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Under
The Securities Act of 1933
Delaware | 65-0949535 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification Number) |
Miami, Florida 33131
(305) 579-8000
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Executive Vice President
Vector Group Ltd.
100 S.E. Second Street
Miami, Florida 33131
(305) 579-8000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Mark J. Mihanovic, Esq.
McDermott Will & Emery LLP
2049 Century Park East, 34th Floor
Los Angeles, California 90067
(310) 277-4110
box.þ
Proposed | ||||||||||||||
Title of Each Class | Maximum Offering | Amount of | ||||||||||||
of Securities to | Amount to be | Price | Aggregate Offering | Registration | ||||||||||
be Registered | Registered | Per Security | Price | Fee | ||||||||||
$110,000,000 3 7/8% Variable Interest Senior Convertible Debentures due June 15, 2026 | $110,000,000(1) | 100%(2) | $110,000,000(1) | $11,770(5) | ||||||||||
Common Stock, $.10 par value | 5,371,094(3) | — | — | —(4) | ||||||||||
(1) | Represents the aggregate principal amount of the debentures issued by the Registrant. | |
(2) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933 and exclusive of accrued interest and distributions, if any. | |
(3) | Represents 5,371,094 shares of common stock issuable upon conversion of the debentures at the conversion price of $20.48 per share of common stock. Pursuant to Rule 416 under the Securities Act, such number of shares of common stock registered hereby shall include an indeterminate number of shares of common stock that may be issued in connection with a stock split, stock dividend, recapitalization or similar event. | |
(4) | Pursuant to Rule 457(i), no additional filing fee is payable with respect to the shares of common stock issuable upon conversion of the debentures because no additional consideration will be received in connection with the exercise of the conversion privilege. | |
(5) | Previously paid on September 1, 2006. |
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The information in this prospectus is not complete and may be changed. The holders may not sell these securities until the registration statement relating to these securities that has been filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
and the common stock issuable upon conversion of the Debentures
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EX-12 Ratio of Earnings to Fixed Charges | ||||||||
EX-23.1 Consent of PricewaterhouseCoopers LLP | ||||||||
EX-23.2 Consent of PricewaterhouseCoopers LLP | ||||||||
EX-23.3 Consent of Weiser LLP |
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• | Our Annual Report on Form 10-K for the fiscal year ended December 31, 2005, filed with the SEC on March 17, 2006 (as amended by Form 10-K/A, filed with the SEC on November 24, 2006); | ||
• | Our Quarterly Reports on Form 10-Q for the quarter ended September 30, 2006, filed with the SEC on November 14, 2006; for the quarter ended March 31, 2006, filed with the SEC on May 10, 2006 (as amended by Form 10-Q/A, filed with the SEC on November 22, 2006); and for the quarter ended June 30, 2006, filed with the SEC on August 9, 2006 (as amended by Form 10-Q/A, filed with the SEC on November 22, 2006); | ||
• | Our Current Reports on Form 8-K, filed with the SEC on January 3, 2006, January 27, 2006, February 6, 2006, March 6, 2006, April 3, 2006, June 8, 2006, June 27, 2006, June 30, 2006, July 13, 2006 (as amended by Form 8-K/A, filed with the SEC on November 27, 2006), July 17, 2006, July 24, 2006, October 19, 2006 (as amended by Form 8-K/A, filed with the SEC on November 27, 2006), November 13, 2006, and November 22, 2006, (On June 27, 2006, we filed with the SEC a Current Report on Form 8-K, which contained revised items 6, 7 and 8 of our amended Annual Report on Form 10-K, where appropriate, to reflect the retrospective application of a new accounting standard that we were required to adopt as of January 1, 2006. All of the preceding references in this paragraph to our amended Annual Report on Form 10-K are intended to refer to such amended Form 10-K, as so revised by the Form 8-K. Please see the Form 8-K for a detailed discussion of the policy change. The Form 8-K filed on June 27, 2006 was amended by Form 8-K/A, filed with the SEC on November 28, 2006.); and | ||
• | The description of our common stock set forth in our prospectus dated June 3, 2005 filed on Form 424B3 on June 3, 2005. |
Attention: Investor Relations
100 S.E. Second Street
32nd Floor
Miami, Florida 33131
(305) 579-8000
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• | economic outlook; | ||
• | capital expenditures; | ||
• | cost reduction; | ||
• | new legislation; | ||
• | cash flows; | ||
• | operating performance; | ||
• | litigation; | ||
• | impairment charges and cost savings associated with restructurings of our tobacco operations; and | ||
• | related industry developments (including trends affecting our business, financial condition and results of operations). |
• | general economic and market conditions and any changes therein, due to acts of war and terrorism or otherwise; | ||
• | governmental regulation and policies; | ||
• | effects of industry competition; | ||
• | impact of business combinations, including acquisitions and divestitures, both internally for us and externally in the tobacco industry; | ||
• | impact of restructurings on our tobacco business and our ability to achieve any increases in profitability estimated to occur as a result of these restructurings; | ||
• | impact of new legislation on our competitors’ payment obligations, results of operations and product costs, i.e., the impact of recent federal legislation eliminating the federal tobacco quota system; | ||
• | uncertainty related to litigation and potential additional payment obligations for us under the Master Settlement Agreement and other settlement agreements with the states; and | ||
