SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------------------
FORM 10-Q
(mark one)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the Quarter Ended
April 2, 1994.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
Commission File Number 1-8002
THERMO ELECTRON CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 04-2209186
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
81 Wyman Street, P.O. Box 9046
Waltham, Massachusetts 02254-9046
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617)622-1000
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of Common Stock, as of the latest
practicable date.
Class Outstanding at April 29, 1994
----------------------------- -----------------------------
Common Stock, $1.00 par value 48,273,963
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
PART I - Financial Information
Item 1 - Financial Statements
(a) Consolidated Balance Sheet - Assets as of April 2, 1994 and
January 1, 1994 (In thousands)
April 2, January 1,
1994 1994
---------- ----------
Current Assets:
Cash and cash equivalents $ 257,554 $ 325,744
Short-term available-for-sale investments,
at market value (amortized cost of
$341,493) (Note 4) 342,460 -
Short-term investments - 374,450
Accounts receivable, net 307,745 267,377
Unbilled contract costs and fees 35,188 32,574
Inventories:
Raw materials and supplies 133,941 110,437
Work in process and finished goods 100,460 82,385
Prepaid income taxes 53,977 39,258
Prepaid expenses 13,621 12,318
---------- ----------
1,244,946 1,244,543
---------- ----------
Assets Related to Projects Under Construction:
Restricted funds - 34,100
Facilities under construction - 128,040
---------- ----------
- 162,140
---------- ----------
Property, Plant and Equipment, at Cost 740,707 581,894
Less: Accumulated depreciation and
amortization 144,761 134,423
---------- ----------
595,946 447,471
---------- ----------
Long-term Available-for-sale Investments,
at Market Value (amortized cost of
$67,910) (Note 4) 68,387 -
---------- ----------
Long-term Marketable Securities - 43,630
---------- ----------
Other Assets 103,793 102,347
---------- ----------
Cost in Excess of Net Assets of Acquired
Companies 555,699 473,579
---------- ----------
$2,568,771 $2,473,710
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
(a) Consolidated Balance Sheet - Liabilities and Shareholders'
Investment as of April 2, 1994 and January 1, 1994 (In thousands
except share amounts)
April 2, January 1,
1994 1994
---------- ----------
Current Liabilities:
Notes payable $ 46,181 $ 45,851
Accounts payable 102,585 85,278
Accrued payroll and employee benefits 59,070 49,029
Accrued income taxes 15,382 7,713
Accrued installation and warranty costs 28,405 26,049
Other accrued expenses 218,639 202,326
----------- -----------
470,262 416,246
----------- -----------
Deferred Income Taxes and Other Items 108,568 106,539
Liabilities Related to Projects Under
Construction:
Payables and accrued expenses - 10,680
Tax-exempt obligations - 142,069
----------- -----------
- 152,749
----------- -----------
Long-term Obligations:
Senior convertible obligations (Note 5) 275,000 275,000
Subordinated convertible obligations 258,831 238,386
Tax-exempt obligations 133,569 -
Nonrecourse tax-exempt obligations 108,800 108,800
Other 24,751 25,275
----------- -----------
800,951 647,461
----------- -----------
Minority Interest 297,982 277,681
----------- -----------
Common Stock of Subsidiary Subject to
Redemption ($15,390 redemption value) 14,584 14,511
----------- -----------
Shareholders' Investment:
Common stock, $1 par value, 100,000,000
shares authorized; 48,073,252 and
47,950,580 shares issued 48,073 47,951
Capital in excess of par value 459,462 467,076
Retained earnings 384,679 362,138
----------- -----------
892,214 877,165
Treasury stock at cost, 39,113 and 31,898
shares (1,549) (1,212)
Cumulative translation adjustment (11,646) (13,591)
Deferred compensation (3,515) (3,839)
Net unrealized gain on available-for-sale
investments (Note 4) 920 -
----------- -----------
876,424 858,523
----------- -----------
$2,568,771 $2,473,710
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements.
3PAGE
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
(b) Consolidated Statement of Income for the three months ended
April 2, 1994 and April 3, 1993 (In thousands except per share
amounts)
Three Months Ended
-------------------
April 2, April 3,
1994 1993
--------- ---------
Revenues:
Product sales and revenues $311,208 $256,207
Service revenues 32,386 29,574
Research and development contract revenues 6,882 6,982
--------- ---------
350,476 292,763
--------- ---------
Costs and Expenses:
Cost of products 185,020 160,688
Cost of services 23,044 21,998
Expenses for research and development and new
lines of business (a) 23,384 20,975
Selling, general and administrative expenses 82,090 66,618
Costs associated with divisional and product
restructuring - 5,845
--------- ---------
313,538 276,124
--------- ---------
Gain on Issuance of Stock by
Subsidiaries (Note 2) 8,494 11,101
Other Expense, Net (Note 3) (3,242) (3,268)
--------- ---------
Income Before Income Taxes and Minority Interest 42,190 24,472
Provision for Income Taxes 14,101 5,530
Minority Interest Expense 5,548 3,494
--------- ---------
Net Income $ 22,541 $ 15,448
========= =========
Earnings per Share:
Primary $ .47 $ .38
========= =========
Fully diluted $ .42 $ .34
========= =========
Weighted Average Shares:
Primary 47,959 40,580
========= =========
Fully diluted 59,320 52,330
========= =========
(a) Includes costs of:
Research and development contracts $ 5,542 $ 5,296
Internally funded research and development 16,839 14,769
Other expenses for new lines of business 1,003 910
--------- ---------
$ 23,384 $ 20,975
========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
(c) Condensed Consolidated Statement of Cash Flows for the three
months ended April 2, 1994 and April 3, 1993 (In thousands)
Three Months Ended
-------------------
April 2, April 3,
1994 1993
--------- ---------
Operating Activities:
Net cash provided by operating activities $ 19,010 $ 11,093
--------- ---------
Investing Activities:
Acquisitions, net of cash acquired (133,508) (86,519)
Purchases of property, plant and equipment (12,385) (13,241)
Proceeds from sale of property, plant and
equipment 1,269 792
Purchases of long-term investments - (15,744)
Proceeds from sale of long-term investments - 1,025
Purchases of available-for-sale investments (132,464) -
Proceeds from sale and maturities of
available-for-sale investments 148,539 -
Increase in short-term investments - (13,581)
Decrease in assets related to construction
projects 23,420 4,419
Other (9,009) 168
--------- ---------
Net cash used in investing activities (114,138) (122,681)
--------- ---------
Financing Activities:
Net proceeds from issuance of long-term
obligations 32,138 -
Repayment and repurchase of long-term
obligations (10,332) (696)
Proceeds from issuance of Company and
subsidiary common stock 24,181 52,420
Purchases of Company and subsidiary common
stock (19,068) (22,646)
Other (501) (324)
--------- ---------
Net cash provided by financing activities 26,418 28,754
--------- ---------
Exchange Rate Effect on Cash 520 (379)
--------- ---------
Decrease in Cash and Cash Equivalents (68,190) (83,213)
Cash and Cash Equivalents at Beginning of Period 325,744 190,601
--------- ---------
Cash and Cash Equivalents at End of Period $257,554 $107,388
========= =========
Cash Paid (Refunded) For:
Interest $ 15,885 $ 12,559
Income taxes $ 7,724 $ (1,739)
Noncash Financing Activities:
Conversions of convertible obligations $ 11,855 $ 10,960
The accompanying notes are an integral part of these consolidated
financial statements.
5PAGE
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
(d) Notes to Consolidated Financial Statements - April 2, 1994
1. General
The interim consolidated financial statements presented have been
prepared by Thermo Electron Corporation (the Company) without audit
and, in the opinion of management, reflect all adjustments of a normal
recurring nature necessary for a fair statement of (a) the results of
operations for the three-month periods ended April 2, 1994 and
April 3, 1993, (b) the financial position at April 2, 1994, and (c)
the cash flows for the three-month periods ended April 2, 1994 and
April 3, 1993. Interim results are not necessarily indicative of
results for a full year.
The consolidated balance sheet presented as of January 1, 1994 has
been derived from the consolidated financial statements which have
been audited by the Company's independent public accountants. The
consolidated financial statements and notes are presented as permitted
by Form 10-Q and do not contain certain information included in the
annual financial statements and notes of the Company. The consolidated
financial statements and notes included herein should be read in
conjunction with the financial statements and notes included in the
Company's Annual Report on Form 10-K for the fiscal year ended
January 1, 1994, filed with the Securities and Exchange Commission.
2. Transactions in Stock of Subsidiaries
"Gain on issuance of stock by subsidiaries" in the accompanying
statement of income for the three-month period ended April 2, 1994,
resulted primarily from the following:
A public offering of 1,610,000 shares of ThermoTrex Corporation
common stock in March 1994 at $15.375 per share for net proceeds
of $23.0 million resulted in a gain of $7.3 million.
The conversion of $3.7 million of Thermedics Inc. 6 1/2%
subordinated convertible debentures, convertible at $10.42 per
share, into 357,597 shares of Thermedics Inc. common stock
resulted in a gain of $1.0 million.
6PAGE
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
(d) Notes to Consolidated Financial Statements - April 2, 1994
(continued)
3. Other Expense
The components of "Other expense, net" in the accompanying
statement of income are:
Three Months Ended
------------------
April 2, April 3,
(In thousands) 1994 1993
--------------------------------------------------------------------
Royalty income $ 400 $ 565
Interest income 7,199 5,118
Interest expense (10,289) (7,856)
Equity in losses of unconsolidated subsidiaries (1,207) (1,091)
Gain (loss) on sale of investments 611 (47)
Other income, net 44 43
-------- --------
$(3,242) $(3,268)
======== ========
4. Available-for-sale Investments
Effective January 2, 1994, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." In accordance with SFAS
No. 115, the Company's debt and marketable equity securities are
considered "Available-for-sale investments" in the accompanying
balance sheet and are carried at market value, with the difference
between cost and market value, net of related tax effects, recorded
currently as a component of shareholders' investment titled "Net
unrealized gain on available-for-sale investments." "Net unrealized
gain on available-for-sale investments" consists of (1) an unrealized
gain, net of related tax effects, of $2,868,000 that was recorded as a
cumulative effect of change in accounting principle adjustment and
(2) an unrealized loss, net of related tax effects, of $1,948,000
relating to the decline in the market value of available-for-sale
investments for the three-month period ended April 2, 1994.
7PAGE
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
(d) Notes to Consolidated Financial Statements - April 2, 1994
(continued)
4. Available-for-sale Investments (continued)
The aggregate market value, cost basis, and gross unrealized gains
and losses of short- and long-term available-for-sale investments, by
major security type as of April 2, 1994, are as follows:
Gross Gross
Market Cost Unrealized Unrealized
(In thousands) Value Basis Gains Losses
----------------------------------------------------------------------
Government agency
securities $127,356 $127,159 $ 801 $ 604
Corporate bonds 205,795 205,606 875 686
Tax-exempt securities 31,378 31,702 2 326
Other 46,318 44,936 1,989 607
-------- -------- -------- --------
$410,847 $409,403 $ 3,667 $ 2,223
======== ======== ======== ========
Available-for-sale investments in the accompanying balance sheet at
April 2, 1994, include $98,087,000 with contractual maturities of one
year or less, $259,314,000 with contractual maturities of one year
through five years, and $53,446,000 with contractual maturities over
five years. Expected maturities may differ from contractual maturities
as a result of the Company's intent to sell these securities prior to
maturity and as a result of put and call options that enable either
the Company and/or the issuer to redeem these securities at an earlier
date.
The cost of available-for-sale investments that were sold was based
on specific identification in determining realized gains and losses
recorded in the accompanying statement of income. Gain on sale of
investments for the three-month period ended April 2, 1994 resulted
from gross realized gains of $894,000 and gross realized losses of
$283,000 relating to the sale of available-for-sale investments.
5. Issuance of Senior Convertible Obligations
On April 15, 1994, the Company issued and sold $345.0 million
principal amount of 5% senior convertible debentures due 2001. The
debentures are convertible into shares of the Company's common stock
at a conversion price of $47 1/4 per share.
8PAGE
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
First Quarter 1994 Compared With First Quarter 1993
Sales for the first quarter of 1994 were $350.5 million, an
increase of $57.7 million, or 20%, over the first quarter of 1993.
Segment income was $42.0 million, compared with $27.3 million in 1993,
an increase of 54%. (Segment income is income before corporate general
and administrative expenses, costs associated with divisional and
product restructuring, other income and expense, minority interest
expense, and income taxes.)
Sales from the Instruments segment were $147.6 million in 1994, an
increase of $23.7 million, or 19%, over the first quarter of 1993.
Sales increased principally due to acquisitions made by Thermo
Instrument Systems Inc. during 1993 and due to its acquisition of
several businesses within the EnviroTech Measurements & Controls group
of Baker Hughes Incorporated on March 16, 1994. Segment income margin
(segment income margin is segment income as a percentage of sales) was
17.9% in 1994, compared with 16.6% in 1993. Segment income margin
improved principally due to changes in product mix and continuing
efforts to reduce costs.
Sales from the Alternative-energy Systems segment were $62.0
million in 1994, an increase of $6.5 million, or 12%, over 1993.
Within this segment, sales from the Energy Systems group, which
consist of revenues from the operation of power plants and a
waste-recycling facility and, in 1993, revenues from construction of
large alternative-energy facilities, increased to $32.2 million from
$29.3 million in 1993. Increased revenues from the Energy Systems
group resulted primarily from an additional power plant and a waste-
recycling facility in operation during the first quarter of 1994 and
annual contractual energy rate increases under certain power sales
contracts. In addition, revenues increased due to improved performance
and the absence of utility-imposed curtailments of power output at two
California plants. These increases were offset in part by the absence
of construction revenues in the first quarter of 1994, compared with
$6.8 million in 1993, and by a decrease of $1.8 million in revenues
from an alternative-energy facility that suffered major damage to its
turbine-generator in January 1994, which will interrupt its operations
for approximately six months. The Company expects that the cost of
repairs and lost profits will be substantially reimbursed under the
terms of its business insurance policies. Sales from Thermo Power
Corporation were $22.0 million, compared with $18.7 million in 1993.
This increase resulted primarily from increased demand for industrial
refrigeration systems. Sales of Peter Brotherhood Ltd. steam turbines
and compressors were slightly above 1993 levels.
9PAGE
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
First Quarter 1994 Compared With First Quarter 1993 (continued)
Segment income from the Alternative-energy Systems segment was $3.5
million in 1994, an increase of $6.2 million over a loss of $2.7
million in 1993. The Energy Systems group had segment income of $3.0
million, an increase of $6.4 million, compared with a loss of $3.4
million in 1993. The Energy Systems group improvement resulted
primarily from an additional power plant in operation in the first
quarter of 1994, annual contractual energy rate increases under
certain power sales contracts, and lower lease expense, offset in part
by depreciation expense, resulting from the December 1993 purchase of
the Delano I facility in Delano, California. To a lesser extent, this
improvement resulted from improved performance and the absence of
utility-imposed curtailments of power output at two California plants.
Segment income increased $0.1 million at Thermo Power, while segment
income margins declined to 3.8% from 4.0% in 1993, as a result of
increased pricing pressures for industrial refrigeration systems.
Segment income declined $0.4 million at Peter Brotherhood due to
increased price competition.
Sales in the Process Equipment segment were $43.0 million in 1994,
compared with $37.5 million in 1993, an increase of 15%. Within this
segment, sales from Thermo Fibertek Inc. were $35.2 million, compared
with $28.2 million in 1993. Sales at Thermo Fibertek increased by $8.9
million as a result of the acquisition of the Engineered Systems
Division of Albany International Corp. in June 1993. This increase was
offset in part by a decline of $1.5 million in sales of environmental
process systems, which are sold by Thermo Fibertek's Vickerys
subsidiary, due to lower demand. Sales of Holcroft heat-treating
systems, which remain depressed, were $4.1 million, compared with $5.1
million in 1993. Sales of automated electroplating equipment from the
Company's wholly owned Napco, Inc. subsidiary declined to $3.7 million
from $4.2 million in 1993, due to continuing weak demand. The Process
Equipment segment income margin was 9.6%, compared with 8.8% in 1993.
Thermo Fibertek's segment income margin improved to 11.5% from 11.1%
in 1993, primarily due to changes in product mix at Thermo Fibertek's
European operations and, to a lesser extent, at Thermo Fibertek's
North American accessories businesses. Segment income declined
slightly at Holcroft as a result of lower sales, and improved slightly
at Napco as a result of efforts taken to reduce costs.
Sales in the Biomedical Products segment were $41.0 million in
1994, an increase of $10.0 million over $31.0 million in 1993. Sales
increased $3.9 million due to the inclusion of sales from CBI
Laboratories, Inc., a manufacturer of skin-care and other
personal-care products, which was acquired by the Company's ThermoTrex
Corporation subsidiary in December 1993. Sales of ThermoTrex's
mammography and biopsy systems increased $3.3 million, sales of Thermo
Cardiosystems Inc.'s implantable left ventricular-assist devices
10PAGE
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
First Quarter 1994 Compared With First Quarter 1993 (continued)
increased $1.4 million, and sales of Thermedics Inc.'s fragrance
samplers increased $1.5 million, due to increased demand. Segment
income margin improved to 6.2%, compared with 5.9% in 1993, as a
result of the increased sales.
Sales in the Services segment were $32.4 million in 1994, compared
with $29.6 million in 1993. Within this segment, sales from
soil-remediation services increased $3.0 million, primarily as a
result of higher production at regional centers in operation longer
than one year and, to a lesser extent, the acquisition of a fluids
recovery company by Thermo Remediation Inc. in November 1993. Sales of
metallurgical services were about the same level as 1993, while sales
of environmental sciences and engineering services declined by 8% as a
result of project delays due to severe weather conditions in the
Northeast and as a result of reduced or delayed government spending.
Segment income margin improved to 10.5% from 8.5% in 1993 due to
increased sales and efforts to reduce costs.
Sales from the Advanced Technologies segment were $25.3 million,
compared with $15.6 million in 1993. Sales increased $4.2 million due
to increased demand, principally from one customer, for Thermedics'
high-speed product quality assurance system. Sales also increased $3.8
million due to the inclusion of sales from Comtest Instrumentation,
which was acquired by Thermo Voltek Corp. in August 1993, and sales
from Ramsey Technology Inc., which was acquired by Thermedics on March
16, 1994. Segment income margin was 7.7%, compared with 11.3% in 1993.
This decline resulted primarily from higher costs associated with the
worldwide service organization for Thermedics' high-speed product
quality assurance system and, to a lesser extent, increased research
and development expenses at ThermoTrex to develop and commercialize
new products.
In 1983, the Company adopted a strategy of spinning out certain of
its businesses into separate subsidiaries and having these
subsidiaries sell a minority interest to outside investors. The
Company believes that this strategy provides additional motivation and
incentives for the management of the subsidiaries through the
establishment of subsidiary-level stock option incentive programs, as
well as capital to support the subsidiaries' growth. As a result of
the sale of stock by subsidiaries, the issuance of shares by
subsidiaries upon conversion of indebtedness, and similar
transactions, the Company recorded gains of $8.5 million in the first
quarter of 1994 and $11.1 million in 1993. Although the Company
expects to continue this strategy in the future, its goal is to
continue increasing segment income over the next few years so that
gains generated by sales of stock by its subsidiaries will represent a
decreasing portion of net income. The size and timing of these
11PAGE
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
First Quarter 1994 Compared With First Quarter 1993 (continued)
transactions are dependent on market and other conditions that are
beyond the Company's control. Accordingly, there can be no assurance
that the Company will be able to generate gains from such transactions
in the future.
"Other expense, net" in the accompanying statement of income
includes equity in losses of unconsolidated subsidiaries, which
represents the Company's portion of results from entities in which the
Company's ownership percentage is 50% or less, primarily the operation
of the Dade County cogeneration facility. This plant, which is
operated by a 50/50 joint venture of subsidiaries of the Company and
Rolls-Royce, Inc., supplies electricity and chilled water to the Dade
County Downtown Government Center complex in Miami, Florida. The
complex is not currently using the plant's full capacity, and efforts
continue to market the excess power and cooling services. The loss was
$1.2 million in 1994 and $1.1 million in 1993.
Financial Condition
Liquidity and Capital Resources
Consolidated working capital was $774.7 million at April 2, 1994,
compared with $828.3 million at January 1, 1994. Included in working
capital were cash and short-term investments of $600.0 million at
April 2, 1994, compared with $700.2 million at January 1, 1994. In
addition, at April 2, 1994, the Company had $68.4 million of long-term
marketable securities, compared with $43.6 million at January 1, 1994.
During the first quarter of 1994, the Company expended $133.5
million, net of cash acquired, for acquisitions, and $12.4 million for
purchases of property, plant and equipment. In early 1994, the Company
completed construction of a waste-recycling facility in San Diego
County, California. Because this facility was not sold to a third
party, the Company is obligated under its service agreement with San
Diego County to contribute $15.0 million of equity to the project in
1994. The Company has no material commitments for purchases of
property, plant and equipment and expects that, for 1994, such
expenditures will approximate the 1993 level. During the first quarter
of 1994, the Company and its majority-owned subsidiaries expended
$19.1 million to purchase common stock of the Company and its
subsidiaries. The Company expects that these purchases will continue.
Subsequent to the end of the quarter, the Company issued and sold
$345.0 million principal amount of 5% senior convertible debentures
due 2001.
12PAGE
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
Liquidity and Capital Resources (continued)
A substantial percentage of the Company's consolidated cash and
short-term investments is held by subsidiaries that are not wholly
owned by the Company. This percentage may vary significantly over
time. Pursuant to the Thermo Electron Corporate Charter (the Charter),
to which each of the majority-owned subsidiaries of the Company is a
party, the combined financial resources of Thermo Electron and its
subsidiaries allow the Company to provide banking, credit, and other
financial services to its subsidiaries so that each member of the
Thermo Electron group of companies may benefit from the financial
strength of the entire organization. Toward that end, the Charter
states that each member of the group may be required to provide
certain credit support to the consolidated entity. Nonetheless, the
Company's ability to access assets held by its majority-owned
subsidiaries through dividends, loans, or other transactions is
subject in each instance to a fiduciary duty owed to the minority
shareholders of the relevant subsidiary. In addition, dividends
received by Thermo Electron from a subsidiary that does not
consolidate with Thermo Electron for tax purposes are subject to tax.
Therefore, under certain circumstances, a portion of the Company's
consolidated cash and short-term investments may not be readily
available to Thermo Electron Corporation or certain of its
subsidiaries.
