteration of customary accounting or
financial covenants relating to a debt instrument does not result in a
significant modification of the debt instrument. The Treasury Regulations also
provide that more substantial amendments to the terms of a debt instrument such
as a release, substitution or addition of collateral as security for a recourse
debt or a change in the priority of a debt instrument will result in a
substantial modification only if there is a substantial impairment or
enhancement of the obligor's capacity to meet its payment obligations under the
debt instrument from an adequate capacity to a primarily speculative capacity or
vice versa. Under the Treasury Regulations, a change in the annual yield of a
debt instrument, including a change in the yield that occurs as a result of
payments made by the issuer to the holders as consideration for modification of
the debt instrument, such as the Consent Payment, will constitute a significant
modification and result in a deemed exchange if the annual yield on the debt
instrument is increased by more than the greater of (a) 0.25% or (b) 5% of the
annual yield of the unmodified instrument, measured as of the date of the
modification.
The Company believes that the adoption of the Proposed Amendment and the
payment of the Consent Payment should not result in a significant modification
of the Notes and thus should not create a deemed exchange for federal income tax
purposes. However, in the absence of judicial authority on point, there can be
no assurance as to this result.
There is no direct authority determining the federal income tax
consequences of a Consent Payment. A Note Holder who receives a Consent Payment
might be treated as receiving a fee to obtain its consent (or waiver of rights)
or as receiving additional interest with respect to the Notes. In such event, a
Note Holder would recognize ordinary income equal to the amount of such payment.
The Consent Payment may alternatively be treated as a separate payment in
exchange for certain rights of the Note Holders, in which case a Note Holder
would not recognize any taxable income currently, but would be required to
reduce its tax basis in its Notes by the amount of the Consent Payment received.
The Company intends to treat the Consent Payment for federal income tax purposes
as a fee paid to Note Holders.
Backup withholding at the rate of 31% may apply with respect to the Consent
Payment unless the Note Holder (i) is a corporation or comes within certain
other exempt categories and, when required, demonstrates this fact or (ii)
provides a correct taxpayer identification number, certifies as to no loss of
exemption from backup withholding and
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otherwise complies with applicable requirements of the backup withholding rules.
A Note Holder who does not provide his correct taxpayer identification number
may be subject to penalties imposed by the Internal Revenue Service. Any amount
withheld under these rules will be creditable against the Note Holder's federal
income tax liability provided the required information is furnished to the
Internal Revenue Service in a timely manner.
The preceding discussion of certain federal income tax consequences is
intended for general information only, and does not constitute tax advice. Each
Note Holder should consult his or her own tax adviser as to the federal, state,
local and foreign tax consequences to him or her of the Consent Payment and the
Proposed Amendment.
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ANNEX A
THE PROPOSED AMENDMENT
The following is the text of the Proposed Amendment to the "Restricted
Payments" covenant of the Indenture. The following is qualified in its entirety
by reference to the Second Supplemental Indenture, copies of which may be
obtained without charge from the Information Agent. Capitalized terms not
otherwise defined in this Annex A have the meanings assigned thereto in the
Indenture.
If the Proposed Amendment is adopted, the following section will be amended
in the First Supplemental Indenture, effective as of the date of the Company's
acceptance of the Consents, as follows (strike-through indicates text to be
deleted and double underline indicates text to be added):
[Only added text is shown.]