• | risks inherent in our new product development initiatives. |
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Issuer | Vector Group Ltd. | |||
Securities Offered | $110,000,000 in aggregate principal amount of 3 7/8% Variable Interest Senior Convertible Debentures due 2026. This prospectus also relates to shares of our common stock issuable upon conversion of the debentures. | |||
Maturity | June 15, 2026. | |||
Interest | Annual Rate: 3 7/8%, with an additional amount of interest payable on each interest payment date based on the amount of cash dividends per share paid by us on our common stock during the prior three-month period ending on the record date for such interest payment multiplied by the total number of shares of our common stock into which the debentures are convertible on such record date (together, the “Total Interest”). Notwithstanding the foregoing, however, the interest payable on each interest payment date shall be the higher of (i) the Total Interest and (ii) 5 3/4% per year. Payment Frequency: Every quarter on March 15, June 15, September 15 and December 15. First Payment: September 15, 2006. | |||
Optional Redemption | We may not redeem any debentures before June 15, 2012. Beginning on June 15, 2012, we may redeem some or all of the debentures at any time or from time to time. We will give not less than 30 nor more than 60 days notice of any redemption. Upon any redemption, we will pay a redemption price equal to 100% of the principal amount of the debentures to be redeemed, plus accrued and unpaid interest, and registration default payments, if any, up to, but excluding, the redemption date. | |||
Conversion Rights | The debentures are convertible at the holders’ option at any time following the date of issuance until the maturity date, unless previously redeemed or repurchased pursuant to their terms, into our common stock at a conversion price of $20.48 per share of common stock, subject to adjustment for various events. The conversion ratio is 48.828 shares of common stock per $1,000 principal amount of debentures. | |||
Mandatory Redemption | We must redeem 10.0% of the total aggregate principal amount of the debentures outstanding on June 15, 2011. We will also redeem on June 15, 2011 and at the end of |
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each interest accrual period thereafter, such amounts on a pro-rata basis, if any, of the debentures necessary to prevent the debentures from being treated as an “Applicable High Yield Discount Obligation” within the meaning of section 163(i)(l) of the Internal Revenue Code of 1986, as amended. You may require us to repurchase all or any portion of your debentures for cash on June 15, 2012, June 15, 2016 and June 15, 2021, at a repurchase price equal to 100% of their principal amount plus accrued and unpaid interest, and registration default payments, if any, up to but excluding the repurchase date. See “Description of Debentures — Mandatory Redemption and Repurchase at the Option of the Holders.” | ||||
Repurchase at Option of the Holders Upon a Fundamental Change | If a fundamental change (as defined in “Description of Debentures — Repurchase of Debentures at the Option of the Holders Upon a Fundamental Change”) occurs, subject to certain conditions and restrictions, we will be required to repurchase the debentures, at the option of the holders thereof, at 100% of their principal amount, plus accrued and unpaid interest, if any, plus, under certain circumstances, the “make-whole premium” described in this prospectus in cash and/or common stock to holders of debentures who require us to repurchase their debentures in connection with such repurchase event. | |||
Ranking | The debentures are our senior unsecured obligations and rank on a parity in right of payment with all of our existing and future senior unsecured indebtedness. The debentures will effectively rank junior to any future secured indebtedness we may incur and junior to liabilities of our subsidiaries. As of September 30, 2006, these debentures would have been effectively junior to approximately $75.6 million of indebtedness of our subsidiaries. | |||
Use of Proceeds | We will not receive any of the proceeds from the resale by the selling securityholders of the debentures or the common stock issuable upon conversion of the debentures. | |||
Events of Default | The following will be events of default under the indenture governing the debentures: | |||
• | we fail to deliver within 30 business days the required number of shares of common stock issuable upon conversion, | |||
• | we fail for 30 business days to reserve shares of common stock issuable upon conversion, | |||
• | we fail to pay interest or registration default payments when due and that failure continues for five days, | |||
• | we fail to pay the principal and any premium on the debentures when due, |
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• | we fail to perform any other covenant in the indenture or the debentures and that failure continues for 60 days after notice to us by the trustee or the holders of a least 25% in aggregate principal amount of the outstanding debentures, | |||
• | subject to certain exceptions, we fail to pay when due the principal of, or interest on, any indebtedness for money borrowed by us or any of our subsidiaries in excess of $10.0 million if such indebtedness has been accelerated and such acceleration is not annulled within 30 days after written notice to us by the trustee or the holders of at least 25% in the aggregate principal amount of the outstanding debentures, | |||
• | final unsatisfied judgments not covered by insurance aggregating in excess of $10.0 million, at any one time, are rendered against us or any significant subsidiary and are not stayed, bonded or discharged within 60 days, and | |||