The Company intends for the foreseeable future to maintain at least
80% ownership of its Thermo Instrument and Thermo Fibertek
subsidiaries, which is required in order to continue to file a
consolidated federal income tax return with these subsidiaries. In
addition, the Company intends to maintain greater than 50% ownership
of its other majority-owned subsidiaries so that the Company may
continue to consolidate these subsidiaries for financial reporting
purposes. This may require the purchase by the Company of additional
shares or convertible debentures of these companies from time to time
as the number of outstanding shares issued by these companies
increases, either in the open market or directly from the
subsidiaries, at prevailing market prices. If the Company were to lose
its ability to consolidate for tax purposes with Thermo Instrument
and/or Thermo Fibertek, the Company would incur an additional tax
liability, which could be substantial.
13PAGE
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
PART II - Other Information
Item 1 - Legal Proceedings
The Company participates in the operation of the Dade County
(Florida) Downtown Government Center cogeneration facility through a
joint venture with Rolls-Royce, Inc. The joint venture's previously
disclosed lawsuit against Dade County (see Item 3 of the Company's
Annual Report on Form 10-K for the year ended January 1, 1994),
including counterclaims by Dade County, have been dismissed with
prejudice by agreement of the parties. The terms of the dismissal
include: (a) payment by Dade County, net of amounts paid by the joint
venture, of $1,500,000, (b) (i) a joint request, filed on March 31,
1994, that the Federal Energy Regulatory Commission ("FERC") hold its
proceedings in abeyance for 60 days, and (ii) a joint request that
FERC vacate its previous order, which the parties contemplate filing
on or before May 30, 1994, and (c) a joint request that the Florida
Public Service Commission ("FPSC") dismiss the petition brought before
it by Dade County, which request has not yet been acted upon by the
FPSC.
The settlement also contemplates certain initiatives designed to
improve the financial performance of the joint venture's facility,
including one or more of the following: (a) Dade County creating a
municipal utility to purchase all of the facility's power, and if
Florida Power & Light ("FPL") refuses to wheel excess power, obtaining
an order from FERC requiring FPL to wheel electricity in excess of
that used at the Downtown Government Center project to other County
facilities, (b) the joint venture's acquisition of the generating
equipment from Florida Energy Partners and subsequent transfer of such
equipment to Dade County, and if FPL refuses self-service wheeling,
the obtaining of an order from FPSC requiring FPL to permit
self-service wheeling by the County of excess electricity from the
facility to other County facilities, and (c) construction by the joint
venture, at its expense, of a transmission line to transmit
electricity to other County facilities.
Because these initiatives have numerous and complex conditions and
requirements associated with them, the implementation of some of which
may be opposed by FPL or which need the approval of other third
parties, no assurances can be given as to the likelihood that any one
of them will be successful. Moreover, if either FERC or FPSC does not
grant the aforementioned requests, FERC or FPSC, as the case may be,
could impose liabilities or otherwise issue rulings which could result
in the joint venture being in default under its arrangements with
Florida Energy Partners, the potential consequences of which include
facility regulation or shut-down, refund liability and other
consequences as described in the Company's last Form 10-K.
Item 6 - Exhibits
See Exhibit Index on the page immediately preceding exhibits.
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FORM 10-Q
April 2, 1994
THERMO ELECTRON CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized as of the 9th day
of May 1994.
THERMO ELECTRON CORPORATION
Paul F. Kelleher
---------------------------
Paul F. Kelleher
Vice President, Finance
John N. Hatsopoulos
---------------------------
John N. Hatsopoulos
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Document Page
-------------- -------- ----
4.1 Fiscal Agency Agreement dated as of
April 15, 1994 between the Registrant and
Chemical Bank, pertaining to the Registrant's
5% Senior Convertible Debentures due 2001
11 Statement re: Computation of earnings per share
16<PAGE>
Exhibit 4.1
FISCAL AGENCY AGREEMENT
dated as of
April 15, 1994
between
THERMO ELECTRON CORPORATION
and
CHEMICAL BANK,
as Fiscal Agent
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FISCAL AGENCY AGREEMENT, dated as of April 15, 1994, between
THERMO ELECTRON CORPORATION, a corporation duly organized and
validly existing under the laws of the State of Delaware (the
"Company"), and CHEMICAL BANK, a banking corporation duly
organized and validly existing under the laws of the State of New
York (the "Fiscal Agent").
1. The Securities.
The Company has by a Subscription Agreement, dated
April 7, 1994 (the "Subscription Agreement"), between the Company
and the several managers named therein (the "Managers"), agreed
to issue U.S. $345,000,000 aggregate principal amount of its 5%
Senior Convertible Debentures Due 2001 (hereinafter referred to
as the "Securities"). The amount of Securities that may be
issued hereunder may be increased by agreement between the
Company and the Fiscal Agent, and such additional securities
shall be "Securities" hereunder. Interest on the Securities
shall be calculated on the basis of a 360 day year comprised of
twelve 30 day months. Except as set forth in the next sentence,
the Securities will initially be issued in temporary form, and
may subsequently be exchanged for Securities in printed
definitive form either as bearer Securities ("Bearer
Securities"), in denominations of U.S. $1,000 and U.S. $10,000
and with interest coupons attached, representing the semiannual
interest payable thereon, or as fully registered Securities
("Registered Securities", which term shall include, where the
context so requires, the Restricted Securities as hereinafter
defined), in denominations of U.S. $1,000 and integral multiples
thereof. In addition, Securities may be sold by the Managers (or
their affiliates) to qualified institutional buyers pursuant to
Rule 144A under the United States Securities Act of 1933 (the
"Securities Act of 1933") or another applicable exemption under
the Securities Act of 1933 in accordance with the terms of this
Agreement and the Subscription Agreement (the "Restricted
Securities", which may be in typewritten form and later exchanged
for a printed Security of an equivalent amount, and which, for
all purposes hereunder shall be a Definitive Security in the form
of a Registered Security). The Securities in definitive form
will be substantially in the form of Exhibit A hereto (the
"Definitive Securities"). The Securities will be convertible as
provided in Section 4 of the Definitive Securities and Section 7
hereof. The Securities may be redeemed by the Company as
provided in Section 3 of the Definitive Securities and Section 6
hereof. The temporary global debenture in respect of the
Securities will be issued in bearer form without coupons in the
aggregate principal amount of the entire issue of Securities
(less the aggregate principal amount of the Restricted Securities
concurrently issued), substantially in the form of Exhibit B
hereto (the "Global Security"). The Definitive Securities and
the Global Security shall contain such appropriate insertions,
omissions, substitutions and other variations as are required or
permitted by this Agreement and may have such letters, numbers or
other marks of identification and such legends or endorsements
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placed thereon as may, consistent herewith, be determined by the
officer of the Company executing such Securities, as evidenced by
his execution of such Securities.
2. Appointment of Agents and Security Registrar.
(a) The Company hereby appoints Chemical Bank, at
present having its principal corporate trust office at 55 Water
Street, New York, New York 10041 and having its main office in
London at Chemical Bank House, 125 London Wall, London EC2Y 5AJ,
England, as its fiscal agent in respect of the Securities upon
the terms and subject to the conditions herein set forth.
(Chemical Bank and its successor or successors as such fiscal
agent qualified and appointed in accordance with Section 12
hereof are herein called the "Fiscal Agent.") The Fiscal Agent
shall have the powers and authority granted to and conferred upon
it herein and in the Securities, and such further powers and
authority, acceptable to it, to act on behalf of the Company as
the Company may hereafter grant to or confer upon it.
(b) In addition, the Company hereby appoints Chemical
Bank at present located at 55 Water Street, New York, New York
10041 and having its main office in London at Chemical Bank
House, 125 London Wall, London EC2Y 5AJ, England, as its paying
agent in respect of the Securities upon the terms and subject to
the conditions herein set forth. (Chemical Bank and its
successor or successors as such paying agent qualified and
appointed in accordance with Section 12 hereof are herein called
the "Paying Agent.") The Paying Agent shall have the powers and
authority granted to and conferred upon it herein and in the
Securities, and such further powers and authority, acceptable to
it, to act on behalf of the Company as the Company may hereafter
grant to or confer upon it. As used herein, "paying agencies"
shall mean paying agencies maintained by the Company as provided
in Section 12(f) hereof.
(c) The Company hereby appoints Chemical Bank, at
present located at 55 Water Street, New York, New York 10041 and
having its main office in London at Chemical Bank House, 125
London Wall, London EC2Y 5AJ, England, as its conversion agent in
respect of the Securities upon the terms and subject to the
conditions herein set forth. (Chemical Bank and its successor or
successors as such conversion agent qualified and appointed in
accordance with Section 12 hereof are herein called the
"Conversion Agent", and the Paying Agent, the Conversion Agent,
the Transfer Agents (as herein defined) and the Fiscal Agent are
sometimes herein referred to severally as an "Agent" and,
collectively, as the "Agents"). The Conversion Agent shall have
the powers and authority granted to and conferred upon it herein
and in the Securities, and such further powers and authority,
acceptable to it, to act on behalf of the Company as the Company
may hereafter grant to or confer upon it. As used herein,
"conversion agencies" shall mean conversion agencies maintained
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by the Company and the Guarantor as provided in Section 12(f)
hereof.
(d) The Company shall cause to be kept at the
principal corporate trust office of the Fiscal Agent a register
(the registers maintained in such office and in any other office
or agency designated for such purpose (which office shall be
located outside of the United Kingdom) being herein sometimes
collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as the Company may
prescribe, the Company shall provide for the registration of
Registered Securities and of transfers of Registered Securities.
The Fiscal Agent is hereby appointed "Security Registrar" for the
purpose of registering Registered Securities and transfers of
Registered Securities as herein provided.
3. Registration and Transfer.
(a) Upon surrender for registration of transfer of any
Registered Security at any office or agency designated for such
purpose by the Company pursuant to Section 12(g) hereof, the
Company shall execute, and the Fiscal Agent shall authenticate
and register and make available for delivery, in the name of the
designated transferee or transferees, one or more new Registered
Securities of any authorized denominations and of a like
aggregate principal amount; provided however, prior to the date
which is three years after the date of original issuance of such
Registered Security, the Fiscal Agent shall not register the
transfer of any Registered Security unless:
(i) The Fiscal Agent shall have been advised in
writing by the Company that the provisions of Rule 144A under the
Securities Act of 1933 are available for resales of such
Security, and the registered holder presenting such Registered
Security for transfer, or its agent, shall have advised the
Fiscal Agent in writing that the person in whose name the
Registered Security is to be registered upon transfer (or, in the
case of a transfer to a nominee, each beneficial owner of such
Registered Security) is a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) and that
such transfer is in compliance with the exemption from
registration under the Securities Act of 1933 provided by said
rule; or
(ii) The registered holder presenting such
Registered Security for transfer, or its agent, shall have
advised the Fiscal Agent in writing that such Security is being
transferred in an Offshore Transaction (as defined in Regulation
S under the Securities Act of 1933) in compliance with the
exemption from registration under the Securities Act of 1933
provided by Regulation S and the address of the person in whose
name such Security is to be registered in the Security Register
upon transfer is an address outside the United States (as defined
in Regulation S); or
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(iii) The registered holder presenting such
Registered Security for transfer, or its agent, together with a
broker or dealer registered under Section 15 of the United States
Securities Exchange Act of 1934 shall each have advised the
Fiscal Agent in writing that (x) each person who will become a
beneficial owner of the Registered Security upon transfer is a
sophisticated institutional investor which is an "accredited
investor" as such term is defined in Regulation D under the
Securities Act, (y) no general solicitation or advertising was
made or used in connection with the offer and sale of such
Registered Security to such person(s) and (z) such institutional
investor has been informed that the Securities have not been
registered under the Securities Act of 1933 and are subject to
the restrictions on transfer set forth in the Securities and this
Agreement; or
(iv) The Fiscal Agent has received transfer
documentation indicating, and a written opinion of U.S. counsel
acceptable in form and substance to the Company confirming, that
the transfer is being made pursuant to an exemption from, or a
transaction not otherwise subject to, the registration
requirements of the Securities Act of 1933.
For purposes of this Paragraph 3(a), any such advice to the
Fiscal Agent in writing may be in the form of a letter, notice or
other written document or, with respect to clauses (i), (ii) and
(iii) above, by appropriate notation on the transfer notice set
forth on such Security.
(b) At the option of the holder of a Bearer Security,
Bearer Securities may be exchanged for Bearer Securities of other
authorized denominations and of a like aggregate principal amount
or for Registered Securities, of any authorized denominations and
of a like aggregate principal amount, upon surrender of the
Bearer Securities to be exchanged at any office or agency
designated for such purpose by the Company pursuant to Section
12(g), with all unmatured coupons and all matured coupons in
default thereto appertaining. If such holder is unable to
produce any such unmatured coupon or coupons or matured coupon or
coupons in default, such exchange may be effected if the Bearer
Securities are accompanied by payment in an amount equal to the
face amount of such missing coupon or coupons, or the surrender
of such missing coupon or coupons may be waived by the Company if
there be furnished to it such security or indemnity as the
Company may require to save it, the Fiscal Agent and any paying
agency harmless. If thereafter the holder of such Security shall
surrender to any paying agency any such missing coupon in respect
of which such a payment shall have been made, such holder shall
be entitled to receive the amounts of such payment.
At the option of the holder of a Registered Security,
Registered Securities may be exchanged for Registered Securities
of any other authorized denominations and of a like aggregate
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principal amount, upon surrender of the Registered Securities to
be exchanged at any office or agency designated for such purpose
by the Company pursuant to Section 12(g). Registered Securities
shall not be exchangeable into Bearer Securities. Whenever any
Securities are so surrendered for exchange, the Company shall
execute, and the Fiscal Agent shall authenticate and deliver, the
Registered Securities which the holder making the exchange is
entitled to receive.
(c) All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid obligations
of the Company, evidencing the same obligations, and entitled to
the same benefits under this Agreement, as the Securities
surrendered upon such registration of transfer or exchange.
(d) Every Registered Security presented for
registration of transfer or surrendered for exchange shall be
duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Fiscal Agent
and the Transfer Agent to which such Security is presented or
surrendered and the Security Registrar, duly executed by the
holder thereof or his attorney duly authorized in writing. In
the case of Registered Securities presented for transfer, all
such instruments shall comply with the provisions of Paragraph
(a) above. The registration of the transfer of a Registered
Security by the Security Registrar shall be deemed to
be the written acknowledgment of such transfer on behalf of the
Company.
(e) No service charge shall be made for any exchange
or registration of transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any exchange or
registration of transfer of Securities, other than exchanges
pursuant to Section 4 hereof or not involving any registration of
transfer.
(f) Neither the Company nor the Fiscal Agent nor any
of the offices or agencies designated for the purposes specified
in Section 12(f) nor any Transfer Agent shall be required (i) to
exchange Bearer Securities for Registered Securities during the
period between the close of business on the Record Date (as
defined in Section 5 hereof) and the opening of business on the
next succeeding interest payment date, (ii) to exchange any
Bearer Security (or portion thereof) for a Registered Security if
the Company shall determine that, as a result thereof, it may
incur adverse consequences under the Federal income tax laws and
regulations (including proposed regulations) of the United States
in effect or proposed at the time of such exchange, or (iii) in
the event of a redemption in part, (A) to register the transfer
of Registered Securities or to exchange any Bearer Securities for
Registered Securities during a period beginning at the opening of
business 15 days before any selection of Securities to be
redeemed and ending at the close of business on the day of the
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first publication of the relevant notice of redemption, or (B) to
register the transfer of or exchange any Registered Security so
selected for redemption in whole or in part, except portions not
being redeemed of Securities being redeemed in part, or (C) to
exchange any Bearer Security so selected for redemption except
that on the date fixed for redemption a Bearer Security may be
exchanged, on the terms and conditions set forth above, for a
Registered Security that is simultaneously surrendered, with
written instruction for payment on the date fixed for redemption,
unless the redemption date is between the close of business on
any Record Date and the close of business on the next succeeding
interest payment date, in which case such exchange may only be
made prior to the Record Date immediately preceding the
redemption date.
4. Global Security; Exchange.
(a) The Securities (other than the Restricted
Securities) shall initially be in the form of a temporary global
security (the "Global Security") in bearer form without interest
coupons in the aggregate principal amount of U.S. $185,800,000
(less the amount of any Restricted Securities simultaneously
issued) substantially in the form set forth in Exhibit B hereto.
The Global Security and the Restricted Securities shall be
authenticated by the Fiscal Agent upon the order of the Company
on the same conditions, in substantially the same manner and with
the same effect as the Definitive Securities. The Global
Security and the Restricted Securities will be issued upon
payment to the Company or its order in United States dollars in
same-day funds by check or wire transfer to a United States
dollar account designated by the Company at the office of The
First National Bank of Boston, Boston, Massachusetts, at 3:00
p.m., London time, on April 15, 1994, at such other time on the
same or such other date, not later than 5:00 p.m., London time,
on the fifth business day in London thereafter, as the Managers
and the Company may agree. Such payment will be made (1) upon
authorization from the Managers, which authorization will be
given if the conditions to the Managers' obligations set forth in
the Subscription Agreement are either satisfied or waived, (2)
against delivery of the amount, if any, of Restricted Securities,
as the Managers may request and as they shall direct, and (3)
against delivery of the Global Security for the balance of the
Securities to The Chase Manhattan Bank, N.A., London office, as
depositary (the "Common Depositary") for Morgan Guaranty Trust
Company of New York, Brussels office, as operator of the
Euroclear System (the "Euroclear Operator"), and Centrale de
Livraison de Valeurs Mobilieres S.A. ("CEDEL S.A."). The Global
Security shall be held on deposit with the Common Depositary for
the accounts of the Euroclear Operator and CEDEL S.A., for credit
to the Managers' respective Securities Clearance Accounts (or to
such other accounts as the Managers may have specified) with the
Euroclear Operator or CEDEL S.A. "Exchange Date" means the date
following the expiration of the 40-day period commencing on April
15, 1994.
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(b) Contemporaneously herewith, the Company shall
execute and deliver to the Fiscal Agent at its principal office
in New York Definitive Securities (which may be in typewritten
form) in respect of the Restricted Securities. Without
unnecessary delay but in any event not less than 15 days prior to
the Exchange Date, the Company will execute and deliver to the
Fiscal Agent at its principal office in London Definitive
Securities in the aggregate principal amount outstanding in the
Global Debenture. At such time, the Fiscal Agent shall deliver
to each holder of Restricted Securities printed Definitive
Securities in exchange for an equal aggregate principal amount of
non-printed Restricted Securities. On or after the Exchange
Date, the Global Security may be surrendered to the Fiscal Agent
to be exchanged, as a whole or in part, for Definitive Bearer
Securities without charge, and the Fiscal Agent shall
authenticate and deliver, in exchange for such Global Security or
the portions thereof to be exchanged, an equal aggregate
principal amount of Definitive Bearer Securities, but only upon
presentation to the Fiscal Agent at its office in London of a
certificate of the Euroclear Operator or CEDEL S.A. with respect
to the Global Security or portions thereof being exchanged,
substantially in the form of Exhibit C hereto, to the effect that
it has received a certificate or certificates in substantially
the form set forth in Exhibit D hereto dated no earlier than 15
days prior to the Exchange Date and signed by the persons
appearing in its records as the owners of the Global Security or
portions thereof being exchanged. Similarly, after the Exchange
Date, portions of the Global Security may be exchanged for an
equal aggregate principal amount of Definitive Registered
Securities upon presentation to the Fiscal Agent at its office in
London of a certificate substantially in the form of Exhibit E
hereto.
(c) Only Bearer Securities may be issued upon receipt
by the Euroclear Operator or CEDEL S.A. of a certificate or
certificates in the form of Exhibit D hereto. Bearer Securities
will be delivered only outside the United States, its territories
and possessions, and only upon receipt of such certificate or
certificates. Only Registered Securities may be issued upon
receipt by the Euroclear Operator or CEDEL S.A. of a certificate
or certificates in the form of Exhibit E hereto.
(d) The delivery to the Fiscal Agent by the Euroclear
Operator or CEDEL S.A. of any certificate referred to above may
be relied upon by the Company and the Fiscal Agent as conclusive
evidence that a corresponding certificate or certificates has or
have been delivered to the Euroclear Operator or CEDEL S.A.
pursuant to the terms of this Agreement.
(e) Upon any such exchange of a portion of the Global
Security for a Definitive Security or Securities, the Global
Security shall be endorsed by the Fiscal Agent to reflect the
reduction of its principal amount by an amount equal to the
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aggregate principal amount of such Definitive Security or
Securities. Until so exchanged in full, the Global Security
shall in all respects be entitled to the same benefits under this
Agreement as Definitive Securities authenticated and delivered
hereunder.
5. Payment.
(a) The Company will pay or cause to be paid to the
Paying Agent the amounts, at the times and for the purposes, set
forth herein and in the text of the Securities, and the Company
hereby authorizes and directs the Paying Agent to make payment of
the principal of, premium, if any, and interest on and Additional
Amounts (as defined in Section 2 of the Definitive Securities),
if any, on the Securities from such payments.
(b) At least 15 days prior to the date on which any
payment of Additional Amounts shall be required to be made
pursuant to Section 2 of the Definitive Securities, the Company
will furnish the Paying Agent, each other paying agency of the
Company and the Fiscal Agent with a certificate of one of its
duly authorized officers instructing the Paying Agent and each
other paying agency of the Company as to the amounts required (i)
to be deducted or withheld for or on account of any taxes
described in Section 2 of the Definitive Securities from a
payment to be made on that date and (ii) to be paid to each
holder of Securities or coupons as Additional Amounts pursuant to
that paragraph. If the foregoing amounts are not uniform for all
holders, then the Company's certificate shall specify by country
of residence or other factor the amounts required to be deducted
or withheld and to be paid as Additional Amounts for each holder
or class of holders of the Securities or coupons. In the absence
of its receipt of any such certificate from the Company, the
Paying Agent may make payment without deduction or withholding.
The Company hereby agrees to indemnify the Paying Agent, each
other paying agency of the Company and the Fiscal Agent for, and
to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence or bad faith on their
part, arising out of or in connection with actions taken or
omitted by any of them in reliance on any certificate furnished
pursuant to this Section.
(c) Interest on any Registered 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 April
1 or October 1 immediately preceding such interest payment date
(each a "Record Date") even if such Registered Security is
cancelled, upon redemption, conversion or otherwise, after such
Record Date. In case a Bearer Security is surrendered for
exchange for a Registered Security after the close of business on
any Record Date and before the opening of business on the next
succeeding interest payment date, the Fiscal Agent shall not be
required to perform such transfer or exchange of such Security.
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(d) Interest on any Registered Security that is
payable upon conversion in accordance with Section 7(a) hereof
shall be paid to the person in whose name that Security is
registered immediately prior to the conversion, provided that if
a Registered Security is converted after the close of business on
a Record Date and before the opening of business on the next
succeeding interest payment date, accrued interest shall be paid
on the next succeeding interest payment date to the person in
whose name that security is registered at the close of business
on that Record Date.
(e) Any interest on any Registered Security that is
payable, but is not punctually paid or duly provided for, on any
interest payment date 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 to the registered holder of such
Registered Security on a subsequent record date established by
the Company in any lawful manner if, after notice given by the
Company to the Fiscal Agent of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable
by the Fiscal Agent.