Section 5.01 Limitations on Restricted Payments. Until the Notes are
rated Investment Grade by both Rating Agencies, after which time the following
covenant no longer shall be binding on the Company or any Restricted Subsidiary:
(a) neither the Company nor any of its Restricted Subsidiaries shall,
directly or indirectly, make any Restricted Payment, if, after giving effect
thereto on a pro forma basis:
(i) the Company could not Incur $1.00 of additional Indebtedness
pursuant to provisions described in paragraph (b) of Section 5.02 hereof;
(ii) a Default or an Event of Default would occur or be continuing; or
(iii) the aggregate amount of all Restricted Payments, including such
proposed Restricted Payment, made by the Company and its Restricted
Subsidiaries, from and after the Issue Date and on or prior to the date of
such Restricted Payment, shall exceed the sum (the "Basket") of:
(A) 50% of Consolidated Net Income of the Company for the period
(taken as one accounting period), commencing with the first full
fiscal quarter which includes the Issue Date, to and including the
fiscal quarter ended immediately prior to the date of each calculation
for which internal financial statements are available (or, if
Consolidated Net Income for such period is negative, then minus 100%
of such deficit); plus
(B) 100% of the amount of any Indebtedness of the Company or a
Restricted Subsidiary Incurred after the Issue Date that is converted
into or exchanged for Qualified Capital Stock of the Company after the
Issue Date; plus
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(C) to the extent that any Restricted Investment made after the
date of this First Supplemental Indenture is sold for cash or
otherwise reduced or liquidated or repaid for cash, in whole or in
part, the lesser of (1) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any) and
(2) the initial amount of such Restricted Investment; plus
(D) unless accounted for pursuant to clause (B) above, 100% of
the aggregate net proceeds (after payment of reasonable out-of-pocket
expenses, commissions and discounts incurred in connection therewith)
received by the Company from the sale or issuance (other than to a
Subsidiary of the Company) of its Qualified Capital Stock after the
Issue Date and on or prior to the date of such Restricted Payment;
plus
(E) with respect to any Unrestricted Subsidiary that is
redesignated as a Restricted Subsidiary after the Issue Date in
accordance with the definition of Unrestricted Subsidiary (so long as
the designation of such Subsidiary as an Unrestricted Subsidiary was
treated as a Restricted Payment made after the Issue Date and only to
the extent not included in the calculation of Consolidated Net
Income), an amount equal to the lesser of (x) the book value in
accordance with GAAP of the Company's or a Restricted Subsidiary's
Investment in such Subsidiary, and (y) the Designation Amount at the
time of such Subsidiary's designation as an Unrestricted Subsidiary;
plus
(F) 100% of tax benefits, if any, for the period (taken as one
accounting period), commencing with the first full fiscal quarter
which includes the Issue Date, realized by the Company from stock
option exercises and from the issuance of the Company's Qualified
Capital Stock pursuant to equity-based employee benefit plans that are
recorded as an increase to shareholders' equity in accordance with
GAAP; plus
(G) $50,000,000.
(b) The foregoing clause (a) does not prohibit:
(i) the payment of any dividend within 60 days after the date of its
declaration if such dividend could have been made on the date of its
declaration in compliance with the foregoing provisions;
(ii) the payment of cash dividends or other distributions to any
Equity Investor or joint venture participant of a Restricted Subsidiary
with respect to a class of Capital Stock of such Restricted Subsidiary or
joint venture owned by such Equity Investor or joint venture participant so
long as the Company or its Restricted Subsidiaries simultaneously receive a
dividend or distribution with respect to their Investment in such
Restricted Subsidiary or joint venture either in U.S. Legal Tender or the
same form as the dividend or distribution received by
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such Equity Investor or joint venture participant and in proportion to
their proportionate interest in the same class of Capital Stock of such
Restricted Subsidiary (or in the case of a joint venture that is a
partnership or a limited liability company, as provided for in the
documentation governing such joint venture), as the case may be;
(iii) repurchases or redemptions of Capital Stock of the Company from
any former directors, officers and employees of the Company in the
aggregate up to $3,000,000 during any calendar year (provided, however,
that any amounts not used in any calendar year may be used in any
subsequent year);
(iv) the retirement of Capital Stock of the Company or the retirement
of Indebtedness of the Company, in exchange for or out of the proceeds of a
substantially concurrent sale (other than a sale to a Subsidiary of the
Company) of, other shares of its Qualified Capital Stock and the retirement
of Capital Stock or Indebtedness of a Restricted Subsidiary in exchange for
or out of the proceeds of a substantially concurrent sale of its Qualified
Capital Stock, provided that, in each case, the amount of any such proceeds
is excluded for purposes of clause (a)(iii)(D) above;
(v) repurchases by the Company of Capital Stock of the Company (from
================================================================
Persons other than officers or directors of the Company) in one or more
=======================================================================
open market and/or privately negotiated transactions of up to $70,000,000
=========================================================================
in the aggregate at any time or from time to time on or before July 31,
=======================================================================
2001; provided, that any such repurchases not made pursuant to this clause
==========================================================================
(v) on or before July 31, 2001 may not be made at any subsequent time.
======================================================================
Any Restricted Payment made in accordance with clauses (i) and (iii) of
this paragraph shall reduce the Basket. In calculating the Basket, any
Restricted Payment not made in cash and any non-cash amounts received for
purposes of clause (D) shall be valued at fair market value as determined in
good faith by the Board of Directors, whose determination shall be conclusive
and whose resolution with respect thereto shall be delivered to the Trustee
promptly after the adoption thereof.
25