(f) Subject to the foregoing provisions of this
Section 5, each Security delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of any
other Security shall carry all the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
(g) In order to provide for the payment of the
principal of, premium, if any, and interest on the Securities as
the same shall become due and payable, the Company shall pay to
the Paying Agent at its office in London, in such coin or
currency of the United States of America as at the time of
payment is legal tender for the payment of public and private
debts therein, and in same day funds, the following amounts (and
the Company shall give notice to the Fiscal Agent at least one
full business day prior to the date payment is due to the Paying
Agent as to the means of such payment), to be held and applied by
the Paying Agent as hereinafter set forth:
(i) The Company shall pay to the Paying Agent
on the business day immediately prior to each interest
payment date an amount sufficient to pay the interest due on
(and Additional Amounts, if any, on) all the Securities
outstanding on such interest payment date, and the Paying
Agent shall apply the amounts so paid to it to the payment
of such interest (and Additional Amounts, if any) on such
interest payment date.
(ii) Upon presentment for conversion of any
Securities pursuant to Section 7(a) hereof (except as
described in the proviso to Section 5(d)), the Paying Agent
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shall immediately that day notify the Company of the amount
of any accrued interest due and owing thereon. Within four
business days of such notification the Company shall pay to
the Paying Agent an amount sufficient to pay the accrued
interest due on such Securities (and Additional Amounts, if
any, thereon), and the Paying Agent shall apply the amounts
so paid to it to the payment of such accrued interest (and
Additional Amounts, if any, thereon) in accordance with the
terms of the Securities.
(iii) If the Company shall elect, or shall be
required, to redeem all or any part of the Securities in
accordance with Section 6 hereof, the Company will pay to
the Paying Agent on the business day immediately prior to
the date fixed for redemption thereof an amount sufficient
(with any amount then held by the Paying Agent and available
for the purpose) to pay the redemption price of the
Securities called for redemption or entitled to be redeemed,
together with accrued interest thereon (and Additional
Amounts, if any, thereon) to the date fixed for redemption
and not paid pursuant to clause (g)(i) of this Section 5,
and the Paying Agent shall apply such amount to the payment
of the redemption price and accrued interest (and Additional
Amounts, if any) in accordance with the terms of the
Securities.
(iv) On the business day immediately prior to
the maturity date of the Securities, the Company shall pay
to the Paying Agent an amount which, together with any
amounts then held by the Paying Agent, and available for
payment thereof, shall be equal to the entire amount of
principal and interest (and Additional Amounts, if any) to
be due on such maturity date on all the Securities then
outstanding, and the Paying Agent shall apply such amount to
the payment of the principal of and interest on (and
Additional Amounts, if any, on) the Securities in accordance
with the terms of the Securities.
6. Redemption.
(a) If, under the circumstances described in Section 3
of the Definitive Securities, the Company shall elect to redeem
the outstanding Securities, the following provisions shall be
applicable:
(i) The Company shall, at least 35 days in the
case of a redemption in whole or 75 days in the case of a
redemption in part (or such shorter period as shall be
reasonably acceptable to the Fiscal Agent) before the date
designated for such redemption, give notice to the Agents of
its election to redeem the Securities on the redemption date
specified in such notice and state in such notice that the
conditions precedent to such redemption have occurred and
describe them, and in case of redemptions pursuant to
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Section 3(b) of the Definitive Securities shall provide to
the Fiscal Agent an opinion of counsel (who can be an
employee of the Company) satisfactory to the Fiscal Agent
stating that the legal conditions precedent to the right of
the Company to effect such redemption have occurred, and
shall request the Fiscal Agent to arrange for publication
and mailing of the notice specified in clause (a)(ii) below.
(ii) In case the Company shall give notice to
the Agents of its election to redeem the Securities, the
Fiscal Agent shall cause to be published on behalf of the
Company a notice of redemption in accordance with the
provisions of Section 3 of the Definitive Securities and
shall mail by first-class mail a copy of notice to each
holder of a Registered Security at the address of such
holder as it shall appear in the Security Register. The
Fiscal Agent shall send a copy of such notice of redemption
to the Company, the Paying Agent (if different from the
Fiscal Agent) and each other paying agency of the Company.
(iii) Such notice shall be published on behalf
and at the expense of the Company in an Authorized Newspaper
(as defined in Section 19 hereof) in New York City, London
and, so long as the Securities are listed on the Luxembourg
Stock Exchange, in Luxembourg, as set forth in Section 19 of
this Agreement and Section 3 of the Definitive Securities.
In the case of a redemption in whole, notice will be given
once not more than 60 nor less than 30 days prior to the
date fixed for redemption. In the case of a partial
redemption, notice will be given twice, the first such
notice to be given not more than 75 nor less than 60 days
prior to the date fixed for redemption and the second such
notice to be given not more than 60 and not less than 30
days prior to the date fixed for redemption.
(b) Under the circumstances described in Section 3(d)
of the Definitive Securities concerning the redemption of
outstanding Securities at the option of the holders thereof, the
following provisions shall be applicable:
(i) The Company shall give notice to the Agents
of the occurrence of a Redemption Event immediately upon the
occurrence of such Redemption Event. Such notice shall
state:
(A) The nature of the Redemption Event;
(B) The Holder Redemption Date (as that term
is defined in Section 3(d) of the
Definitive Securities) in respect of
such Redemption Event; and
(C) The redemption price as set forth in
Section 3(d) of the Definitive
Securities.
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(ii) The Fiscal Agent shall cause to be
published on behalf of the Company a notice of entitlement
to redeem in accordance with the provisions of Section 3 of
the Definitive Securities and shall mail by first-class mail
a copy of such notice to each holder of a Registered
Security at the address of such holder as it shall appear in
the Security Register. The Fiscal Agent shall send a copy
of such notice of entitlement to redeem to the Company, the
Paying Agent (if different from the Fiscal Agent) and each
other paying agency of the Company.
(iii) Such notice shall be published on behalf
and at the expense of the Company in an Authorized Newspaper
(as defined in Section 19 hereof) in New York City, London
and so long as the Securities are listed on the Luxembourg
Stock Exchange, in Luxembourg, as set forth in Section 19 of
this Agreement and Section 3 of the Definitive Securities.
Notice shall be given not later than 10 days after the later
of the Exchange Date or the date of the occurrence of the
Redemption Event.
(iv) Upon the deposit of any of the Definitive
Securities with the agency designated by the Company as the
place for payment of the Definitive Securities together with
a duly signed and completed redemption notice, all in
accordance with the provisions of Section 3 of the
Definitive Securities, the holder of such Definitive
Security shall be entitled to receive a non-transferable
receipt evidencing such deposit.
(v) The Fiscal Agent shall notify the Company
on each of the five business days prior to the Holder
Redemption Date for Securities to be redeemed under this
Section 6(b) of the amount required to redeem such
Securities.
(c) Under the circumstances described in Section 3(e)
of the Definitive Securities concerning the redemption of
outstanding Securities at the option of the holders thereof upon
a Change in Control of the Company that is not approved by a
majority of the Continuing Directors prior to the expiration of
the Approval Period (all as defined and set forth in Section 3(e)
of the Definitive Securities), the following provisions shall be
applicable:
(i) The Company shall give notice to the Fiscal
Agent of the occurrence of a Change in Control immediately
upon the expiration of the Approval Period if such Change in
Control has not been approved by a majority of the
Continuing Directors prior to the expiration of the Approval
Period. Such notice shall state:
(A) The nature of the Change in Control;
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(B) The Repurchase Date (as that term is
defined in Section 3(e) of the
Definitive Securities) in respect of
such Change in Control; and
(C) The redemption price as set forth in
Section 3(e) of the Definitive
Securities.
(ii) The Fiscal Agent shall cause to be
published on behalf of the Company a notice of entitlement
to redeem in accordance with the provisions of Section 3 of
the Definitive Securities and shall mail by first-class mail
a copy of such notice to each holder of a Registered
Security at the address of such holder as it shall appear in
the Security Register. The Fiscal Agent shall send a copy
of such notice of entitlement to redeem to the Company, the
Paying Agent (if different from the Fiscal Agent) and each
other paying agency of the Company.
(iii) Such notice shall be published on behalf
and at the expense of the Company in an Authorized Newspaper
(as defined in Section 19 hereof) in New York City, London
and so long as the Securities are listed on the Luxembourg
Stock Exchange, in Luxembourg, as set forth in Section 19 of
this Agreement and Section 3 of the Definitive Securities.
Such notice shall be given not later than 10 days after the
later of the Exchange Date or the date of the expiration of
the Approval Period.
(iv) Upon the deposit of any of the Definitive
Securities with the agency designated by the Company as the
place for payment of the Definitive Securities together with
a duly signed and completed redemption notice, all in
accordance with the provisions of Section 3 of the
Definitive Securities, the holder of such Definitive
Security shall be entitled to receive a non-transferable
receipt evidencing such deposit.
(v) The Fiscal Agent shall notify the Company
on the second business day prior to the Repurchase Date for
Securities to be redeemed under this Section 6(c) of the
amount required to redeem such Securities.
7. Conversion of Securities.
(a) Subject to and upon compliance with the provisions
of this Section 7, at the option of the holder thereof, any
Definitive Security or, in the case of any Registered
Security or Bearer Security of a denomination other than $1,000,
any portion of the principal amount thereof which is $1,000 or an
integral multiple of $1,000, may be converted on or after the
date which is the latest of June 30, 1994, the Exchange Date or
the date of the effectiveness of the Registration Statement
relating to the Common Stock issuable upon conversion of the
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Securities (the "Registration Date") and prior to redemption or
maturity, at the principal amount thereof, or of such portion
thereof, into fully paid and nonassessable shares of Common Stock
of the Company (the "Common Stock") as set forth in the
Definitive Securities. The right to convert Securities called
for redemption will terminate at the close of business on the
fifteenth day next preceding the date fixed for redemption (or if
such date is not a business day, on the next succeeding business
day) and will be lost if not exercised prior to that time. The
price at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Price") shall be
initially $47.25 per share of Common Stock. The Conversion Price
shall be adjusted in certain instances as provided in paragraphs
(c)(i), (ii), (iii), (iv), (vi) and (vii) of Section 4 of the
Definitive Securities.
(b) In order to exercise the conversion privilege, the
holder of any Security to be converted shall surrender such
Security, together with all unmatured coupons, if any, and
any matured coupons in default appertaining thereto, if any, at
the office of the Conversion Agent or any office or agency of the
Company maintained for that purpose pursuant to Section 12(f),
accompanied by written notice, in substantially the form set
forth in the Definitive Security, to the Company, at such office
or agency that the holder elects to convert such Security or, if
less than the entire principal amount of a Registered Security or
Bearer Security of a denomination other than $1,000 is to be
converted, the portion thereof to be converted. Upon presentment
for conversion of any Securities pursuant to this Section, the
Conversion Agent shall immediately that day notify the Company of
such presentment. No payment or adjustment shall be made upon
any conversion on account of any dividends on the Common Stock
issued upon conversion. Accrued interest from the immediately
preceding interest payment date until the conversion date (and
Additional Amounts, if any, thereon) will be paid to the holder,
through the Paying Agent, in the same manner as payments of
interest, within five business days (as defined in the
Securities) after the conversion date, provided that if a
Registered Security is converted after the close of business on a
Record Date and before the opening of business on the next
succeeding interest payment date, accrued interest shall be paid
on the next succeeding interest payment date to the person in
whose name that security is registered at the close of business
on that Record Date.
(c) Securities shall be deemed to have been converted
immediately prior to the close of business on the day of
surrender of such Securities for conversion in accordance with
the foregoing provisions, and at such time the rights of the
holders of such Securities as holders shall cease, and the person
or persons entitled to receive the Common Stock issuable upon
conversion [and as to which the Company has not elected to pay
cash] shall be treated for all purposes as the record holder or
holders of such Common Stock at such time. As promptly as
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practicable on or after the conversion date, the Company shall
cause to be issued or delivered at such office or agency a
certificate or certificates for the number of full shares of
Common Stock issuable or deliverable upon conversion and as to
which the Company has not elected to pay cash, together with
payment, in lieu of any fraction of a share, as provided below.
The Paying Agent shall, within five business days after the
conversion date, make a payment for the accrued interest thereon
(and Additional Amounts, if any, thereon), except as otherwise
provided in the proviso to the last sentence of Section 7(b).
(d) In the case of any Registered Security or Bearer
Security of a denomination other than $1,000 is converted in part
only, upon such conversion the Company shall execute and the
Fiscal Agent shall authenticate and deliver to the holder
thereof, at the expense of the Company, a new Security or
Securities of any authorized kind or denomination as requested by
such holder, in aggregate principal amount equal to the
unconverted portion of the principal amount of such Security.
(e) No fractional shares of Common Stock shall be
issued or delivered upon conversion of Securities. If more than
one Security shall be surrendered for conversion at one time by
the same holder, the number of full shares which shall be
issuable or deliverable upon conversion thereof shall be computed
on the basis of the aggregate principal amount of the Securities
(or, in the case of Registered Securities or Bearer Securities of
a denomination other than $1,000, specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock
which would otherwise be issuable or deliverable upon conversion
of any Security or Securities (or, in the case of Registered
Securities or Bearer Securities of a denomination other than
$1,000, specified portions thereof), the Company shall pay a
cash adjustment in respect of such fraction in an amount equal to
the same fraction of the Closing Price per share (as defined in
the Definitive Securities) of Common Stock at the close of
business on the day preceding the day of conversion.
(f) Whenever the Conversion Price is adjusted as
provided in the Definitive Securities:
(i) the Company shall compute the adjusted
Conversion Price in accordance with the terms of the
Definitive Securities and shall prepare a certificate signed
by the President, any Vice President or the Treasurer of the
Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be
filed with the Conversion Agent and at each office or agency
maintained for the purpose of conversion of Securities
pursuant to Section 12(f); and
(ii) a notice stating that the Conversion Price
has been adjusted and setting forth the adjusted Conversion
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Price shall forthwith be required, and, as soon as
practicable after it is required, the Company shall promptly
cause a notice setting forth the adjusted Conversion Price
to be given to the holders of the Securities as provided in
Section 19.
(g) In case:
(i) the Company shall declare a dividend (or
any other distribution) on its Common Stock payable
otherwise than in cash out of its retained earnings
(excluding dividends payable in stock for which adjustment
is made pursuant to the terms of the Definitive Securities);
or
(ii) the Company shall authorize the granting
to the holders of its Common Stock of rights or warrants to
subscribe for or purchase any shares of capital stock of any
class or of any other rights; or
(iii) of any reclassification of the Common
Stock of the Company (other than a subdivision or
combination of its outstanding shares of Common Stock), or
of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the
Company is required, or of the sale or transfer of all or
substantially all of the assets of the Company; or
(iv) of the involuntary dissolution,
liquidation or winding up of the Company; or
(v) the Company proposes to take any other
action which would require an adjustment of the Conversion
Price pursuant to the Definitive Securities;
then the Company shall cause to be filed with the Conversion
Agent and at each office or agency maintained for the purpose of
conversion of Securities a notice setting forth the adjusted
Conversion Price and shall cause notice to be given as provided
in Section 19 except that notice need be given once at least 20
days (or 10 days in any case specified in clause (i) or (ii)
above) prior to the applicable record date hereinafter specified,
stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, rights or warrants or, if
a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend,
distribution, rights or warrants is to be determined, or (y) the
date on which a reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for the securities, cash or other
property deliverable upon such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up.
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The failure to give notice required by this Section or any defect
therein shall not affect the legality or validity of any
dividend, distribution, rights, warrants, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation
or winding up, or the vote on any such action.
(g) The Company shall, from and after the date on
which the Securities are convertible into Common Stock, have
reserved and available, free from preemptive rights, out of
its authorized but unissued Common Stock, for the purpose of
effecting the conversion of Securities, the full number of shares
of Common Stock then issuable upon the conversion of
all Securities.
(h) The Company shall in good faith use its best
efforts (i) to cause all registrations with, and to obtain any
approvals by, any governmental authority under any Federal or
state law of the United States that may be required before the
shares of Common Stock may be lawfully issued or transferred and
(ii) to list the shares of Common Stock required to be issued or
delivered upon conversion of Securities prior to such issue or
delivery on each national securities exchange on which the
outstanding Common Stock is listed at the time of such delivery.
(i) The Company covenants that all shares of Common
Stock which may be issued or delivered upon conversion of
Securities will upon issue be fully paid and nonassessable and,
except as provided in Section 13, the Company will pay all stamp,
excise or similar taxes or duties, liens and charges with respect
to the issue thereof.
(j) All converted Securities shall be held by the
Company, and may, at any time, be delivered to the Fiscal Agent
for cancellation, which shall hold or dispose of the same.
Converted Securities shall not be transferred. The Company will
promptly give, or cause to be given, written notice to the Fiscal
Agent of the serial numbers of all Securities which have been
converted.
(k) In case of any consolidation with, or merger of
the Company into, any other corporation, or in case of any merger
of another corporation into the Company (other than a merger
which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of
the Company), or in case of any sale or transfer of all or
substantially all of the assets of the Company, the corporation
formed by such consolidation or resulting from such merger or
which acquires such assets, as the case may be, shall execute and
deliver to the Fiscal Agent an amendment to the Fiscal Agency
Agreement providing that the holder of each Definitive Security
shall have the right during the period such Security shall be
convertible as specified in the Definitive Securities to convert
such Security only into the kind and amount of securities, cash
and other property receivable upon such consolidation, merger,
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sale or transfer by a holder of the number of shares of Common
Stock of the Company into which such Security might have been
converted immediately prior to such consolidation, merger, sale
or transfer assuming, if such consolidation, merger, sale or
transfer is prior to the period such Security shall be
convertible, that the Securities were convertible at such time at
the initial Conversion Price as adjusted pursuant to the terms of
the Definitive Securities. Such amendment shall provide for
adjustments which, for events subsequent to the effective date of
such amendment, shall be as nearly equivalent as may be
practicable to the adjustments provided for in the Definitive
Securities. The above provisions of this Section shall similarly
apply to successive consolidations, mergers, sales or transfers.
(l) Subject to Section 11(j), neither the Fiscal Agent
nor the Conversion Agent or agency appointed by the Company shall
at any time be under any duty or responsibility to any holder of
Securities to determine whether any facts exist which may require
any adjustment of the Conversion Price, or with respect to the
nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in the Definitive
Securities provided to be employed, in making the same. Neither
the Fiscal Agent nor the Conversion Agent or agency appointed by
the Company shall be accountable with respect to the validity or
value (or the kind or amount) of any shares of Common Stock or of
any securities or property which may at any time be issued or
delivered upon the conversion of any Security; and neither the
Fiscal Agent nor the Conversion Agent or agency appointed by the
Company makes any representation with respect thereto. Neither
the Fiscal Agent nor the Conversion Agent or agency appointed by
the Company shall be responsible for any failure of the Company
to issue, transfer or deliver any shares of Common Stock or stock
certificates or other securities or property or to make any cash
payment upon the delivery of any Security for the purpose of
conversion or to comply with any of the covenants contained in
this Section 7.
(m) Any Common Stock issued upon conversion of a
Security ("Restricted Common Stock") at any time prior to the
date which is three years after the Closing Date when a
registration statement in respect of such Common Stock is not
effective under the Securities Act shall be subject to the
restrictions on transfer set forth in paragraph 3(a) hereof to
the same extent as the Securities which were so converted. All
shares of Restricted Common Stock shall bear the legend and
transfer requirements set forth on the form of Registered
Security set forth as Exhibit A hereto.
8. Surrendered Securities.
All Securities, together with any coupons appertaining
thereto, surrendered for payment, redemption, retirement,
transfer or exchange and all coupons paid through the application
of interest installments shall be delivered to the Fiscal Agent.
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In any such case the Fiscal Agent shall cancel all Securities and
coupons not previously cancelled and destroy all such Securities
and coupons so delivered and shall furnish to the Company a
certificate with respect to such destruction. Such certificate
shall state, in the case of destruction of the Global Security,
that all certificates of the Euroclear Operator or CEDEL S.A. as
to beneficial ownership required by Section 4 hereof have been
duly presented by the Euroclear Operator or CEDEL S.A.
9. Mutilated, Destroyed, Stolen or Lost Securities.
The Fiscal Agent is hereby authorized, in accordance
with the provisions of the Securities and this Section, from time
to time to authenticate and deliver Securities in exchange for or
in lieu of Securities that become mutilated, destroyed, stolen or
lost, upon receipt of indemnity and such other documents or proof
as may be required in form and substance satisfactory to the
Fiscal Agent and the Company. Every Security authenticated and
delivered in exchange for or in lieu of any such Security shall
be considered an obligation of the Company and shall carry all
the rights to interest accrued and unpaid and to accrue which
were carried by such Security, and notwithstanding anything to
the contrary herein contained, any new Bearer Security shall have
attached thereto such coupons that neither gain nor loss in
interest shall result from such exchange or substitution.
10. Signatures.
Securities shall be executed on behalf of the Company
by its President, its Secretary, any Vice President or its
Treasurer, any of whose signatures may be manual or in facsimile,
and any coupons appertaining thereto shall be executed on behalf
of the Company by the facsimile signature of its President, its
Secretary, any Vice President or its Treasurer. Any signature in
facsimile may be imprinted or otherwise reproduced on the
Securities. The Company may adopt and use the signature or
facsimile signature of any person who shall be a President,
Secretary, Vice President or Treasurer at the time of the
execution of the Securities, notwithstanding the fact that at the
time the Securities shall be authenticated and delivered, or
disposed of, such person shall have ceased to have held such
office by virtue of which such person so executed such security.
11. Agreements Concerning Agents.
Each of the Agents accepts its obligations herein and
in the Securities, upon the terms and conditions hereof and
thereof, including the following, to all of which the Company
agrees and to all of which the rights hereunder of the holders
from time to time of the Securities and coupons shall be subject:
(a) Each of the Agents shall be entitled to reasonable
compensation for all services rendered by such Agent, as
separately agreed by the Company and the Agent, and the Company
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agrees promptly to pay such compensation and to reimburse each of
the Agents for the reasonable out-of-pocket expenses (including,
but not limited to, counsel fees) incurred by such Agent in
connection with the services rendered by it hereunder. The
Company also agrees to indemnify each of the Agents and each
other paying agency and conversion agency of the Company for, and
to hold it harmless against, any loss, liability or expense
(including the costs and expenses of defending against any claim
of liability) incurred without negligence or bad faith on the
part of such Agent or other paying agency and conversion agency,
arising out of or in connection with its acting as an Agent or
other paying agency and conversion agency of the Company
hereunder. The obligation of the Company under this clause (a)
shall survive payment of the Securities or the resignation or
removal of any Agent or paying agency and conversion agency.
(b) In acting under this Agreement and in connection
with the Securities, each of the Agents and each other paying
agency and conversion agency of the Company is acting solely as
agent of the Company, and does not assume any obligation, or
relationship of agency or trust, for or with any of the owners or
holders of the Securities or coupons, except that all funds held
by the Paying Agent or any other paying agency of the Company for
payment of principal of, premium, if any, or interest on (or
Additional Amounts, if any, on) the Securities shall be held in
trust but need not be segregated from other funds except as
required by law and as set forth herein and in the Securities,
and shall be applied as set forth herein and in the Securities;
provided, however, that monies paid by the Company to the Paying
Agent or any other paying agency of the Company for the payment
of principal of or interest on (or Additional Amounts, if any,
on) Securities remaining unclaimed at the end of two years after
such principal or interest (or Additional Amounts, if any) shall
have become due and payable shall be repaid to the Company as
provided and in the manner set forth in the Securities, whereupon
the aforesaid trust shall terminate and all liability of the
Paying Agent or such other paying agency of the Company with
respect thereto shall cease.
(c) Each of the Agents and each other paying agency
and conversion agency of the Company may consult with one or more
counsel satisfactory to it (including counsel to the Company),
and the written opinion of such counsel shall be full and
complete authorization and protection in respect of any action
taken, omitted or suffered by it hereunder in good faith and in
accordance with the opinion of such counsel.
(d) Each of the Agents and each other paying agency
and conversion agency of the Company shall be protected and shall
incur no liability for or in respect of any action taken, omitted
or suffered by it in reliance upon any Security, coupon, notice,
direction, consent, certificate, affidavit, statement or other
paper or document believed in good faith by such Agent or such
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other paying agency and conversion agency of the Company to be
genuine and to have been signed by the proper parties.
(e) Each of the Agents and each other paying agency
and conversion agency of the Company, its officers, directors and
employees may become the owner of, or acquire any interest in,
any Securities or coupons, with the same rights that it or they
would have if it were not an Agent or such other paying agency of
the Company hereunder, and may engage or be interested in any
financial or other transaction with the Company and its
affiliates and may act on, or as depositary, trustee or agent
for, any committee or body of holders of Securities or other
obligations of the Company, as freely as if it were not an Agent
or a paying agency or conversion agency of the Company hereunder.
(f) Neither the Paying Agent nor any other paying
agency of the Company shall be under any liability for interest
on any monies at any time received by it pursuant to any of the
provisions of this Agreement or of the Securities.
(g) The recitals contained herein and in the
Securities (except in the Fiscal Agent's certificates of
authentication), shall be taken as the statements of the Company
and the Agents assume no responsibility for the correctness of
the same. None of the Agents makes any representation as to the
validity or sufficiency of this Agreement or the Securities or
coupons, except for such Agent's due authorization to execute
this Agreement. Neither the Agents nor any other paying agency
of the Company shall be accountable for the use or application by
the Company of the proceeds of any Securities authenticated and
delivered by the Fiscal Agent in conformity with the provisions
of this Agreement.
(h) The Agents and each other paying agency and
conversion agency of the Company shall be obligated to perform
such duties and only such duties as are herein and in the
Securities specifically set forth and no implied duties or
obligations shall be read into this Agreement or the Securities
against the Agents or any other paying agency of the Company.
The Agents shall not be under any obligation to take any action
hereunder which may tend to involve them in any expense or
liability, the payment of which within a reasonable time is not,
in their reasonable opinion, assured to them.
(i) Unless herein or in the Securities otherwise
specifically provided, any order, certificate, notice, request,
direction, or other communication, from the Company made by or
given by the Company under any provision of this Agreement shall
be sufficient if signed by the President, the Secretary, any Vice
President or the Treasurer of the Company.
(j) Anything in this Agreement to the contrary
notwithstanding, none of the Agents shall incur any liability
hereunder, except as a result of negligence or bad faith
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attributable to it or its officers or employees, and shall incur
no liability for the negligence or bad faith of its
agents appointed by it with due care; provided that the Agent
shall notify the Company of the appointment of any such agents.
12. Offices, Resignation, Successors, Etc. of Agents;
Paying, Conversion and Transfer Agencies.
(a) The Company agrees that, until none of the
Securities and coupons is outstanding or until monies for the
payment of all principal of, premium, if any, and interest on
(and Additional Amounts payable pursuant to Section 2 of the
Definitive Securities, if any, on) all outstanding Securities
shall have been made available at the office of the Paying Agent
and shall have been returned to the Company as provided in the
Securities, there shall at all times be a Fiscal Agent in the
Borough of Manhattan, New York City, which shall be a bank or
trust company organized and doing business under the laws of the
United States of America or of any State of the United States of
America, in good standing and authorized under such laws to
exercise corporate trust powers, a Paying Agent, a Conversion
Agent and a Transfer Agent having offices in a city in Western
Europe and in New York City, which shall be a bank or trust
company organized, in good standing and doing business under the
laws of the United States of America or of any State of the
United States of America, and a paying agency, a conversion
agency and a transfer agency in at least one city in Western
Europe, which shall be Luxembourg so long as the Securities are
listed on the Luxembourg Stock Exchange.
(b) Each of the Agents may at any time resign as such
Agent by giving written notice to the Company of such intention
on its part, specifying the date in which its desired resignation
shall become effective; provided, however, that such date shall
never be less than ninety days after receipt of such notice by
the Company unless the Company agrees to accept less notice.
Each of the Agents hereunder may be removed at any time by the
filing with it of any instrument in writing signed on behalf of
the Company and specifying such removal and the date when it is
intended to become effective. Such resignation or removal shall
take effect upon the date of the appointment by the Company, as
hereinafter provided, of a successor Fiscal Agent, Conversion
Agent or Paying Agent, as the case may be, and the acceptance of
such appointment by such successor Agent. Upon its resignation
or removal, each of the Agents shall be entitled to the payment
by the Company of its compensation for the services rendered
hereunder and to the reimbursement of all reasonable
out-of-pocket expenses incurred in connection with the services
rendered hereunder by such Agent and shall promptly notify the
Company of such action.
(c) In case at any time any of the Agents shall
resign, or shall be removed, or shall be incapable of acting, or
shall file a voluntary petition as a debtor under Chapter 7 or 11
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of Title 11 of the United States Code or have an order for relief
entered against it as a debtor under Chapter 7 or 11 of Title 11
of the United States Code or make an assignment for the benefit
of its creditors or consent to the appointment of a receiver of
all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or
if an order of any court shall be entered approving any petition
filed by or against the Fiscal Agent under any legislation
similar to the provisions of Title 11 of the United States Code
or against any of the Agents under the provisions of any
legislation similar to the provisions of Title 11 of the United
States Code, or if a receiver of it or of all or any substantial
part of its property shall be appointed, or if any public officer
shall take charge or control of it or of its property or affairs,
for the purpose of rehabilitation, conservation or liquidation, a
successor Agent, qualified as aforesaid, shall be appointed by
the Company by an instrument in writing. Upon the appointment as
aforesaid of a successor Agent and acceptance by it of such
appointment, the Agent so superseded shall cease to be such Agent
hereunder. If no successor Agent shall have been so appointed by
the Company and shall have accepted appointment as hereinafter
provided, any holder of a Security, on behalf of itself and all
others similarly situated, or any Agent may petition any court of
competent jurisdiction for the appointment of a successor Agent
and shall promptly notify the Company of such action.
(d) Any successor Fiscal Agent, Conversion Agent,
Transfer Agent or Paying Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon
such successor Agent, without any further act, deed or
conveyance, shall become vested with all the authority, rights,
powers, trusts, immunities, duties and obligations of such
predecessor with like effect as if originally named as such Agent
hereunder, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Agent shall be
entitled to receive, all monies, securities or other property on
deposit with or held by such predecessor, as such Agent
hereunder.
(e) Any corporation or bank into which any of the
Agents hereunder may be merged or converted, or any corporation
or bank with which such Agent may be consolidated, or any
corporation or bank resulting from any merger, conversion or
consolidation to which such Agent shall be a party, or any
corporation or bank to which such Agent shall sell or otherwise
transfer all or substantially all the assets and business of such
Agent, or any corporation to which the Fiscal Agent shall sell or
otherwise transfer all or substantially all of its corporate
trust business, provided that it shall be qualified as aforesaid,
shall be the successor to such Agent under this Agreement without
the execution or filing of any document or any further act on the
part of any of the parties hereto.
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(f) So long as there shall be a Fiscal Agent and
Paying Agent hereunder, the Company shall maintain agencies (i)
where Registered Securities (but not Bearer Securities or
coupons) may be presented for surrender for payment (and for the
payment of Additional Amounts on the Registered Securities, if
any) and where Securities may be surrendered for conversion in
the Borough of Manhattan, New York City, and (ii) where Bearer
Securities and coupons may be surrendered for payment (and for
the payment of Additional Amounts (pursuant to Section 2 of the
Definitive Securities) on Bearer Securities, if any) and where
Bearer Securities may be surrendered for conversion in at least
one city in Western Europe, which shall be Luxembourg so long as
the Securities are listed on the Luxembourg Stock Exchange. The
Company now intends to maintain additional agencies (subject to
applicable laws and regulations) where Bearer Securities and
coupons may be surrendered for payment (and for the payment of
Additional Amounts (pursuant to Section 2 of the Definitive
Securities) on Bearer Securities, if any), where Registered
Securities may be surrendered for payment and where Securities
may be surrendered for conversion in London, England and
Luxembourg, and during such period to keep the Agents advised of
the names and locations of such agencies. Unless the Company
shall otherwise notify each of the Agents in writing, the sole
such paying agencies and conversion agencies shall be the
agencies specified in the Securities. The Company authorizes the
Paying Agent to pay to or to the order of the aforesaid agencies,
upon demand by such agencies, funds for the payment of the
principal of, premium, if any, and interest on (and Additional
Amounts pursuant to Section 2 of the Definitive Securities, if
any, on) the Securities. Except as otherwise arranged by the
Company, the Fiscal Agent shall arrange for the payment of the
compensation of such paying agencies for their services as such,
and the Company shall pay to the Fiscal Agent from time to time
sufficient funds to make such payments.
(g) So long as there shall be a Fiscal Agent, Paying
Agent and Conversion Agent hereunder, the Company shall maintain
a Security Registrar and additional transfer agencies (the
"Transfer Agents") (i) where Registered Securities may be
surrendered for exchange for Registered Securities in New York
City and (ii) in at least one city in Western Europe, which shall
be Luxembourg so long as the Securities are listed on the
Luxembourg Stock Exchange, where Bearer Securities may be
delivered in exchange for Bearer Securities or for Registered
Securities. Consistent with applicable laws and regulations,
including the provisions of the federal income tax laws of the
United States, such agencies may be the same agencies as or
different agencies from those maintained by the Company pursuant
to Section 12(f).
The Company hereby appoints Banque Internationale a
Luxembourg, 2 Boulevard Royal, L-2953 LuxembourgVille,
Luxembourg, as Transfer Agent for such exchanges. The transfer,
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exchange and registration of transfer or exchange of Registered
Securities shall be made by the Fiscal Agent in New York City.
13. Taxes.
The Company will pay all stamp taxes and other similar
duties, if any, that may be imposed by the United States of
America or the United Kingdom, or any state or political
subdivision thereof or taxing authority therein, with respect to
the execution or delivery of this Agreement, or the issuance of
the Global Security, or the exchange from time to time of the
Global Security for Definitive Securities, or with respect to the
issue or delivery of shares of Common Stock on conversion of
Securities; provided, however, that the Company shall not be
required to pay any tax or duty which may be payable in respect
of any transfer involved in the issue or delivery of shares of
Common Stock in a name other than that of the holder of the
Security or Securities to be converted, and no such issue or
delivery shall be made unless and until the person requesting
such issue has paid to the Company the amount of any such tax or
duty or has established to the satisfaction of the Company that
such tax or duty has been paid; and further provided, that the
Company shall not be required to pay any tax or duty that may be
payable in respect of any accrued interest paid in connection
with the conversion of the securities.
14. Meetings and Votes of Holders.
(a) A meeting of holders of Securities may be called
at any time and from time to time pursuant to this Section for
any of the following purposes: (i) to give any notice to the
Company or to the Fiscal Agent, or to give any directions to the
Fiscal Agent, or to consent to the waiving of any default
hereunder or under the Definitive Securities and its
consequences, or to take any other action authorized to be taken
by holders of Securities pursuant to Section 9 of the Definitive
Securities; or (ii) to take any other action authorized to be
taken by or on behalf of the holders of any specified aggregate
principal amount of the Securities under any other provision of
this Agreement, the Definitive Securities or under applicable
law.
(b) Meetings of holders of Securities may be held at
such place or places in New York City or London as the Fiscal
Agent or, in case of its failure to act, the Company or the
holders calling the meeting shall from time to time determine.
(c) The Fiscal Agent may at any time call a meeting of
holders of Securities to be held at such time and at such place
in any of the locations designated in Section 14(b) hereof as the
Fiscal Agent shall determine. Notice of every meeting of holders
shall be made as specified in Section 19 hereof, except that such
notice shall set forth the time and the place of such meeting, in
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<PAGE>
general terms the action proposed to be taken at such meeting and
a general description of regulations applicable to such meeting
and shall be published at least three times in the publications
specified in such Section 19, the first publication to be not
less than 21 nor more than 180 days prior to the date fixed for
the meeting.
(d) In case at any time the Company or the holders of
at least 25% in aggregate principal amount of the Securities
shall have requested the Fiscal Agent to call a meeting of the
holders, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Fiscal
Agent shall not have given the first notice of such meeting
within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided
herein, then the Company or the holders of Securities in the
amount above specified may determine the time and the place in
either of the locations designated in Section 14(b) hereof for
such meeting and may call such meeting to take any action
authorized in Section 14(a) hereof by giving notice thereof as
provided in Section 14(c) hereof.
(e) To be entitled to vote at any meeting of holders
of Securities, a person shall be (i) a holder of one or more
Securities, or (ii) a person appointed by an instrument in
writing as proxy for a holder or holders of Securities by such
holder or holders, which proxy need not be a holder of
Securities. The only persons who shall be entitled to be present
or to speak at any meeting of holders shall be the persons
entitled to vote at such meeting and their counsel and any
representatives of the Fiscal Agent and its counsel and any
representatives of the Company and its counsel.
(f) The persons entitled to vote a majority in
principal amount of the outstanding Securities shall constitute a
quorum for the transaction of all business specified in
Section 14(a) hereof. No business shall be transacted in the
absence of a quorum unless a quorum is represented when the
meeting is called to order. In the absence of a quorum within 30
minutes of the time appointed for any such meeting, the meeting
shall, if convened at the request of the holders of Securities
(as provided in Section 14(d) hereof), be dissolved. In any
other case the meeting shall be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such adjourned meeting. Notice of
the reconvening of any adjourned meeting shall be given as
provided in Section 14(c) hereof except that such notice need be
published only once but must be given not less than five days
prior to the date on which the meeting is scheduled to be
reconvened. Subject to the foregoing, at the reconvening of any
meeting adjourned for a lack of a quorum the persons entitled to
vote 25% in principal amount of the Securities shall constitute a
quorum for the taking of any action set forth in the notice of
the original meeting. Notice of the reconvening of an adjourned
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<PAGE>
meeting shall state expressly the percentage of the aggregate
principal amount of the Securities that shall constitute a
quorum. At a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid, any resolution and all
matters (except as limited by Section 9 of the Definitive
Securities) shall be effectively passed and decided if passed or
decided by the persons entitled to vote a majority in principal
amount of the Securities represented and voting at such meeting,
provided that such amount shall be not less than 25% in principal
amount of the Securities outstanding. Any holder of a Security
who has executed an instrument in writing appointing a person as
his proxy shall be deemed to be present for the purposes of
determining a quorum and be deemed to have voted; provided,
however, that such holder shall be considered as present or
voting only with respect to the matters covered by such
instrument in writing. Any resolution passed or decision taken
at any meeting of the holders of Securities duly held in
accordance with this Section 14 shall be binding on all the
holders of Securities whether or not present or represented at
the meeting.
(g) Notwithstanding any other provision of this
Agreement, the Fiscal Agent may make such reasonable regulations
as it may deem advisable for any meeting of holders of Securities
in regard to proof of the holding of Securities and of the
appointment of proxies and in regard to the appointment and
duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Bearer
Securities shall be proved by the production of the Bearer
Securities or by a certificate executed, as depositary, by, and
the appointment of any proxy shall be proved by having the
signature of the person executing the proxy witnessed or
guaranteed by, in each case, any trust company, bank or banker
satisfactory to the Fiscal Agent. Such regulations may provide
that written instruments appointing proxies, regular on their
face, may be presumed valid and genuine without the proof
specified herein or other proof. The holding of Registered
Securities shall be proved by the registry books maintained in
accordance with Section 2(d) hereof or by a certificate or
certificates of the Fiscal Agent in its capacity as the Company's
agent for the maintenance of such books.
(h) The Fiscal Agent shall, by an instrument in
writing, appoint a temporary chairperson of the meeting, unless
the meeting shall have been called by the Company or by the
holders of Securities as provided in Section 14(d) hereof, in
which case the Company or the holders calling the meeting, as the
case may be, shall in like manner appoint a temporary
chairperson. A permanent chairperson and a permanent secretary
of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Securities represented at the
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meeting and entitled to vote.
(i) At any meeting each holder or proxy shall be
entitled to one vote for each U.S. $1,000 principal amount of
Securities held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any
Securities challenged as not outstanding and ruled by the
chairperson of the meeting to be not outstanding. The
chairperson of the meeting shall have no right to vote, except as
a holder or proxy.
(j) Any meeting of holders of Securities duly called
pursuant to Section 14(c) or 14(d) hereof at which a quorum is
present may be adjourned from time to time by vote of the holders
(or proxies for the holders) of a majority in principal amount of
the Securities represented at the meeting and entitled to vote;
and the meeting may be held as so adjourned without further
notice.
(k) The vote upon any resolution submitted to any
meeting of holders of Securities shall be by written ballots on
which shall be subscribed the signatures of the holders of
Securities or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them.
The permanent chairperson of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record, at least
in duplicate, of the proceedings of each meeting of holders of
Securities shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing
that said notice was published as provided in Section 14(c) or
14(d) hereof and, if applicable, Section 14(f) hereof. Each copy
shall be signed and verified by the affidavits of the permanent
chairperson and secretary of the meeting, and one such copy shall
be delivered to the Company and another to the Fiscal Agent to be
preserved by the Fiscal Agent, the copy delivered to the Fiscal
Agent to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
15. Merger, Consolidation or Sale of Assets.
(a) If at any time there shall be a merger,
consolidation, sale or conveyance of assets or assumption of
obligations to which any of the covenants contained in Section 6
of the Definitive Securities is applicable, then in any such
event the successor or assuming corporation referred to therein
will promptly deliver to the Fiscal Agent:
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<PAGE>
(i) A certificate signed by an executive officer
of such successor or assuming corporation stating that as of the
time immediately after the effective date of any such transaction
the covenants of the Company contained in the Definitive
Securities have been complied with and the successor or assuming
corporation is not in default under the provisions of this
Agreement or the Securities; and
(ii) A written opinion of legal counsel (who may
be an employee of or counsel to the successor or assuming
corporation) stating that in such counsel's opinion such
covenants have been complied with and that any instrument or
instruments executed in the performance of such covenants comply
with the requirements thereof.
In case of any such merger, consolidation, sale,
conveyance or assumption, such successor or assuming corporation
shall succeed to and be substituted for the Company with the same
effect, subject to Section 6(b) of the Definitive Securities, as
if it had been named herein and in the Definitive Securities as
the Company; the Company shall thereupon be relieved of any
further obligation or liability hereunder or upon the Securities,
and the Company, as the predecessor corporation may thereupon or
at any time thereafter be dissolved, wound up or liquidated. If
applicable, such successor or assuming corporation thereupon may
cause to be signed, and may issue either in its own name or in
the name of the Company any or all of the Securities issuable
hereunder which theretofore shall not have been executed on
behalf of the Company and delivered to the Fiscal Agent; and,
upon the order of such successor or assuming corporation, instead
of the Company, and subject to all the terms, conditions and
limitations in this Agreement prescribed, the Fiscal Agent shall
authenticate and shall deliver any Securities which previously
shall have been signed and delivered by the officers of the
Company to the Fiscal Agent for authentication, and any
Securities which such successor or assuming corporation
thereafter shall cause to be signed and delivered to the Fiscal
Agent for that purpose. All the Securities so issued shall in
all respects have the same legal rank and benefit under this
Agreement as the Securities theretofore or thereafter issued in
accordance with the terms of this Agreement as though all of such
Securities had been issued at the date of the execution hereof.
In case of any merger, consolidation, sale, conveyance
or assumption, such changes in phraseology and form (but not in
substance) may be made in the Securities thereafter to be issued
as may be appropriate.
(b) The Fiscal Agent may rely on the documents
delivered pursuant to this Agreement by any successor or assuming
corporation pursuant to this Section 15 as conclusive evidence
that any such merger, consolidation, sale, conveyance or
assumption complies with the provisions of this Section and the
Securities.
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<PAGE>
16. Governing Law.
This Agreement, the Securities and any coupons
appertaining thereto shall be governed by and construed in
accordance with the law of the Commonwealth of Massachusetts,
United States of America.
17. Amendments.
This Agreement may be amended by the parties hereto,
and certain provisions hereof may be waived, in the manner
provided in Section 9 of the Definitive Securities. This
Agreement may also be amended by the parties hereto, without the
consent of the holder of any Security, for the purposes set forth
in Section 9 of the Definitive Securities and for the purpose of
curing any ambiguity, or of curing, correcting or supplementing
any defective provision contained herein or in any manner that
the parties may mutually deem necessary or desirable, and that
shall not adversely affect the interests of the holders of the
Securities.
18. Agent for Service of Process.
As long as any of the Securities or coupons
appertaining thereto remain outstanding, the Company will at all
times have an authorized agent in the City of New York, upon whom
process may be served in any legal action or proceeding arising
out of or relating to this Agreement or any Security or any
coupons appertaining thereto. Service of process upon such agent
and written notice of such service mailed or delivered to the
Company shall to the extent permitted by law be deemed in every
respect effective service of process upon the Company in any such
legal action or proceeding. The Company hereby appoints the
Fiscal Agent as its agent for such purpose, and covenants and
agrees that service of process in any legal action or proceeding
may be made upon it at the office of such agent at 55 Water
Street, New York, New York 10041, U.S.A., Attention: Corporate
Trust Department (or such other address in the City of New York,
as may be the principal corporate trust office of such agent in
New York), unless and until the Company shall designate another
agent for such purpose by written notice to the Fiscal Agent. If
the Fiscal Agent receives any such service of process, it shall
promptly notify the Company of such service.
19. Notices.
All notices hereunder shall be deemed to have been
given when deposited in the mail as first class mail, registered
or certified, return receipt requested, postage prepaid,
addressed to any party hereto as follows:
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Address
The Company................... 81 Wyman Street
P.O. Box 9046
Waltham, MA 02254-9046
U.S.A.
Attn: Secretary,
with a copy to
General Counsel
The Fiscal Agent.............. 55 Water Street
New York, NY 10041
U.S.A.
Attn: Corporate Trust
Department
Chemical Bank House
125 London Wall
London EC2Y 5AJ
England
Attn: Global Custody
The Paying Agent.............. 55 Water Street
New York, NY 10041
U.S.A.
Attn: Corporate Trust
Department
Chemical Bank House
125 London Wall
London EC2Y 5AJ
England
Attn: Global Custody
or at any other address of which any of the foregoing shall have
notified the others in writing.
Notices to holders of the Securities shall be given by
publication in an Authorized Newspaper. For purposes of this
Agreement, the term "Authorized Newspaper" means a newspaper
customarily published on each business day in morning editions,
whether or not it shall be published in Saturday, Sunday or
holiday editions, such as The Wall Street Journal (Eastern
edition) in New York City, the Financial Times in London and the
Luxemburger Wort in Luxembourg. If by reason of the temporary or
permanent suspension of publication of any newspaper or by reason
of any other cause it shall be impossible to make publication of
such notice in an Authorized Newspaper as herein provided, then
such publication or other notice in lieu thereof as shall be made
by the Fiscal Agent shall constitute sufficient publication of
such notice, if such publication or other notice shall, so far as
may be possible approximate the terms and conditions of the
publication in lieu of which it is given. Notices will be mailed
to registered holders of Registered Securities at their
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<PAGE>
registered address as the same shall appear on the books of the
Fiscal Agent on the day fifteen days prior to such mailing. The
Fiscal Agent shall promptly furnish to the Company and to each
other paying agency of the Company a copy of each notice so
published or mailed.
20. Counterparts.
This Agreement may be executed in separate
counterparts, and by each party separately in a separate
counterpart, each such counterpart, when so executed and
delivered, to be an original. Such counterparts shall together
constitute but one and the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
THERMO ELECTRON CORPORATION
By: Theo Melas-Kyriazi
------------------------
Title: Treasurer
CHEMICAL BANK, as Agent
By: Morgan Price
------------------------
Title: Attorney-in-Fact
PAGE
<PAGE>
EXHIBIT A
[FORM OF FACE OF REGISTERED DEBENTURE]
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO U.S. PERSONS EXCEPT TO QUALIFIED INSTITUTIONAL BUYERS (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN ACCORDANCE WITH
RULE 144A (IF AVAILABLE) OR OTHERWISE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
Each purchaser, by its purchase of this Security,
represents, acknowledges and agrees that: (1) it is purchasing
"restricted" securities which have not been registered under the
Securities Act; (2) if it should decide to dispose of any of such
Securities, it will not offer, sell, transfer, pledge,
hypothecate or otherwise dispose of any of such Securities except
(A) pursuant to Rule 144A under the Securities Act (if
available), (B) pursuant to Regulation S under the Securities
Act, (C) to a sophisticated institutional investor approved as an
"accredited investor" (within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act by a broker or dealer
registered under Section 15 of the Securities Exchange Act of
1934, (D) pursuant to any other exemption from, or otherwise in a
transaction not subject to, the registration requirements of the
Securities Act as confirmed in an opinion of U.S. counsel or (E)
pursuant to an effective registration statement under the
Securities Act, in each case in accordance with any applicable
state laws of the United States governing the offer or sale of
securities.
[If held by DTC: 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 is registered in the name of Cede &
Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is
made to Cede & Co., 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.]
A-1PAGE
<PAGE>
THERMO ELECTRON CORPORATION.
5% SENIOR CONVERTIBLE DEBENTURE DUE 2001
No. R-_____ U.S. $_____
Thermo Electron Corporation, a corporation duly incorporated
and existing under the laws of the State of Delaware (the
"Company"), for value received, hereby promises to pay to
________________, or registered assigns, the principal sum of
________ Thousand United States Dollars on April 15, 2001 and to
pay interest thereon, from April 15, 1994 or from the most recent
Interest Payment Date to which interest has been paid or duly
provided for, semiannually in arrears on April 15 and October 15,
in each year (each an "Interest Payment Date"), commencing
October 15, 1994 at the rate of 5% per annum until the principal
hereof is paid or made available for payment. Interest hereon
shall be calculated on the basis of a 360 day year comprised of
twelve 30 day months. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as
provided in the Fiscal Agency Agreement, be paid to the person in
whose name this Security is registered at the close of business
on the Record Date for such interest, which shall be April 1 or
October 1 (whether or not a Business Day) next preceding such
Interest Payment Date. Except as otherwise provided in the
Fiscal Agency Agreement, any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the
holder on such Record Date and may be paid at any time in any
lawful manner, all as more fully provided in the Fiscal Agency
Agreement. Payment of interest on this Security shall be made by
United States dollar check drawn on a bank in the City of New
York and mailed to the person entitled thereto at his address as
it shall appear in the Security Register, or (if arrangements
satisfactory to the Company and the Fiscal Agent are made) by
wire transfer to a United States dollar account maintained by the
payee with a bank in the City of New York; provided, however,
that if such mailing is not possible and no such application
shall have been made, payment of interest shall be made at the
Corporate Trust Office of the Fiscal Agent, or such other office
or agency of the Company as may be designated for such purpose in
the City of New York, in United States currency.
Reference is hereby made to the further provisions of this
Security set forth under Terms and Conditions of the Securities
on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
A-2PAGE
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Security to
be duly executed in its corporate name by the manual or facsimile
signature of a duly authorized officer.
Dated: ___________, ____
THERMO ELECTRON CORPORATION
By: ___________________________
[Title]
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<PAGE>
[FORM OF FACE OF BEARER DEBENTURE]
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO U.S. PERSONS EXCEPT TO QUALIFIED INSTITUTIONAL BUYERS (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN ACCORDANCE WITH
RULE 144A (IF AVAILABLE) OR OTHERWISE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,
INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a)
OF THE UNITED STATES INTERNAL REVENUE CODE.
THERMO ELECTRON CORPORATION
(Incorporated in the State of Delaware)
5% SENIOR CONVERTIBLE DEBENTURE DUE 2001
No. B-_____ U.S. $_________
Thermo Electron Corporation, a corporation duly incorporated
and existing under the laws of the State of Delaware (the
"Company"), for value received, hereby promises to pay to bearer
upon presentation and surrender of this Security the principal
sum of _______ Thousand United States Dollars on April 15, 2001
and to pay interest thereon, from the date hereof, semiannually
in arrears on April 15 and October 15 in each year (each an
"Interest Payment Date"), commencing October 15, at the rate of
5% per annum, until the principal hereof is paid or made
available for payment. Interest hereon shall be calculated on
the basis of a 360 day year comprised of twelve 30 day months.
Such payments (including premium, if any) shall be made in such
coin or currency of the United States of America as at the time
of payment shall be legal tender for the payment of public and
private debts, subject to any laws or regulations applicable
thereto and to the right of the Company (limited as provided in
the Fiscal Agency Agreement) to terminate the appointment of any
such paying agency, at the main offices of Chemical Bank,
Chemical Bank House, 125 London Wall, London EC2Y 5AJ, England or
Banque Internationale a Luxembourg, 2 Boulevard Royal, L-2953
LuxembourgVille, Luxembourg or at such other offices or agencies
outside the United States of America, its territories and
possessions as the Company may designate, by United States dollar
check drawn on a bank in the City of New York, or (if
arrangements satisfactory to the Company and the Fiscal Agent are
A-4PAGE
<PAGE>
made) by wire transfer to a United States dollar account
maintained by the holder at a bank outside the United States, its
territories and its possessions. Interest on this Security shall
be paid only at an office or agency located outside the United
States, its territories and possessions and, in the case of
interest due on or before maturity, only upon presentation and
surrender at such an office or agency of the interest coupons
hereto attached as they severally mature. No payment on this
Security or any coupon will be made at the corporate trust office
of the Fiscal Agent or any other paying agency maintained by the
Company in the United States and its possessions, nor will any
payment be made by transfer to an account in, or by mail to an
address in, the United States and its possessions, except as may
be permitted by United States tax laws and regulations in effect
at the time of such payment without detriment to the Company.
Notwithstanding the foregoing, payment of this Security and
coupons may be made at the office of the Fiscal Agent in the City
of New York if full payment at all paying agencies outside the
United States is illegal or effectively precluded by exchange
controls or other similar restrictions.
Reference is hereby made to the further provisions of this
Security set forth under Terms and Conditions of the Securities
on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to
be duly executed in its corporate name by the manual or facsimile
signatures of a duly authorized officer and coupons bearing the
facsimile signature of a duly authorized officer to be annexed
hereto.
Dated: ___________, ____
THERMO ELECTRON CORPORATION
By: ___________________________
[Title]
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[FORM OF FACE OF COUPON ON BEARER DEBENTURES]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,
INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a)
OF THE UNITED STATES INTERNAL REVENUE CODE.
THERMO ELECTRON CORPORATION
5% SENIOR CONVERTIBLE DEBENTURE DUE 2001
U.S. $_________
Due ___________
Unless the Security to which this coupon appertains shall
have been called for previous redemption and payment thereof duly
provided for or converted or exchanged, on the date set forth
hereon, THERMO ELECTRON CORPORATION (herein called the "Company")
will pay to bearer, upon surrender hereof, the amount shown
hereon (together with any Additional Amount in respect thereof
which the Company may be required to pay according to the terms
of said Security) at the paying agencies set out on the reverse
hereof or at such other places outside the United States of
America, its territories and possessions as the Company may
determine from time to time, by United States dollar check drawn
on a bank in the City of New York, or (if arrangements
satisfactory to the Company and the Fiscal Agent referred to in
the Security to which this Coupon appertains are made) wire
transfer to a United States dollar account maintained by the
payee at a bank outside the United States of America, its
territories and possessions, being one-half year's interest then
payable on said Security.
THERMO ELECTRON CORPORATION
By ____________________________
[Title]
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[Reverse of Coupon]
Chemical Bank Banque Internationale a
Chemical Bank House Luxembourg
125 London Wall 2 Boulevard Royal
London EC2Y 5AJ L-2953 LuxembourgVille
England Luxembourg
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CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the
within-mentioned Fiscal Agency Agreement.
CHEMICAL BANK, as Fiscal Agent
By: ___________________________
Authorized Officer
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[Form of Reverse]
Terms and Conditions of the Securities
1. General.
(a) This Security is one of a duly authorized issue of
Securities of the Company designated as its 5% Senior Convertible
Debentures due 2001 (herein called the "Securities"). The
Company, for the benefit of the holders from time to time of the
Securities, has entered into a Fiscal Agency Agreement dated as
of April 15, 1994 (the "Fiscal Agency Agreement"), between the
Company and Chemical Bank, as Fiscal Agent, Paying Agent,
Registrar and Conversion Agent (the "Fiscal Agent"), to which
Fiscal Agency Agreement reference is hereby made for a statement
of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Fiscal Agent, and the
holders of Securities and any coupons appertaining thereto and of
the terms upon which the Securities are, and are to be,
authenticated and delivered. The holders of the Securities will
be entitled to the benefits of, be bound by, and be deemed to
have notice of, all of the provisions of the Fiscal Agency
Agreement. A copy of the Fiscal Agency Agreement is on file and
may be inspected at the offices of paying agencies appointed by
the Company.
(b) The Securities are issuable as bearer Securities
(the "Bearer Securities"), with interest coupons attached, in the
denominations of U.S. $1,000 and U.S. $10,000 (or as otherwise
permitted by the Company, and the Fiscal Agent), and as
registered Securities (the "Registered Securities"), without
coupons, in denominations of U.S. $1,000 and integral multiples
thereof. The Registered Securities, and transfers thereof, shall
be registered as provided in Section 8 hereof and in the Fiscal
Agency Agreement. The holder of any Bearer Security or any
coupon and the registered holder of a Registered Security shall
(to the fullest extent permitted by applicable law) be treated at
all times, by all persons and for all purposes as the absolute
owner of such Security or coupon, as the case may be, regardless
of any notice of ownership, theft or loss or of any writing
thereon.
(c) The Securities are unsecured obligations of the
Company as set forth in Section 7 hereof. There are no
restrictions herein on other indebtedness or securities which may
be incurred or issued by the Company.
(d) The Securities will rank pari passu in right of
payment with all existing and future senior unsecured
indebtedness of the Company and guarantees by the Company on a
non-subordinated basis, including guarantees of indebtedness of
the Company's subsidiaries. The Securities will rank senior to
all existing and future unsecured indebtedness of the Company, or
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guarantees by the Company, that are designated as subordinated or
junior in right of payment to the Securities.
2. Additional Amounts.
The Company will pay, as additional interest
("Additional Amounts"), to the holder of this Security or of any
coupon appertaining hereto who is a United States Alien (as
defined below) such amounts as may be necessary in order that
every net payment of the principal of (and premium, if any) and
interest on this Security, after withholding for or on account of
any present or future tax, assessment or other governmental
charge imposed upon or as a result of such payment by the United
States or any political subdivision or taxing authority thereof
or therein, will not be less than the interest provided herein or
any coupon appertaining hereto to be then due and payable;
provided, however, that the foregoing obligation to pay
additional interest shall not apply to:
(a) any tax, assessment or other governmental charge
which would not have been so imposed but for (i) the
existence of any present or former connection between such
holder (or between a fiduciary, settlor, beneficiary,
member, stockholder, or a person holding a power over, such
holder, if such holder is an estate, trust, partnership or
corporation) and the United States, including, without
limitation, such holder (or such fiduciary, settlor,
beneficiary, member, stockholder or person holding a power)
being or having been a citizen or resident or treated as a
resident thereof or being or having been engaged in a trade
or business therein or being or having been present therein
or having or having had a permanent establishment therein,
(ii) such holder's present or former status as a personal
holding company, foreign personal holding company, passive
foreign investment company, foreign private foundation or
other foreign tax-exempt entity or controlled foreign
corporation for United States tax purposes or a corporation
which accumulates earnings to avoid United States Federal
income tax, or (iii) such holder's status as a bank
extending credit pursuant to a loan agreement entered into
in the ordinary course of business;
(b) any tax, assessment or other governmental charge
which would not have been so imposed but for the
presentation by the holder of this Security or any coupon
appertaining hereto for payment on a date more than 10 days
after the date on which such payment became due and payable
or on the date on which payment thereof is duly provided,
whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer or
personal property tax or any similar tax, assessment or
other governmental charge;
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(d) any tax, assessment or other governmental charge
which would not have been imposed but for the failure to
comply with certification, information, documentation or
other reporting requirements concerning the nationality,
residence, identity or present or former connection with the
United States of the holder or beneficial owner of such
Security or any related coupon if such compliance is
required by statute, regulation or ruling of the United
States or any political subdivision or taxing authority
thereof as a precondition to relief or exemption from such
tax assessment or other governmental charge;
(e) any tax, assessment or other governmental charge
which is payable otherwise than by deduction or withholding
from payments of principal of, premium, if any, or interest
on this Security;
(f) any tax, assessment or other governmental charge
imposed on interest received by a person holding, actually
or constructively, 10 percent or more of the total combined
voting power of all classes of stock of the Company entitled
to vote; or
(g) any tax, assessment or other governmental charge
required to be withheld by any paying agent from any payment
of principal of, premium, if any, or interest on any
Security or interest on any coupon appertaining thereto if
such payment can be made without such withholding by any
other paying agent;
nor shall Additional Amounts be paid with respect to any payment
of the principal of, premium, if any, or interest on this
Security to a person other than the sole beneficial owner of such
payment, or that is a partnership or a fiduciary, to the extent
such beneficial owner, member of such partnership or beneficiary
or settlor with respect to such fiduciary would not have been
entitled to the Additional Amounts had such beneficial owner,
member beneficiary or settlor been the holder of this Security or
any coupon appertaining hereto.
The term "United States Alien" means any person who,
for United States Federal income tax purposes, is a foreign
corporation, a non-resident alien individual, a non-resident
alien fiduciary of a foreign estate or trust, or a foreign
partnership to the extent one or more of the members of which is,
for United States Federal income tax purposes, a foreign
corporation, a non-resident alien individual or an estate or
trust, the income of which is not subject to United States
federal income taxation regardless of its source, and the term
"United States" means the United States of America, its
territories and possessions.
Except as specifically provided herein and in the Fiscal
Agency Agreement, the Company shall not be required to make any
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payment with respect to any tax, assessment or other governmental
charge imposed by any government or any political subdivision or
taxing authority thereof or therein.
3. Redemption.
(a) The Securities are subject to redemption (1) on or
after April 15, 1997 as a whole or in part, at the election of
the Company, at a redemption price equal to 102% of the principal
amount, if redeemed during the 12-month period beginning April
15, 1997, 101% of the principal amount, if redeemed during the
12-month period beginning April 15, 1998, and thereafter at a
redemption price equal to 100% of the principal amount, in each
case together with accrued interest to the date fixed for
redemption, and (2) under the circumstances described in the next
succeeding paragraph at a redemption price equal to 100% of the
principal amount, together in the case of any such redemption
with accrued interest to the date fixed for redemption, but
certain interest installments on Registered Securities will be
payable to the holders of such Securities of record at the close
of business on the relevant Record Dates referred to on the face
hereof, all as provided in the Fiscal Agency Agreement; and
provided, however, that in the event that the Company shall have
elected to redeem all or any part of the Securities under clause
(1) hereof after the date on which a Change in Control (as
defined in Section 3(e) hereof) shall have been determined to
occur by the Continuing Directors (as defined in Section 3(e)
hereof), which Change in Control shall not have been approved by
the Continuing Directors of the Company, the date on which such
redemption may occur shall be not sooner than the first business
day immediately following the termination of the Exercise Period
(as defined in Section 3(e) hereof). If fewer than all of the
then outstanding Securities are to be redeemed, the Securities to
be redeemed will be selected by the Fiscal Agent not more than 75
days prior to the date fixed for redemption, by such method as
the Fiscal Agent shall deem fair and appropriate.
(b) If, at any time, the Company shall determine that
as a result of any change in or amendment to the laws (or any
regulations or rulings promulgated thereunder) of the United
States or any political subdivision or taxing authority thereof
or therein affecting taxation, or any amendment to or change in
an official application or interpretation of such laws,
regulations or rulings, which change or amendment becomes
effective on or after April 15, 1994, the Company has or will
become obligated to pay to the holder of any Security or coupon
Additional Amounts and such obligation cannot be avoided by the
Company taking reasonable measures available to it, then the
Company may, at its election exercised at any time when such
conditions continue to exist, redeem such Securities as a whole
at a redemption price equal to 100% of the principal amount,
together with accrued interest, if any, to the date fixed for
redemption; provided that no such notice of redemption shall be
given earlier than 90 days prior to the earliest date on which
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the Company would be obliged to pay such Additional Amounts were
a payment in respect of this Security then due; and provided
further, that at the time such notice is given, such obligation
to pay such Additional Amounts remains in effect.
Prior to any redemption of the Securities pursuant to the
preceding paragraph, the Company shall provide the Fiscal Agent
with one or more certificates (signed by the President or any
Vice President and the Treasurer or the Secretary) of the Company
to the effect that the Company is entitled to redeem the
Securities pursuant to such paragraph and that the conditions
precedent to the right of the Company to redeem the Securities
pursuant to such paragraph have occurred and a written opinion of
counsel (who may be an employee of the Company) stating that all
legal conditions precedent to the right of the Company to redeem
the Securities pursuant to such paragraph have occurred.
(c) The Company shall, except as set forth in the
succeeding paragraph, redeem the Bearer Securities as a whole but
not in part, at 100% of their principal amount, together with
interest accrued to the date fixed for redemption, after
determining, based on a written opinion of counsel, that any
certification, identification or information reporting
requirement of United States law or regulation with regard to the
nationality, residence or identity of a beneficial owner of a
Bearer Security or a coupon appertaining thereto who is a United
States Alien (as defined in Section 2 hereof) would be applicable
to a payment of principal of, premium, if any, or interest on a
Bearer Security or a coupon appertaining thereto made outside the
United States by the Company or a paying agent (other than a
requirement (a) which would not be applicable to a payment made
(i) directly to the beneficial owner or (ii) to a custodian,
nominee or other agent of the beneficial owner, or (b) which
could be satisfied by the holder, custodian, nominee or other
agent certifying that the beneficial owner is a United States
Alien, provided, however, in each case referred to in clauses
(a)(ii) and (b) payment by such custodian, nominee or agent to
the beneficial owner is not otherwise subject to any requirement
referred to in this sentence). The Company shall make such
determination and will notify the Fiscal Agent thereof as soon as
practicable, stating in the notice the effective date of such
certification, identification, or information reporting
requirement and the dates within which the redemption shall
occur, and the Fiscal Agent shall give prompt notice thereof in
accordance with the Fiscal Agency Agreement. The Company shall
determine the redemption date by notice to the Fiscal Agent at
least 75 days before the redemption date, unless shorter notice
is acceptable to the Fiscal Agent. Such redemption of the Bearer
Securities must take place on such date, not later than one year
after the publication of the initial notice of the Company's
determination of the existence of such certification,
identification or information reporting requirement. The Company
shall not so redeem the Bearer Securities, however, if the
Company shall, based on a subsequent event, determine, based on a
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written opinion of counsel, not less than 30 days prior to the
date fixed for redemption, that no payment would be subject to
any requirement described above, in which case the Company shall
notify the Fiscal Agent, which shall give prompt notice of that
determination in accordance with the Fiscal Agency Agreement and
any earlier redemption notice shall thereupon be revoked and of
no further effect.
Notwithstanding the next preceding paragraph, if and so
long as the certification, identification or information
reporting requirement referred to in the next preceding paragraph
would be fully satisfied by payment of United States withholding,
backup withholding or similar taxes, the Company may elect, prior
to the giving of the notice of redemption and in lieu of
redemption of the Bearer Securities, to have the provisions of
this paragraph apply in lieu of the provisions of the next
preceding paragraph. In that event, the Company will pay such
Additional Amounts (without regard to Section 2 hereof) as are
necessary in order that, following the effective date of such
requirements, every net payment made outside the United States by
the Company or a related paying agent of the principal of,
premium, if any, and interest on a Bearer Security or a coupon
appertaining thereto to a holder who is a United States Alien
(without requirement of any certification, identification or
information reporting requirement as to the nationality,
residence or identity of such holder), after deduction for United
States withholding, backup withholding or similar taxes (other
than withholding, backup withholding or similar taxes (i) which
would not be applicable in the circumstances referred to in the
parenthetical clauses of the first sentence of the preceding
paragraph or (ii) are imposed as a result of presentation of such
Bearer Security or coupon for payment more than 10 days after the
date on which such payment becomes due and payable or on which
payment thereof is duly provided for, whichever is later), will
not be less than the amount provided in the Bearer Security or
the coupon to be then due and payable. If the Company elects to
pay such Additional Amounts and as long as it is obligated to pay
such Additional Amounts, the Company may subsequently redeem the
Bearer Securities, at any time, in whole but not in part, upon
not more than 60 days nor less than 30 days notice, at 100% of
their principal amount, plus accrued interest to the date fixed
for redemption and Additional Amounts, if any.
(d) Each Security is subject to redemption in whole or
in part (which shall be in a principal amount hereof which is
U.S. $1,000 or an integral multiple thereof) at the option of the
holder thereof on any Holder Redemption Date (as defined below)
at a redemption price equal to 100% of the principal amount
thereof, together with accrued interest, if a Redemption Event
shall occur or have occurred. For purposes hereof a "Redemption
Event" shall have occurred if the Company's Common Stock (or
other equity securities into which Securities are then
convertible) is neither listed for trading on a United States
national securities exchange nor approved for trading on an
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established automated over-the-counter trading market in the
United States. The "Holder Redemption Date" with respect to any
Redemption Event shall be the ninetieth day after the later of
the Exchange Date or the Redemption Event.
Notwithstanding the fact that a Security or a portion thereof is
called for redemption by the Company, each holder of a Security
desiring to exercise the option for redemption set forth in this
Section 3(d) shall, as a condition to such redemption, on or
before the close of business on the fifth day prior to the Holder
Redemption Date, surrender the Security to be redeemed in whole
or in part together with the redemption notice hereon duly
executed at the place or places specified in the notice required
by Section 3(f) and otherwise comply with the provisions of
Section 3(g). A holder of a Security who has tendered a
redemption notice (i) will be entitled to revoke its election by
delivering a written notice of such revocation together with the
holder's non-transferable receipt for such Security to the office
or agency of the Company designated as the place for the payment
of the Securities to be so redeemed on or before the Holder
Redemption Date and (ii) will retain the right to convert its
Securities into shares of Common Stock of the Company on or
before the Holder Redemption Date.
(e) Each Security is subject to redemption in whole or
in part (which shall be in a principal amount hereof which is
U.S. $1,000 or an integral multiple thereof) at the option of the
holder thereof on the Repurchase Date (as defined below) at a
redemption price equal to 100% of the principal amount thereof,
together with accrued interest to the Repurchase Date, if a
Change in Control (as defined below) shall have been determined
to occur by the Continuing Directors (as defined below), which
Change in Control shall not have been approved by a majority of
the Continuing Directors prior to the expiration of the Approval
Period (as defined below).
A Change in Control shall be deemed to have occurred at
such time or times when (1) any person that acquired any Common
Stock pursuant to a tender offer becomes the beneficial owner,
directly or indirectly, of more than 50% of the outstanding
Common Stock, (2) any person that is the beneficial owner,
directly or indirectly, of more than 50% of the outstanding
Common Stock becomes the beneficial owner, directly or
indirectly, of any additional shares of Common Stock pursuant to
a tender offer, (3) individuals who constitute the Continuing
Directors cease for any reason to constitute at least a majority
of the Board of Directors of the Company, or (4) the Continuing
Directors shall determine that any other event constitutes an
effective change in control of the Company. The Continuing
Directors shall mean any member of the Board of Directors of the
Company who was a member of the Board of Directors of the Company
on April 15, 1994 and any future director of the Company who has
been nominated or elected by a majority of Continuing Directors
who are then members of the Board of Directors of the Company.
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The Approval Period shall mean an initial period of 60 days after
the date on which a Change of Control shall have occurred, plus
one or more 60 day extensions of such initial or successive
period which extension shall take effect by vote of a majority of
the Continuing Directors taken prior to the expiration of the
applicable 60 day initial or successive period. The Repurchase
Date shall be the date that is 50 days after the expiration of
the Approval Period.
The Company will make the determination whether or not
a Change in Control has occurred, and if one has occurred and it
shall not have been approved by a majority of the Continuing
Directors prior to the expiration of the Approval Period, the
Company shall immediately upon expiration of the Approval Period
give notice to the Fiscal Agent, stating in the notice the nature
of the Change in Control, the Repurchase Date and the redemption
price.
Notwithstanding the fact that a Security or a portion
thereof is called for redemption by the Company, each holder of a
Security desiring to exercise the option for redemption set forth
in this Section 3(e) shall, as a condition to such redemption, on
or before the close of business on the fifth day prior to the
Repurchase Date, surrender the Security to be redeemed in whole
or in part together with the redemption notice thereon duly
executed at the place or places specified in the notice required
by Section 3(f) and otherwise comply with the provisions of
Section 3(g). A holder of a Security who has tendered a
redemption notice will not be entitled to revoke its election and
will lose the right to convert its Securities into shares of
Common Stock of the Company on or before the Repurchase Date.
(f) Notice of redemption will be given by publication
in Authorized Newspapers (as defined in the Fiscal Agency
Agreement) in the City of New York and in London, and, so long as
the Securities are listed on the Luxembourg Stock Exchange, in
Luxembourg, and by mail to holders of Registered Securities, in
each case in the English language, all as provided in the Fiscal
Agency Agreement. In the case of a redemption in whole at the
option of the Company, notice will be given once not more than 60
nor less than 30 days prior to the date fixed for redemption. In
the case of a partial redemption at the option of the Company,
notice will be given twice, the first such notice to be given not
more than 75 nor less than 60 days prior to the date fixed for
redemption and the second such notice to be given not more than
60 or less than 30 days prior to the date fixed for redemption.
In the case of a redemption by the Company at the option of a
holder of a Security pursuant to Section 3(d) hereof, notice will
be given by the Fiscal Agent setting forth the information
described below not later than 10 days after the later of the
Exchange Date or the occurrence of a Redemption Event. In the
case of a redemption by the Company at the option of a holder of
a Security pursuant to Section 3(e) hereof resulting from a
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Change in Control that shall not have been approved by a majority
of the Continuing Directors prior to the expiration of the
Approval Period, notice will be given by the Fiscal Agent setting
forth the information described below not later than 10 days
after the later of the Exchange Date or the expiration of the
Approval Period. Neither the failure to give notice nor any
defect in any notice given to any particular holder of a Security
shall affect the sufficiency of any notice with respect to other
Securities.
Notices relating to the redemption of Securities whether at the
option of the Company or the holder thereof shall specify: the
date fixed for redemption or the Holder Redemption Date, as the
case may be; the redemption price; the place or places of
payment; that payment will be made upon presentation and
surrender of the Securities to be redeemed, together, in the case
of a Bearer Security, with all appurtenant coupons, if any,
maturing subsequent to the date fixed for redemption; that
interest accrued to the date fixed for redemption (unless the
redemption date is an interest payment date) will be paid as
specified in said notice; and that on and after said date
interest thereon will cease to accrue. In the case of a
redemption by the Company at the option of the holder of a
Security pursuant to Section 3(d), the notices given by the
Fiscal Agent informing a holder of such holder's entitlement to
redeem shall also specify that a holder electing redemption will
be entitled to revoke its election by delivering a written notice
of such revocation, together with the holder's non-transferable
receipt for such Security, to the agency designated by the
Company as the place for the payment of the Securities to be so
redeemed not later than the fifth day prior to the Holder
Redemption Date. In the case of a redemption in part at the
option of the Company, notices shall specify the aggregate
principal amount of Securities to be redeemed and the aggregate
principal amount of Securities outstanding after such partial
redemption. The first notice shall specify the last date on
which exchanges or transfers of Securities may be made, and the
second notice shall specify the serial numbers of the Securities
and the portions thereof called for redemption. In the case of a
redemption in whole or in part by the Company, notices shall
specify the date the conversion privilege expires in accordance
with Section 4(a) hereof. Such notices shall also state that the
conditions precedent, if any, to such redemption have occurred.
(g) If (i) notice of redemption has been given in the
manner set forth in Section 3(f) hereof with respect to
Securities to be redeemed at the option of the Company, or (ii)
notice of redemption has been given by the holder of a Security
to be redeemed pursuant to Section 3(d) or 3(e) hereof, the
Securities so to be redeemed shall become due and payable on the
applicable redemption date specified in such notice and upon
presentation and surrender of the Securities at the place or
places specified in the notice given by the Company with respect
to such redemption, together in the case of Bearer Securities
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with all appurtenant coupons, if any, maturing subsequent to the
redemption date, the Securities shall be paid and redeemed by the
Company, at the places and in the manner and currency herein
specified and at the redemption price together with accrued
interest, if any, to the redemption date; provided, however, that
interest due in respect of coupons maturing on or prior to the
redemption date shall be payable only upon the presentation and
surrender of such coupons (at an office or agency located outside
of the United States of America). If any Bearer Security
surrendered for redemption shall not be accompanied by all
appurtenant coupons maturing after the redemption date, such
Security may be paid after deducting from the amount otherwise
payable an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may
be waived by the Company and the Fiscal Agent if they are
furnished with such security or indemnity as they may require to
save each of them and each other paying agency of the Company
harmless. From and after the redemption date, if monies for the
redemption of Securities shall have been available at the
principal corporate trust office of the Fiscal Agent for
redemption on the redemption date, the Securities shall cease to
bear interest, the coupons for interest appertaining to Bearer
Securities maturing subsequent to the redemption date shall be
void, and the only right of the holders of such Securities shall
be to receive payment of the redemption price together with
accrued interest (unless the redemption date is an interest
payment date) to the redemption date as aforesaid. If monies for
the redemption of the Securities are not made available for
payment until after the redemption date, the Securities shall not
cease to bear interest until such monies have been so made
available.
4. Conversion.
(a) Subject to and upon compliance with the provisions
of the Fiscal Agency Agreement, a holder of Securities is
entitled, at his option, at any time on or after the latest of
(i) June 30, 1994, (ii) the Exchange Date (as defined in the
Fiscal Agency Agreement) or (iii) the Registration Date (as
defined in the Fiscal Agency Agreement) and on or before the
close of business on April 15, 2001, or in case a Security or a
portion thereof is called for redemption by the Company, or the
holder thereof elects to have such Security or a portion thereof
redeemed by the Company pursuant to Section 3(d) hereof, then in
respect of such Security or such portion thereof until and
including, but (unless the Company defaults in making the payment
due upon redemption) not after, the close of business on the date
that is 15 days (or if such day is a non-business day as
described in Section 11 hereof in New York City, then the next
business day) preceding the date fixed for redemption, or in the
case of a Security or portion thereof which the holder elects to
have redeemed by the Company pursuant to Section 3(e) hereof,
then in respect of such Security or such portion until and
including, but (unless the Company defaults in making the payment
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due upon redemption) not after, the close of business on the date
the holder makes such election, to convert such Security (or any
portion of the principal amount hereof which is U.S. $1,000 or an
integral multiple thereof), at the principal amount thereof, or
of such portion, into fully paid and nonassessable shares
(calculated as to each conversion to the nearest 1/1000 of a
share) of Common Stock of the Company ("Common Stock") at a
Conversion Price equal to U.S. $47.25 aggregate principal amount
of Securities for each share of Common Stock (the "Conversion
Price") (or at the current adjusted Conversion Price if an
adjustment has been made as provided herein) by surrender of the
Security, or in the case of a Security submitted for redemption
pursuant to Section 3(d) or Section 3(e) hereof satisfactory
evidence of such submission, together with (i) if a Bearer
Security, all unmatured coupons and any matured coupons in
default appertaining thereto, and if a Registered Security (if so
required by the Company or the Fiscal Agent), instruments of
transfer in form satisfactory to the Company and the Fiscal
Agent, duly executed by the registered holder or by his duly
authorized attorney and (ii) the conversion notice hereon duly
executed (a) at the Corporate Trust Office of the Fiscal Agent,
or at such other office or agency of the Company as may be
designated by it for such purpose in the City of New York, or (b)
subject to any laws or regulations applicable thereto and subject
to the right of the Company to terminate the appointment of any
such conversion agency, at the offices of Chemical Bank, Chemical
Bank House, 125 London Wall, London EC2Y 5AJ, England, and Banque
Internationale a Luxembourg, 2 Boulevard Royal, L-2953
LuxembourgVille, Luxembourg, or at such other offices or agencies
as the Company may designate.
(b) In the case of a conversion after the close of
business on a Record Date next preceding any interest payment
date and on or before the opening of business on such interest
payment date, the holder of record of a Registered Security at
such Record Date is to receive an installment of interest on the
interest payment date. No payment or adjustment is to be made on
conversion for dividends on the Common Stock delivered on
conversion. Except as set forth in the first sentence of this
subsection (b), accrued interest from the immediately preceding
interest payment date until the date of conversion (together with
Additional Amounts, if any, thereon) will be paid to the holder
within five business days after presentment for conversion. No
fractions of shares or scrip representing fractions of shares
will be issued or delivered on conversion, but instead of any
fractional interest the Company shall pay a cash adjustment as
provided in the Fiscal Agency Agreement. Such conversion shall
be so effected by the Company, except payment of accrued interest
(together with Additional Amounts, if any, thereon) which will be
paid by the Paying Agent.
(c) (i) In case at any time the Company shall pay
or make a dividend or other distribution on any class of
capital stock of the Company in Common Stock, the Conversion
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Price in effect at the opening of business on the day
following the date fixed for the determination of
stockholders entitled to receive such dividend or other
distribution shall be reduced so that the same shall equal
the price determined by multiplying such Conversion Price by
a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business
on the date fixed for such determination and the denominator
shall be the sum of such number of shares and the total
number of shares constituting such dividend or other
distribution, such adjustment to become effective
immediately after the opening of business on the day
following the date fixed for such determination.
(ii) In case at any time the Company shall (A)
subdivide its outstanding Common Stock, (B) combine its
outstanding Common Stock into a smaller number of shares, or
(C) issue by reclassification of its Common Stock (including
any such reclassification in connection with a consolidation
or merger in which the Company is the continuing
corporation) any shares, the Conversion Price in effect at
the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that
the holder of any Security surrendered for conversion after
such time shall be entitled to receive the aggregate number
and kind of shares which, if such Security had been
converted immediately prior to such time, the holder would
have owned upon such conversion and been entitled to receive
upon such subdivision, combination or reclassification.
Such adjustment shall be made successively whenever any
event listed above shall occur.
(iii) In case at any time the Company shall fix
a record date for the issuance of rights or warrants to all
holders of its Common Stock entitling them to subscribe for
or purchase shares of Common Stock at a price per share less
than the current market price per share (determined as
provided in paragraph (v) of this subsection (c)) of the
Common Stock on such record date, the Conversion Price in
effect at the opening of business on the day following such
record date, shall be reduced so that the same shall equal
the price determined by multiplying such Conversion Price by
a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business
on such record date plus the number of shares of Common
Stock which the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription
or purchase would purchase at such current market price and
the denominator shall be the number of shares of Common
Stock outstanding at the close of business on such record
date plus the number of shares of Common Stock so offered
for subscription or purchase, such reduction to become
effective immediately after the opening of business on the
day following such record date. Such reduction shall be
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made successively whenever such a record date is fixed; and
in the event that such rights or warrants are not so issued,
the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such
record date had not been fixed.
(iv) In case at any time the Company shall fix
a record date for the making of a distribution, by dividend
or otherwise, to all holders of its Common Stock, of
evidences of its indebtedness or assets (including
securities, but excluding any dividend or distribution
referred to in paragraph (i) of this subsection (c), any
rights or warrants referred to in paragraph (iii) of this
subsection (c), and any dividend or distribution paid in
cash out of the retained earnings of the Company), then in
each such case the Conversion Price in effect after such
record date shall be determined by multiplying the
Conversion Price in effect immediately prior to such record
date by a fraction, of which the numerator shall be the
total number of outstanding shares of Common Stock
multiplied by the current market price per share of Common
Stock (as defined in paragraph (v) of this subsection (c))
on such record date, less the fair market value (as
determined by the Board of Directors of the Company, whose
determination shall be conclusive and described in a
statement filed with the Fiscal Agent) of the portion of the
assets or evidences of indebtedness so to be distributed,
and of which the denominator shall be the total number of
outstanding shares of Common Stock multiplied by such
current market price per share of Common Stock. Such
adjustment shall be made successively whenever such a record
date is fixed; and in the event that such distribution is
not so made, the Conversion Price shall again be adjusted to
be the Conversion Price which would then be in effect if
such record date had not been fixed.
(v) For the purpose of any computation under
paragraphs (iii) and (iv) of this subsection (c), the
current market price per share of Common Stock on any date
shall be deemed to be the average of the Closing Prices for
the 15 consecutive days upon which the principal trading
market for the Common Stock is open selected by the Company
commencing not less than 20 nor more than 30 days before the
day in question. The Closing Price for any day shall be the
last reported sales prices regular way or, in case no such
reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either
case on the New York Stock Exchange or, if the Common Stock
is not listed or admitted to trading on such Exchange, on
the principal national securities exchange on which the
Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on any national securities
exchange, the closing sale price quoted on the Nasdaq
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National Market, or if not so quoted, as determined by the
Company.
(vi) The Company may make such adjustments in
the Conversion Price, in addition to those required by
paragraphs (i), (ii) and (iii) of this section, as it
considers to be advisable in order that any event treated
for United States Federal income tax purposes as a dividend
of stock or stock rights shall not be taxable to the
recipients.
(vii) No adjustment in the Conversion Price
shall be required unless such adjustment would require an
increase or decrease of at least twenty-five cents ($0.25)
in such Conversion Price; provided, however, that any
adjustment which by reason of this paragraph (vii) is not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations
under this subsection (c) shall be made to the nearest cent
or to the nearest 1/1000 of a share, as the case may be.
(d) Whenever the Conversion Price is adjusted and in
the event of certain other corporate actions, as herein provided,
the Company shall give notice, all as provided in the Fiscal
Agency Agreement.
(e) The Company shall in good faith use its best
efforts (i) to cause all registrations with, and to obtain any
approvals by, any governmental authority under any Federal or
state law of the United States that may be required before the
shares of Common Stock may be lawfully issued or transferred and
delivered and (ii) to list the shares of Common Stock required to
be issued or delivered upon conversion of the Securities prior to
such issue or delivery on each national securities exchange on
which the outstanding Common Stock is listed at the time of such
delivery.
(f) The Company shall, from and after the date on
which the Securities are convertible into Common Stock, have
reserved and available, free from preemptive rights, out of its
authorized but unissued Common Stock, for the purpose of
effecting the conversion of Securities, the full number of shares
of Common Stock then issuable upon the conversion of all
Securities. The Company covenants that all shares of Common
Stock which may be issued or delivered upon conversion of
Securities will upon issue be fully paid and nonassessable.
(g) Subject to the rights of the holder pursuant to
Section 3(e) hereof, in case of any consolidation with, or merger
of the Company into, any other corporation, or in case of any
merger of another corporation into the Company (other than a
merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of
the Company), or in case of any sale or transfer of all or
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substantially all of the assets of the Company, the corporation
formed by such consolidation or resulting from such merger or
which acquires such assets, as the case may be, shall execute and
deliver to the Fiscal Agent an amendment to the Fiscal Agency
Agreement providing that the holder of each Security shall have
the right during the period such Security shall be convertible as
specified in section (a) hereof to convert such Security only
into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by a
holder of the number of shares of Common Stock of the Company
into which such Security might have been converted immediately
prior to such consolidation, merger, sale or transfer assuming,
if such consolidation, merger, sale or transfer is prior to the
period such Security shall be convertible as specified in
subsection (a) hereof, that the Securities were convertible at
such time at the initial Conversion Price as adjusted from April
15, 1994 to such time pursuant to paragraphs (i), (ii), (iii),
(iv) and (vi) of subsection (c) hereof. Such amendment shall
provide for adjustments which, for events subsequent to the
effective date of such amendment, shall be as nearly equivalent
as may be practicable to the adjustments provided for herein.
The above provisions of this subsection shall similarly apply to
successive consolidations, mergers, sales or transfers.
5. Events of Default.
In the event that any of the following ("Events of
Default") shall occur and be continuing:
(a) the Company shall fail to pay when due the
principal, or premium, if any, on any of the Securities whether
at maturity or upon redemption or otherwise; or
(b) the Company shall fail to pay any installment of
interest or Additional Amounts (as described in Section 2 hereof)
on any of the Securities for a period of 10 days after the date
when due; or
(c) the Company shall fail duly to perform or observe
any other term, covenant or agreement contained in any of the
Securities or in the Fiscal Agency Agreement, for a period of 60
days after the date on which written notice of such failure,
requiring the Company to remedy the same, shall first have been
given to the Company and the Fiscal Agent by the holders of at
least 25% in aggregate principal amount of the Securities at the
time outstanding; provided, however, that in the event the
Company shall within the aforesaid period of 60 days commence
legal action in a court of competent jurisdiction seeking a
determination that the Company had not failed to duly perform or
observe the term or terms, covenant or covenants or agreement or
agreements specified in the aforesaid notice, such failure shall
not be an Event of Default unless the same continues for a period
of 10 days after the date of any final determination to the
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effect that the Company had failed to duly perform or observe one
or more of such terms, covenants or agreements; or
(d) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company in
an involuntary case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law now
or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official)
of the Company or for any substantial part of its property, or
ordering the winding-up or liquidation of the affairs of the
Company and such decree or order shall remain unstayed and in
effect for a period of 20 consecutive days; or
(e) the Company shall commence a voluntary case or
proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect,
or shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the
appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or similar official)
of the Company or for any substantial part of its property, or
shall make any general assignment for the benefit of creditors,
or shall admit in writing its inability to pay its debts as they
become due or shall take any corporate action in furtherance of
any of the foregoing; or
(f) an event of default, as defined in any indenture
or instrument evidencing or under which the Company shall have
outstanding at least $10,000,000 (or its equivalent in another
currency) in aggregate principal amount of indebtedness for
borrowed money, shall happen and be continuing and such default
shall involve the failure to pay the principal of such
indebtedness (or any part thereof), when due and payable after
the expiration of any applicable grace period with respect
thereto, or such indebtedness shall have been accelerated so that
the same shall be or become due and payable prior to the date on
which the same would otherwise have become due and payable, and
failure to pay shall not have been cured by the Company within 20
days after such failure or such acceleration shall not be
rescinded or annulled within 20 days after notice thereof shall
have first been given to the Company; provided that if such event
of default under such indenture or instrument shall be remedied
or cured by the Company or waived by the holders of such
indebtedness, then the Event of Default hereunder by reason
thereof shall be deemed likewise to have been thereupon remedied,
cured or waived without further action upon the part of any of
the holders of Securities;
then the holder of this Security may, at such holder's option,
declare the principal of this Security and the interest accrued
hereon (and Additional Amounts under Section 2 hereof, if any,
thereon) to be due and payable immediately by written notice to
the Company and the Fiscal Agent, and if any such Event of
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Default shall continue at the time of receipt of such written
notice, the principal of this Security and the interest accrued
hereon (and Additional Amounts, if any, hereon) shall become
immediately due and payable, subject to the proviso of subsection
(c) of this Paragraph 5. Upon payment of such amount of
principal, premium, if any, and interest (and Additional Amounts
pursuant to Section 2 hereof, if any), all of the Company's
obligations in respect of payment of principal of and interest on
(and Additional Amounts, if any, on) this Security shall
terminate. Interest on overdue principal, premium, if any, and
interest (and Additional Amounts, if any) shall accrue from the
date on which such principal, premium, if any, and interest (and
Additional Amounts, if any) was due and payable to the date such
principal and interest (and Additional Amounts, if any) is paid
or duly provided for, at the rate borne by the Securities (to the
extent payment of such interest shall be legally enforceable).
6. Merger, Consolidation, Sale, Conveyance or Assumption.
(a) Subject to the rights of the holder pursuant to
Section 3(e) hereof, the Company will not merge or consolidate
with, or sell or convey all or substantially all of its assets
to, any other corporation, unless (i) either (A) the Company
shall be the surviving corporation in the case of a merger or (B)
(I) the surviving, resulting or transferee corporation shall
expressly assume the due and punctual payment (including
Additional Amounts pursuant to Section 2 hereof, if any) of all
the Securities, according to their tenor, and the due and
punctual performance of all of the covenants and obligations of
the Company under the Securities, the coupons and the Fiscal
Agency Agreement, by supplemental agreement reasonably
satisfactory to the Fiscal Agent, (II) immediately after such
merger, consolidation, sale or conveyance, the Securities will
not be subject to United States Federal estate tax as a result
thereof, if held by a person who at the time of death is not a
citizen or resident of the United States unless such successor
corporation shall have agreed, by supplemental agreement, to
indemnify the persons liable therefor for the amount of United
States Federal estate tax attributable and paid in respect of any
Securities includable in the gross estate of a person who at the
time of death is not a citizen or resident of the United States
or unless the Securities would be subject to United States
Federal estate tax immediately prior to such merger,
consolidation, sale or conveyance if held by a person who at the
time of death is not a citizen or resident of the United States,
and (III) the Fiscal Agent shall have received the documentation
required in the context by the Fiscal Agency Agreement, (ii) the
surviving, resulting or transferee corporation, if not organized
and validly existing under the laws of the United States, shall
expressly agree to make payments under the Securities free of any
deduction or withholding for or on account of taxes, levies,
imposts and charges whatsoever imposed by or for the account of
the jurisdiction where such successor corporation is generally
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subject to taxation (or any political subdivision or taxing
authority thereof or therein) in a manner equivalent to that set
forth herein, subject to the exceptions contained in such forms
of the Securities, and (iii) the Company or such successor
corporation, as the case may be, shall not, immediately after
such merger, consolidation, sale or conveyance, be in default in
the performance of any covenants or obligations of the Company
under the Securities or the Fiscal Agency Agreement. In
calculating the amount of tax attributable to any Securities for
purposes of sub-clause (II) above in accordance with the
provisions of the Internal Revenue Code of 1986, as amended, the
gross estate of the decedent shall be deemed to include only
Securities issued under the Fiscal Agency Agreement.
(b) Upon any merger, consolidation, sale, conveyance
or assumption as provided in Section 6(a), the successor or
assuming corporation shall succeed to and be substituted for, and
may exercise every right and power of and be subject to all the
obligations of, the Company under the Securities and Fiscal
Agency Agreement, with the same effect as if such successor or
assuming corporation had been named as the Company therein and
herein and the Company shall be released from its obligations as
obligor under the Securities and Fiscal Agency Agreement;
provided that any successor or assuming corporation shall have
the right to redeem the Securities pursuant to Section 3(b)
hereof only as a result of circumstances which occur subsequent
to such merger, consolidation, sale, conveyance or assumption and
as a result of which the Company would have had such right if the
Company had remained the obligor on the Securities.
7. [Not Applicable]
8. Replacement, Transfer and Exchange of Securities.
(a) In case any Security shall at any time become
mutilated, destroyed, stolen or lost and such Security or
evidence of the loss, theft or destruction thereof (together with
the indemnity hereinafter referred to and such other documents or
proof as may be required) shall be delivered to the Fiscal Agent,
a new Security of like tenor and date with appropriate interest
coupons, if any, will be issued by the Company in exchange for
the Security so mutilated, or in lieu of the Security so
destroyed, stolen or lost, but, in the case of a destroyed,
stolen or lost Security only upon receipt of evidence
satisfactory to the Fiscal Agent and the Company that such
Security was destroyed, stolen or lost, and if required by the
Fiscal Agent or the Company, upon receipt also of indemnity
satisfactory to the Fiscal Agent and the Company. All expenses
and reasonable charges associated with procuring such indemnity
and with the preparation, authentication and delivery of a new
Security shall be borne by the owner of the Security so
mutilated, destroyed, stolen or lost.
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(b) As provided in the Fiscal Agency Agreement and
subject to certain limitations therein set forth, Bearer
Securities (with all unmatured coupons appertaining thereto) are
exchangeable at, subject to applicable laws and regulations, the
offices of the paying agencies in London and Luxembourg or as
designated by the Company for such purpose pursuant to the Fiscal
Agency Agreement, for an equal aggregate principal amount of
Registered Securities and/or Bearer Securities of authorized
denominations, and Registered Securities are exchangeable at the
Corporate Trust Office of the Fiscal Agent in the City of New
York or, subject to applicable laws and regulations, the offices
of the paying agencies in London and Luxembourg or as designated
by the Company for such purpose pursuant to the Fiscal Agency
Agreement, for an equal aggregate principal amount of Registered
Securities of authorized denominations as requested by the holder
surrendering the same. Registered Securities will not be
exchangeable into Bearer Securities. The Company shall not be
required (a) to exchange Bearer Securities for Registered
Securities during the period between the close of business on
each April 1 and October 1 and the opening of business on the
next succeeding interest payment date, or (b) in the event of a
redemption in part, (i) to register the transfer of Registered
Securities or to exchange Bearer Securities for Registered
Securities for a period of 15 days immediately preceding the date
notice is given identifying the serial numbers of the Securities
called for such redemption; (ii) to register the transfer of or
exchange any such Registered Securities, or portion thereof,
called for redemption; or (iii) to exchange any such Bearer
Securities called for redemption; provided, however, that a
Bearer Security called for redemption may be exchanged for a
Registered Security which is simultaneously surrendered, with
written instruction for payment on the date fixed for
redemption, unless the date fixed for redemption is during the
period between the close of business on each April 1 and October
1 and the close of business on the next succeeding interest
payment date, in which case such exchange may only be made prior
to the close of business on April 1 or October 1 immediately
preceding the date fixed for redemption. The Company also shall
not be required to exchange Securities if, as a result thereof,
the Company would incur adverse consequences under United States
Federal income tax laws in effect at the time of such exchange.
In the event of redemption or conversion of a Registered Security
in part only, a new Security or Securities for the unredeemed or
unconverted portion hereof will be issued in the name of the
holder thereof.
(c) The costs and expenses of effecting any exchange
or registration of transfer pursuant to the foregoing provisions,
except for the expenses of delivery by other than regular mail
(if any) and except, if the Company shall so require, the payment
of a sum sufficient to cover any tax or other governmental charge
or insurance charges that may be imposed in relation thereto,
will be borne by the Company.
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(d) The Company has initially appointed as registrar
and transfer agent the Fiscal Agent acting through its principal
corporate trust office in New York. The Company has also
initially appointed Banque Internationale a Luxembourg as a
transfer agent. The Company may at any time terminate the
appointment of the registrar and transfer agent and appoint
additional or other registrars and transfer agents or to approve
any change in an office through which the registrar and transfer
agent acts; provided that, until all of the Securities have been
delivered to the Fiscal Agent for cancellation, or monies
sufficient to pay the Securities have been made available for
payment and either paid or returned to the Company as provided in
the Securities, the Company will maintain a registrar and a
transfer agent in the City of New York in the United States.
(e) For purposes of the provisions of this Security
and the Fiscal Agency Agreement, any Security authenticated and
delivered pursuant to the Fiscal Agency Agreement shall, as of
any date of determination, be deemed to be "outstanding", except
for:
(i) Securities previously cancelled by the
Fiscal Agent or delivered to the Fiscal Agent for cancellation;
(ii) Securities which have been called for
redemption by the Company in accordance with Section 3 hereof or
which have become due and payable at maturity or otherwise and
with respect to which monies sufficient to pay the principal
thereof and interest thereon shall have been made available to
the Fiscal Agent; or
(iii) Securities in lieu of or in substitution
for which other Securities have been authenticated and delivered
pursuant to the Fiscal Agency Agreement;
provided, however, that in determining whether the holders of the
requisite principal amount of outstanding Securities are present
at a meeting of holders of Securities for quorum purposes or have
given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Securities owned by the Company or
any subsidiary thereof shall be disregarded and deemed not to be
outstanding.
9. Modifications and Amendments.
(a) Without the consent of any holders of Securities
or coupons, modifications of or amendments to the Fiscal Agency
Agreement or the Terms and Conditions of the Securities may be
made for any of the following purposes:
(i) to evidence the succession of another
corporation to the Company and the assumption by any such
successor of the covenants of the Company in the Fiscal Agency
Agreement or the Securities;
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(ii) to add to the covenants of the Company for
the benefit of the holders of Securities or coupons, or to
surrender any right or power herein conferred upon the Company;
(iii) to permit payment of principal, premium,
if any, and interest on Bearer Securities in the United States,
provided that such payment is permitted by United States tax laws
and regulations then in effect;
(iv) to make provision with respect to the
conversion rights of holders of Securities pursuant to Section
4(g) hereof;
(v) to cure any ambiguity, to correct or
supplement any provision herein which may be inconsistent with
any other provision herein, or to make any other provisions with
respect to matters or questions arising under this Security or
the Fiscal Agency Agreement, provided such action pursuant to
this clause (v) shall not materially adversely affect the
interests of the holders of Securities or coupons; or
(vi) to permit the issuance of additional
Securities pursuant to the Fiscal Agency Agreement.
(b) Modifications and amendments to the Fiscal Agency
Agreement or to these Terms and Conditions may be made, and
future compliance with or past default by the Company under any
of the provisions thereof may be waived, with the consent of the
holders of at least a majority in aggregate principal amount of
the Securities at the time outstanding, or of such lesser
percentage as may act at a meeting of holders of Securities held
in accordance with the provisions set forth herein; provided,
that no such modification, amendment or waiver may, without the
consent of the holder of each such Security affected thereby:
(i) waive a default in the payment of the
principal of, premium, if any, or interest on any Security;
(ii) change the stated maturity of the
principal or premium, if any, on, or any installment of interest
on, any Security, or reduce the principal amount thereof or the
rate of interest thereon or any premium payable on the redemption
thereof, or change the obligation of the Company to pay
Additional Amounts pursuant to Section 2 hereof (except as
permitted by subsection (a) of this Section 9 or by the Fiscal
Agency Agreement), or change the coin or currency in which any
Security or any premium or the interest thereon is payable, or
adversely affect the right to redeem (pursuant to Section 3(d) or
Section 3(e) hereof) or convert any Securities as provided in
Sections 3 and 4, respectively;
(iii) reduce the requirements of Section 10
hereof for quorum or voting, or reduce the percentage in
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principal amount of the outstanding Securities the consent of
whose holders is required for any amendment or modification of
the Fiscal Agency Agreement or the Terms and Conditions of the
Securities or the consent of whose holders is required for any
waiver (of compliance with certain provisions of the Fiscal
Agency Agreement or the Securities or certain defaults hereunder
and thereunder and their consequences) provided for in these
Terms and Conditions;
(iv) change the obligation of the Company to
maintain an office or agency in the City of New York and outside
the United States; or
(v) modify any of the provisions of this
section except to increase any such percentage or to provide that
certain other provisions of the Fiscal Agency Agreement or the
Securities cannot be modified or waived without the consent of
the holder of each outstanding Security affected thereby.
It shall not be necessary for any act of holders of Securities
under this Section to approve the particular form of any proposed
amendment, modification or waiver, but it shall be sufficient if
such act shall approve the substance thereof. Any modifications,
amendments or waivers to the Fiscal Agency Agreement or to these
Terms and Conditions will be conclusive and binding on all
holders of the Securities, whether or not they have given such
consent or were present at such meeting, and on all holders of
coupons, whether or not notation of such modifications,
amendments or waivers is made upon the Securities or coupons, and
on all future holders of Securities and coupons. Any instrument
given by or on behalf of any holder of a Security in connection
with any consent to any such modification, amendment or waiver
will be irrevocable once given and will be conclusive and binding
on all subsequent holders of such Security.
10. Meetings and Votes of Holders.
(a) A meeting of holders of Securities may be called
at any time and from time to time pursuant to this Section for
any of the following purposes: (i) to give any notice to the
Company or to the Fiscal Agent, or to give any directions to the
Fiscal Agent, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action
authorized to be taken by holders of Securities pursuant to these
Terms and Conditions; or (ii) to take any other action authorized
to be taken by or on behalf of the holders of any specified
aggregate principal amount of the Securities under any other
provision of the Fiscal Agency Agreement, under applicable law or
under these Terms and Conditions.
(b) Meetings of holders of Securities may be held at
such place or places in New York City or London as the Fiscal
Agent or, in case of its failure to act, the Company or the
holders calling the meeting shall from time to time determine.
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The Fiscal Agent may at any time call a meeting of
holders of the Securities to be held at such time and at such
place in any of such designated locations as the Fiscal Agent
shall determine. Notice of every meeting of holders shall be
made as specified in the Fiscal Agency Agreement.
In case at any time the Company or the holders of at
least 25% in aggregate principal amount of the Securities shall
have requested the Fiscal Agent to call a meeting of the holders,
by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Fiscal Agent shall
not have given the first notice of such meeting within 21 days
after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Company
or the holders of Securities in the amount above specified may
determine the time and the place in such designated locations for
such meeting and may call such meeting to take any action
authorized herein by giving notice thereof as provided in the
Fiscal Agency Agreement.
(c) To be entitled to vote at any meeting of holders
of Securities, a person shall be (i) a holder of one or more
Securities, or (ii) a person appointed by an instrument in
writing as proxy for a holder or holders of Securities by such
holder or holders, which proxy need not be a holder of
Securities. The only persons who shall be entitled to be present
or to speak at any meeting of holders shall be the persons
entitled to vote at such meeting and their counsel and any
representatives of the Fiscal Agent and its counsel and any
representatives of the Company and its counsel. The persons
entitled to vote a majority in principal amount of the Securities
shall constitute a quorum for the transaction of all business
specified in such subsection (a) hereof. No business shall be
transacted in the absence of a quorum unless a quorum is
represented when the meeting is called to order. In the absence
of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of the
holders of Securities, be dissolved. In any other case the
meeting shall be adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening
of any adjourned meeting shall be given as provided in the Fiscal
Agency Agreement. Subject to the foregoing, at the reconvening
of any meeting adjourned for a lack of a quorum the persons
entitled to vote 25% in principal amount of the Securities shall
constitute a quorum for the taking of any action set forth in the
notice of the original meeting. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage of the
aggregate principal amount of the Securities that shall
constitute a quorum. At a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid, any
resolution and all matters (except as limited by Section 9 of
these Terms and Conditions) shall be effectively passed and
A-31PAGE
<PAGE>
decided if passed or decided by the persons entitled to vote a
majority in principal amount of the Securities represented and
voting at such meeting, provided that such amount shall be not
less than 25% in principal amount of the Securities outstanding.
Any holder of a Security who has executed an instrument in
writing appointing a person as his proxy shall be deemed to be
present for the purposes of determining a quorum and be deemed to
have voted; provided, however, that such holder shall be
considered as present or voting only with respect to the matters
covered by such instrument in writing. Any resolution passed or
decision taken at any meeting of the holders of Securities duly
held in accordance with this Section 10 shall be binding on all
the holders of Securities whether or not present or represented
at the meeting.
(d) The Fiscal Agent may make such reasonable
regulations as it may deem advisable for any meeting of holders
of Securities in regard to proof of the holding of Securities and
of the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and examination
of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Bearer
Securities shall be proved by the production of the Bearer
Securities or by a certificate executed, as depositary, by, and
the appointment of any proxy shall be proved by having the
signature of the person executing the proxy witnessed or
guaranteed by, in each case, any trust company, bank or banker
satisfactory to the Fiscal Agent. Such regulations may provide
that written instruments appointing proxies, regular on their
face, may be presumed valid and genuine without the proof
specified herein or other proof. The holding of Registered
Securities shall be proved by the registry books maintained in
accordance with the Fiscal Agency Agreement or by a certificate
or certificates of the Fiscal Agent in its capacity as the
Company's agent for the maintenance of such books.
(e) The Fiscal Agent shall, by an instrument in
writing, appoint a temporary chairperson of the meeting, unless
the meeting shall have been called by the Company or by the
holders of Securities as provided herein and in the Fiscal Agency
Agreement, in which case the Company or the holders calling the
meeting, as the case may be, shall in like manner appoint a
temporary chairperson. A permanent chairperson and a permanent
secretary of the meeting shall be elected by vote of the holders
of a majority in principal amount of the Securities represented
at the meeting and entitled to vote. At any meeting each holder
or proxy shall be entitled to one vote for each U.S. $1,000
principal amount of Securities held or represented by him;
provided, however, that no vote shall be cast or counted at any
meeting in respect of any Securities challenged as not
outstanding and ruled by the chairperson of the meeting to be not
outstanding. The chairperson of the meeting shall have no right
A-32PAGE
<PAGE>
to vote, except as a holder or proxy. Any meeting of holders of
Securities duly called at which a quorum is present may be
adjourned from time to time by vote of the holders (or proxies
for the holders) of a majority in principal amount of the
Securities represented at the meeting and entitled to vote; and
the meeting may be held as so adjourned without further notice.
(f) The vote upon any resolution submitted to any
meeting of holders of Securities shall be written ballots on
which shall be subscribed the signatures of the holders of
Securities or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them.
The permanent chairperson of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record, at least
in duplicate, of the proceedings of each meeting of holders of
Securities shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing
that said notice was published as provided in the Fiscal Agency
Agreement. Each copy shall be signed and verified by the
affidavits of the permanent chairperson and secretary of the
meeting, and one of such copy shall be delivered to the Company
and another to the Fiscal Agent to be preserved by the Fiscal
Agent, the copy delivered to the Fiscal Agent to have attached
thereto the ballots voted at the meeting. Any record so signed
and verified shall be conclusive evidence of the matters therein
stated.
11. Non-business Days.
In any case where the date of maturity of the principal
of, premium, if any, or interest on (or Additional Amounts, if
any) the Securities or the date fixed for redemption of any
Security shall be at any place of payment a Saturday, Sunday, a
legal holiday or a day on which banking institutions are
authorized or obligated by law to close, then payment of
principal or interest (or Additional Amounts, if any) need not be
made on such date at such place but may be made on the next
succeeding day at such place of payment which is not a Saturday,
Sunday, a legal holiday or a day on which banking institutions
are authorized or obligated by law to close, with the same force
and effect as if made on the date of maturity or the date fixed
for redemption, and no interest shall accrue for the period after
such date.
12. Fiscal and Paying Agent.
(a) In acting under the Fiscal Agency Agreement and in
connection with the Securities, the Fiscal Agent is acting solely
A-33PAGE
<PAGE>
as agent of the Company and does not assume any obligation
towards or relationship of agency or trust for or with the owner
or holder of this Security or any interest coupon appertaining
hereto, except that any funds held by the Fiscal Agent for
payment on this Security shall be held in trust by it and applied
as set forth herein, but need not be segregated from other funds
held by it, except as required by law. For a description of the
duties and the immunities and rights of the Fiscal Agent under
the Fiscal Agency Agreement, reference is made to the Fiscal
Agency Agreement, and the obligations of the Fiscal Agent to the
holder hereof are subject to such immunities and rights.
(b) Any monies paid by the Company to any paying
agency for payment of principal of or interest on any Security
(including Additional Amounts, if any, in respect thereof) and
remaining unclaimed for two years after such payment has been
made shall be repaid to the Company and to the extent permitted
by law the holder of any Security shall thereafter look only to
the Company for any payment thereof as a general unsecured
obligation thereof and all liability of the Fiscal Agent with
respect thereto shall cease.
(c) No reference herein to the Fiscal Agency Agreement
and no provision of this Security or of the Fiscal Agency
Agreement shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest (including Additional Amounts, as
described above) on this Security at the times, places and rate,
and in the coin or currency, herein prescribed or to convert or
redeem (at the request of a holder) this Security as provided
herein or in the Fiscal Agency Agreement.
Title to Bearer Securities and coupons shall pass by
delivery. As provided in the Fiscal Agency Agreement and subject
to certain limitations therein set forth, the transfer of
Registered Securities is registrable on the Security Register
upon surrender of a Registered Security for registration of
transfer at the office or agency of the Company in the City of
New York, or, subject to applicable laws and regulations, at the
offices of the paying agency in Luxembourg, duly endorsed by, or
accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
executed by, the holder thereof or his attorney duly authorized
in writing, and thereupon one or more new Registered Securities,
of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or
transferees.
13. Notices.
All notices to the holders of Securities will be
published in an Authorized Newspaper (as defined in the Fiscal
Agency Agreement) in New York City and in London, and, as long as
the Securities are listed on the Luxembourg Stock Exchange, in
A-34PAGE
<PAGE>
Luxembourg. It is expected that publication in New York City
will be made in The Wall Street Journal (Eastern edition), in
London in the Financial Times and in Luxembourg in the
Luxemburger Wort. Notices shall be deemed to have been given on
the date of publication as aforesaid or, if published on
different dates, on the date of the first such publication.
Notices will be mailed to registered holders of Registered
Securities at their registered addresses as the same shall appear
on the books of the Fiscal Agent.
14. Governing Law.
(a) The Fiscal Agency Agreement, the Securities and
any coupons appertaining thereto shall be governed by and
construed in accordance with the laws of the Commonwealth of
Massachusetts.
(b) The Company has appointed Chemical Bank, 55 Water
Street, New York, New York 10041 (Attention: Corporate Trust
Department), as its agent upon whom process may be served in any
such suit, action or proceeding, with a copy to the Company at 81
Wyman Street, P.O. Box 9046, Waltham, Massachusetts 02254-9046
(Attention: Secretary) with a copy to the General Counsel.
15. Authentication.
This Security and any coupon appertaining thereto shall
not become valid or obligatory for any purpose until the
certificate of authentication hereon shall have been duly signed
by the Fiscal Agent acting under the Fiscal Agency Agreement.
16. Warranty of the Issuer.
Subject to Section 15 hereof, the Company hereby
certifies and warrants that all acts, conditions and things
required to be done and performed and to have happened precedent
to the creation and issuance of this Security and any coupons
appertaining thereto, and to constitute the same legal, valid and
binding obligations of the Company enforceable in accordance with
their terms, have been done and performed and have happened in
due and strict compliance with all applicable laws.
17. Accounting Terms.
All accounting terms not otherwise defined herein shall
have the meanings assigned to them in accordance with generally
accepted accounting principles as applied in the United States.
18. Descriptive Headings.
The descriptive headings appearing in these Terms and
Conditions are for convenience of reference only and shall not
alter, limit or define the provisions hereof.
A-35PAGE
<PAGE>
TRANSFER NOTICE
Only if a Registered Security or Common Stock issued upon
conversion of any Security (if no registration statement covering
such Common Stock is effective):
FOR VALUE RECEIVED, the undersigned Holder hereby
sell(s), assign(s) and transfer(s) unto__________________________
_________________________________________________________________
whose taxpayer identification number is _________ and whose
address including postal/zip code is ____________________________
_________________________________________________________________
the within Security and all rights thereunder, hereby irrevocably
constituting and appointing _____________________________________
attorney-in-fact to transfer said Security on the books of the
Fiscal Agent with full power of substitution in the premises.
In connection with the transfer of this Security, the
undersigned Holder certifies that:
[Check one]
[ ] (a) This Security is being transferred
to a "qualified institutional buyer" (as
defined in Rule 144A under the
Securities Act of 1933) in compliance
with the exemption from registration
under the Securities Act of 1933
provided by Rule 144A.
[ ] (b) This Security is being transferred
in an Offshore Transaction (as defined
in Regulation S under the Securities Act
of 1933) in compliance with the
exemption from registration under the
Securities Act of 1933 provided by
Regulation S.
[ ] (c) This Security is being transferred
to a sophisticated institutional
investor which is an "accredited
investor" (within the meaning of Rule
501(a)(1), (2), (3) or (7) under the
Securities Act of 1933) in a transaction
not involving any general solicitation
or advertising.
Dated: _______________ Name: _____________________________
By: ________________________________
Title: ______________________________
A-36PAGE
<PAGE>
NOTICE: The signature of the Holder to
this assignment must correspond with the
name as written upon the face of the
within instrument in every particular,
without enlargement or any change
whatsoever.
SIGNATURE GUARANTEED
______________________________________
TO BE COMPLETED BY A BROKER OR DEALER IF (c) ABOVE IS CHECKED:
The undersigned represents and warrants that (i) it is a
broker or dealer registered under Section 15 of the Securities
Exchange Act of 1934, (ii) each person which will become a
beneficial owner of this Security upon transfer is a
sophisticated institutional investor which is an "accredited
investor" (within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act of 1933); (iii) no general solicitation
or advertising was made or used by it in connection with the
offer and sale of this Security to such person(s); and (iv) each
such person has been notified that this Security has not been
registered under the Securities Act of 1933 and is subject to the
restrictions on transfer of the Security set forth herein and in
the Fiscal Agency Agreement.
Dated: ____________________ __________________________
By: ______________________
IF NONE OF THE FOREGOING BOXES IS CHECKED, THE FISCAL AGENT
SHALL NOT BE OBLIGATED TO REGISTER THE TRANSFER OF THIS SECURITY
UNLESS AND UNTIL THE CONDITIONS TO ANY SUCH TRANSFER OF
REGISTRATION SET FORTH HEREIN, ON THE FACE HEREOF AND IN THE
FISCAL AGENCY AGREEMENT SHALL HAVE BEEN SATISFIED.
A-37PAGE
<PAGE>
CONVERSION NOTICE
If Bearer Security of denomination U.S. $1,000:
The undersigned holder of this Security hereby irrevocably
exercises the option to convert this Security into shares of
Common Stock of Thermo Electron Corporation in accordance with
the terms of this Security and directs that such shares be
registered in the name of and delivered, together with a check in
payment for any fractional share and accrued interest from the
immediately preceding interest payment date, to the undersigned
unless a different name has been indicated below. If shares are
to be registered in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.
Dated: _________, ____
______________________________
Signature
[MUST BE GUARANTEED]
If shares are to be registered in the
name of and delivered to a person
other than the holder, please print
such person's name and address:
__________________________________
__________________________________
__________________________________
HOLDER
Please print name and
address of holder:
_____________________________
_____________________________
_____________________________
A-38PAGE
<PAGE>
CONVERSION NOTICE
If Registered Security or Bearer Security of denomination U.S.
$10,000:
The undersigned holder of this Security hereby irrevocably
exercises the option to convert this Security, or portion hereof
(which is U.S. $1,000 or an integral multiple thereof) below
designated, into shares of Common Stock of Thermo Electron
Corporation in accordance with the terms of this Security, and
directs that such shares, together with a check in payment for
any fractional share and accrued interest from the immediately
preceding interest payment date (except interest payable to the
holder of record on an interest record date) and any Securities
representing any unconverted principal amount hereof, be
delivered to and be registered (if a Registered Security) in the
name of the undersigned unless a different name has been
indicated below. If shares or Securities are to be registered in
the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto.
Dated: ___________, ____
______________________________
Signature
[MUST BE GUARANTEED]
If shares or Securities are to If only a portion of the
be registered in the name of a Securities is to be
Person other than the holder, converted, please
please print such person's indicate:
name and address:
1. Principal Amount to be
converted: U.S. $________
______________________________
2. Kind, amount and
______________________________ denomination of
Securities
______________________________ representing unconverted
pal amount to be issued:
______________________________
Bearer-U.S. $____________
Denominations: U.S. $____
(U.S. $1,000 or $10,000)
Registered-U.S. $________
Denominations: U.S. $____
(U.S. $1,000 or an
integral multiple
thereof)
A-39PAGE
<PAGE>
Registered Securities are
not exchangeable for Bearer
Securities.
A-40PAGE
<PAGE>
REDEMPTION NOTICE
UNDER SECTION 3(d)
If Bearer Security of denomination U.S. $1,000:
The undersigned holder of this Security hereby requests and
instructs the Company to redeem this Security in accordance with
the terms of Section 3(d) of this Security and directs that a
check in payment of the redemption amount be delivered to the
undersigned unless a different name has been indicated below.
The undersigned understands that this request can be revoked by
delivering written notice to the Paying Agent on or before the
Holder Redemption Date, together with the undersigned's
non-transferable receipt for such security.
Dated: _________, ____
______________________________
Signature
[MUST BE GUARANTEED]
If a check in payment of the
redemption amount is to be
delivered to a person other
than the holder, please print such
person's name and address:
__________________________________
__________________________________
__________________________________
HOLDER
Please print name and
address of holder:
_____________________________
_____________________________
_____________________________
A-41PAGE
<PAGE>
REDEMPTION NOTICE
UNDER SECTION 3(d)
If Registered Security or Bearer Security of denomination U.S.
$10,000:
The undersigned holder of this Security hereby requests and
instructs the Company to redeem this Security or portion hereof
(which is U.S. $1,000 or an integral multiple thereof) in
accordance with the terms of Section 3(d) of this Security, and
directs that a check in payment of the redemption amount be
delivered to, and any Securities representing any unredeemed
principal amount hereof be delivered to and be registered in the
name of, the undersigned unless a different name has been
indicated below. If Securities are to be registered in the name
of a person other than the undersigned, the undersigned will pay
all transfer taxes payable with respect thereto. The undersigned
understands that this request can be revoked by delivering
written notice to the Paying Agent on or before the Holder
Redemption Date, together with the undersigned's non-transferable
receipt for such Security.
Dated: ___________, ____
______________________________
Signature
[MUST BE GUARANTEED]
If Securities are to If only a portion of the
be registered in the name of, or Securities is to be a
check in payment of the redeemed, please
redemption amount is to be indicate:
delivered to, a
Person other than the holder, 1. Principal Amount to
please print such person's be redeemed:
name and address: U.S. $___________
2. Kind, amount and
______________________________ denomination of
Securities
______________________________ representing
unredeemed principal
______________________________ amount to be
issued:
______________________________
Bearer-U.S. $____________
Denominations: U.S. $____
(U.S. $1,000 or $10,000)
Registered-U.S. $________
A-42PAGE
<PAGE>
Denominations: U.S. $____
(U.S. $1,000 or an
integral multiple
thereof)
Registered Securities are
not exchangeable for
Bearer Securities.
A-43PAGE
<PAGE>
REDEMPTION NOTICE
UNDER SECTION 3(e)
If Bearer Security of denomination U.S. $1,000:
The undersigned holder of this Security hereby requests and
instructs the Company to redeem this Security in accordance with
the terms of Section 3(e) of this Security and directs that a
check in payment of the redemption amount be delivered to the
undersigned unless a different name has been indicated below.
The undersigned understands that this request can not be revoked
unless the Company fails to provide for payment of the redemption
amount on the Repurchase Date.
Dated: _________, ____
______________________________
Signature
[MUST BE GUARANTEED]
If a check in payment of the redemption
amount is to be delivered to a person
other than the holder, please print
such person's name and address:
__________________________________
__________________________________
__________________________________
HOLDER
Please print name and
address of holder:
_____________________________
_____________________________
_____________________________
A-44PAGE
<PAGE>
REDEMPTION NOTICE
UNDER SECTION 3(e)
If Registered Security or Bearer Security of denomination U.S.
$10,000:
The undersigned holder of this Security hereby requests and
instructs the Company to redeem this Security or portion hereof
(which is U.S. $1,000 or an integral multiple thereof) in
accordance with the terms of Section 3(e) of this Security, and
directs that a check in payment of the redemption amount be
delivered to, and any Securities representing any unredeemed
principal amount hereof be delivered to and be registered in the
name of, the undersigned unless a different name has been
indicated below. If Securities are to be registered in the name
of a person other than the undersigned, the undersigned will pay
all transfer taxes payable with respect thereto. The undersigned
understands that this request can not be revoked unless the
Company fails to provide for payment of the redemption amount on
the Repurchase Date.
Dated: ___________, ____
______________________________
Signature
[MUST BE GUARANTEED]
If Securities are to If only a portion of the
be registered in the name of, Securities is to be or a
check in payment of the redeemed, please
redemption amount is to be indicate:
delivered to, a Person other
than the holder, please print 1. Principal Amount to
such person's name and address: be redeemed:
U.S. $________
2. Kind, amount and
denomination
______________________________ of Securities
representing
______________________________ unredeemed
principal amount
______________________________ to be issued:
Bearer-U.S. $___________
Denominations: U.S. $____
U.S. $1,000 or $10,000)
Registered-U.S. $________
A-45PAGE
<PAGE>
Denominations: U.S. $____
(U.S. $1,000 or an
integral multiple
thereof)
Registered Securities are
not exchangeable for Bearer
Securities.
PAGE
<PAGE>
EXHIBIT B
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
NEITHER THIS SECURITY NOR ANY PORTION HEREOF MAY BE OFFERED OR
SOLD DIRECTLY OR INDIRECTLY IN THE UNITED STATES OF AMERICA, ITS
TERRITORIES OR POSSESSIONS ("UNITED STATES") OR TO CITIZENS,
NATIONALS OR RESIDENTS THEREOF OR TO ANY CORPORATION, PARTNERSHIP
OR OTHER PERSON OR ENTITY DEEMED A U.S. PERSON UNDER REGULATION S
UNDER THE SECURITIES ACT ("UNITED STATES PERSONS"), OTHER THAN
ANY PORTION OF THIS SECURITY SOLD, SUBJECT TO CERTAIN
RESTRICTIONS, PURSUANT TO RULE 144A OR OTHER APPLICABLE EXEMPTION
UNDER THE SECURITIES ACT.
ANY UNITED STATES PERSON WHO HOLDS THIS SECURITY WILL BE SUBJECT
TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING
THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE
UNITED STATES INTERNAL REVENUE CODE.
THERMO ELECTRON CORPORATION
(Incorporated in the State of Delaware)
5% SENIOR CONVERTIBLE DEBENTURES DUE 2001
TEMPORARY GLOBAL DEBENTURE
THERMO ELECTRON CORPORATION, a corporation duly incorporated
and existing under the laws of the State of Delaware (the
"Company"), for value received, hereby promises to pay to bearer
upon presentation and surrender of this Global Security the
principal sum of ____________ United States Dollars on April 15,
2001 and to pay interest thereon, from the date hereof,
semiannually in arrears on April 15 and October 15 in each year,
commencing October 15, 1994, at the rate of 5% per annum, until
the principal hereof is paid or made available for payment,
provided, however, that interest on this Global Security shall be
payable only after the issuance of the definitive Securities for
which this Global Security is exchangeable and, in the case of
definitive Securities in bearer form, only upon presentation and
surrender of the interest coupons thereto attached as they
severally mature.
This Global Security is one of a duly authorized issue of
Securities of the Company designated as specified in the title
hereof (the "Securities"). This Global Security and the
definitive Securities for which it is exchangeable, as described
below, are entitled to the benefits of a Fiscal Agency Agreement
of even date herewith (the "Fiscal Agency Agreement") between the
B-1PAGE
<PAGE>
Company and Chemical Bank, as fiscal agent, paying agent and
conversion agent (the "Fiscal Agent"). It is a temporary
security and is exchangeable in whole or from time to time in
part without charge upon request of the holder hereof for
definitive Securities in bearer form, with interest coupons
attached, (a) not earlier than the day following the expiration
of the 40-day period that begins on the date hereof and (b) as
promptly as practicable following presentation of certification,
in the form set forth as Exhibits C and D of the Fiscal Agency
Agreement for such purpose, that the beneficial owner or owners
of this Global Security (or, if such exchange is only for a part
of this Global Security, of such part) are not United States
Persons. Upon any exchange of a part of this Global Security for
definitive Securities, the portion of the principal amount hereof
so exchanged shall be endorsed by the Fiscal Agent on the
Schedule of Exchanges hereto, and the principal amount hereof
shall be reduced for all purposes by the amount so exchanged.
Until exchanged in full for definitive Securities, this
Global Security shall in all respects be entitled to the same
benefits under, and subject to the same terms and conditions of,
the Fiscal Agency Agreement as definitive Securities
authenticated and delivered thereunder, except that neither the
holder hereof nor the beneficial owners of this Global Security
shall be entitled to receive payment of interest hereon, except
as provided above, or to convert this Global Security into Common
Stock of the Company or any other security, cash or other
property.
This Global Security shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
All terms used in this Global Security which are defined in
the Fiscal Agency Agreement shall have the meanings assigned to
them in the Fiscal Agency Agreement.
Unless the certificate of authentication hereon has been
executed by an authorized officer of the Fiscal Agent, this
Global Security shall not be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Global
Security to be duly executed in its corporate name by its duly
authorized officer.
Dated as of
THERMO ELECTRON CORPORATION
By:___________________________
[Title]
B-2PAGE
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is the Global Security described in the
within-mentioned Fiscal Agency Agreement.
CHEMICAL BANK, as Fiscal Agent
By:___________________________
Authorized Officer
B-3PAGE
<PAGE>
SCHEDULE OF EXCHANGES
Remaining
principal
Principal amount
amount exchanged following Notation made
Date for definitive such on behalf of
made Securities exchange the Fiscal Agent
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
_______ _______________ _____________ ________________
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AA941240017
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<PAGE>
EXHIBIT C
Form of Certificate to be Given by
the Euroclear Operator and CEDEL S.A.
CERTIFICATION
THERMO ELECTRON CORPORATION
U.S. $___________
5% Senior Convertible Debentures
due April 15, 2001
(the "Securities")
This is to certify that, based on certificates we have
received in writing, by tested telex or by electronic
transmission from our member organizations appearing in our
records as persons being entitled to a portion of the principal
amount set forth below, substantially in the form set out in the
Fiscal Agency Agreement relating to the above-captioned
Securities, as of the date hereof, U.S. $______ principal amount
of the above-captioned Securities (i) are owned by a person that
is not a citizen or resident of the United States, a domestic
partnership, a domestic corporation or any estate or trust the
income of which is subject to United States federal income
taxation regardless of its source (a "United States Person"),
(ii) are owned by a United States Person that is (a) the foreign
branch of a United States financial institution (as defined in
United States Treasury Regulations Section 1.165-12(c)(1)(v)) (a
"financial institution") purchasing for its own account or for
resale, or (b) a United States Person who acquired the Securities
through the foreign branch of a United States financial
institution and who holds the Securities through such financial
institution on the date hereof (and in the case of either clause
(a) or (b), the financial institution has agreed for your benefit
to comply with the requirements of Section 163(j)(3)(A), (B) or
(C) of the United States Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) are owned by a
financial institution for purposes of resale during the
restricted period (as defined in United States Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)). Financial
institutions described in clause (iii) of the preceding sentence
(whether or not also described in clause (i) or (ii)) have
certified that they have not acquired the Securities for purposes
of resale directly or indirectly to a United States Person or to
a person within the United States or its possessions.
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<PAGE>
In addition, based on such certificates, none of such
principal amount constitutes an unsold allotment or subscription
of a distributor (as defined in United States Treasury
Regulations Section 1.163-5(c)(2)(i)(D)).
As used in this Certificate, "United States" means the
United States of America (including the States and the District
of Columbia); and its "possessions" include Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
We further certify that, as of the date hereof, (i) we are
not making available herewith for exchange any portion of the
Temporary Global Security excepted in such certifications and
(ii) we have not received any notification from any of our member
organizations to the effect that the statements made by such
member organizations with respect to any portion of the part
submitted herewith for exchange are no longer true and cannot be
relied upon as of the date hereof.
We understand that this certificate is required in
connection with certain tax laws of the United States. In
connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certificate
is or would be relevant, we irrevocably authorize you to produce
this certificate to any interested party in such proceedings.
Dated: ___________, 1994*
Yours faithfully,
[MORGAN GUARANTY TRUST COMPANY
OF NEW YORK (Brussels Office),
as Operator of the Euroclear
System]**
[CEDEL S.A.]**
By: ______________________
__________
* To be dated no earlier than the date which is 40 days after
the closing of the sale of the Debentures.
** Delete as appropriate.
AA941240014
C-2PAGE
<PAGE>
EXHIBIT D
Form of Certificate of Beneficial Ownership
for Bearer Securities to be Provided to the
Euroclear Operator or to CEDEL S.A.
CERTIFICATION
THERMO ELECTRON CORPORATION
U.S. $__________
5% Senior Convertible Debentures
due April 15, 2001
(the "Securities")
This is to certify that as of the date hereof and except as
provided in the fourth paragraph hereof, the above-captioned
Securities held by you for our account:
(a) (i) are owned by a person that is not a citizen
or a resident, a domestic partnership, a domestic corporation or
any estate or trust the income of which is subject to United
States federal income taxation regardless of its source (a
"United States Person"), or
(ii) are owned by a United States Person that
is (A) the foreign branch of a United States financial
institution (as defined in United States Treasury Regulations
Section 1.165-12(c)(1)(v)) (a "financial institution") purchasing
for its own account or for resale, or (B) a United States Person
who acquired the Securities through the foreign branch of a
United States financial institution and who holds the Securities
through such financial institution on the date hereof (and in the
case of either clause (A) or (B), the financial institution
hereby agrees for the benefit of the Company to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the United
States Internal Revenue Code of 1986, as amended, and the
regulations thereunder), or
(iii) are owned by a financial institution for
purposes of resale during the restricted period (as defined in
United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)).
In addition, financial institutions described in clause
(iii) of the preceding sentence (whether or not also described in
clause (i) or (ii)) certify that they have not acquired the
Securities for purposes of resale directly or indirectly to a
D-1PAGE
<PAGE>
United States Person or to a person within the United States or
its possessions.
(b) Do not constitute part of an unsold allotment or
subscription of a distributor (as defined in United States
Treasury Regulations Section 1.163-5(c)(2)(i)(D)).
As used in this Certificate, "United States" means the
United States of America (including the States and the District
of Columbia), and its "possessions" include Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
We undertake to advise you by telex if the above statement
as to beneficial ownership is not correct on any date of exchange
by us of a portion of the Temporary Global Bearer Security for
definitive Securities as to all of the above-captioned Securities
then appearing in your books as being held for our account.
This certificate excepts and does not relate to U.S. $____
principal amount of the above-captioned Securities appearing on
your books as being held for our account as to which we are not
yet able to certify and as to which we understand that exchange
and delivery of definitive Securities cannot be made until we are
able so to certify.
We understand that this certificate is required in
connection with certain tax regulations in the United States. If
administrative or legal proceedings are commenced or threatened
in connection with which this certificate is or would be
relevant, we irrevocably authorized you to produce this
certificate or a copy hereof to any interested party in such
proceedings.
Date: ___________, 1994*
[NAME]
By: ________________________
Signature
As, or as agent for, the
beneficial owner(s) of
the Securities to which
this certificate relates.
__________
* Not earlier than 15 days prior to the date which is 40 days
after the closing date of the sale of the Securities.
AA941240029
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EXHIBIT E
Form of Certificate of Beneficial
Ownership for Registered
Securities to be Provided to
the Euroclear Operator or
to CEDEL S.A.
Please issue $___________ of the U.S. $___________ 5%
Senior Convertible Debentures due April 15, 2001 (the
"Securities") of Thermo Electron Corporation held by you for our
account in registered form. We hereby certify to you that we are
not a U.S. person as defined in Regulation S under the United
States Securities Act of 1933, as amended. The exact name of the
beneficial holder that the Securities are to be registered in is
as follows:
This certificate does not constitute such certification on
Form W-8 or its equivalent as may be necessary to avoid
imposition of withholding and/or back-up withholding under U.S.
federal tax law with respect to any payments of interest on the
Securities.
We irrevocably authorize you to produce this certificate or
a copy hereof to any interested party in any administrative or
legal proceedings with respect to the matters covered by this
certificate.
[NAME]
Date: ___________, 1994*
By: _______________________
Signature
[to be completed by the account
holder as, or as agent for, the
beneficial owner(s) of the
Securities to which this
certificate relates.]
____________
* To be dated not earlier than the Closing Date.
AA941240030
E-1<PAGE>
Exhibit 11
THERMO ELECTRON CORPORATION
Computation of Earnings per Share
Three Months Ended
-----------------------
April 2, April 3,
1994 1993
----------- -----------
Computation of Fully Diluted Earnings per
Share:
Income:
Net income $22,541,000 $15,448,000
Add: Convertible debenture interest, net
of tax 2,460,000 2,576,000
----------- -----------
Income applicable to common stock assuming
full dilution (a) $25,001,000 $18,024,000
----------- -----------
Shares:
Weighted average shares outstanding 47,958,594 40,579,578
Add: Shares issuable from assumed exercise
of convertible debentures 10,970,407 11,288,754
Shares issuable from assumed exercise
of options (as determined by the
application of the treasury stock
method) 391,103 461,466
----------- -----------
Weighted average shares outstanding, as
adjusted (b) 59,320,104 52,329,798
----------- -----------
Fully Diluted Earnings per Share (a) / (b) $ .42 $ .34
=========== ===========