• | certain events of bankruptcy, insolvency or reorganization with respect to us or any of our significant subsidiaries specified in the indenture. | |||
See “Description of Debentures — Events of Default and Remedies.” | ||||
Registration Rights | Pursuant to a registration rights agreement, we have filed with the SEC a shelf registration statement, of which this prospectus is a part, with respect to the debentures and the common stock issuable upon conversion of the debentures. See “Description of Debentures — Registration Rights.” | |||
Trading Market | The debentures are a new issue of securities with no established trading market. We do not intend to list the debentures on any securities exchange or automated quotation system. We expect the debentures to be eligible for trading in the PORTAL Market of the NASD, Inc. Our common stock trades on the New York Stock Exchange under the symbol “VGR”. | |||
Certain United States Federal Income Tax Consequences | We and each holder of the debentures agree in the indenture, for United States federal income tax purposes, to treat the debentures as “contingent payment debt instruments” and to be bound by our application of the |
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U.S. Treasury regulations that govern contingent payment debt instruments, including our determination that the rate at which interest will be deemed to accrue for United States federal income tax purposes will be 10.75% compounded quarter-annually, which is the rate comparable to the rate at which we would borrow on a non-contingent, non-convertible borrowing with terms and conditions otherwise comparable to the debentures. Accordingly, each holder will be required to accrue interest on a constant yield to maturity basis at that rate (subject to certain adjustments), with the result that a U.S. holder (as defined below under “Certain United States Federal Income Tax Consequences”) may recognize taxable income significantly in excess of cash received while the debentures are outstanding. In addition, a U.S. holder will recognize ordinary income upon a sale, exchange, conversion, redemption or repurchase of the debenture at a gain. In computing such gain, the amount realized by a U.S. holder will include, in the case of a conversion, the amount of cash and the fair market value of shares received. However, the proper United States federal income tax treatment of a holder of a debenture is uncertain in various respects. If the agreed upon treatment was successfully challenged by the Internal Revenue Service, it might be determined that, among other differences, a holder should have accrued interest income at a lower rate, should not have recognized income or gain upon the conversion, and should not have recognized ordinary income upon a taxable disposition of its debentures. See “Certain United States Federal Income Tax Consequences.” | ||||
We intend to take the position that payments of contingent interest to non-U.S. holders will not be exempt from the 30% U.S. withholding tax and, therefore, we intend to withhold on such payments of contingent interest at a rate of 30% unless such holder is eligible for a reduced rate or an exemption under an applicable U.S. income tax treaty or such interest is effectively connected with the holder’s conduct of a U.S. trade or business. Payments of noncontingent interest and cash or common stock delivered upon the conversion, redemption, or retirement of a debenture will generally not be subject to such withholding if certain conditions are satisfied by the holder, as explained in detail below under “Certain United States Federal Income Tax Consequences.” | ||||
HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE TAX TREATMENT OF THE DEBENTURES AND WHETHER A PURCHASE OF THE DEBENTURES IS ADVISABLE IN LIGHT OF THE TAX TREATMENT OF THE DEBENTURES AND THE INVESTOR’S PARTICULAR TAX SITUATION. |
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Risk Factors | Investment in the debentures and the underlying common stock involves a high degree of risk. Therefore, you should carefully consider all information in this prospectus and in particular the matters set forth in the “Risk Factors” section beginning on page 13. |
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• | the defendants are enjoined from committing any act of racketeering concerning the manufacturing, marketing, promotion, health consequences or sale of cigarettes in the United States; | ||
• | the defendants are enjoined from making any material false, misleading, or deceptive statement or representation concerning cigarettes that persuades people to purchase cigarettes; | ||
• | the defendants are permanently enjoined from utilizing “lights”, “low tar”, “ultra lights”, “mild”, or “natural” descriptors, or conveying any other express or implied health messages in connection with the marketing or sale of cigarettes as of January 1, 2007; | ||
• | the defendants must make corrective statements on their websites, and in television and print media advertisements, and certain defendants must affix corrective statements as inserts to cigarette packaging and point of sale materials, concerning: |
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(i) | the adverse health effects of smoking; | ||
(ii) | the addictiveness of smoking and nicotine; | ||
(iii) | the lack of any significant health benefit from smoking “lights”, “low tar”, “ultra l lights”, “mild” or “natural” cigarettes; | ||
(iv) | the manipulation of cigarette design and composition to ensure optimum nicotine delivery; and | ||
(v) | the adverse health effects of exposure to secondhand smoke; |
• | the defendants must maintain internet document websites until 2016 with access to smoking and health related documents; | ||
• | the defendants must disclose all disaggregated marketing data to the government in the same form and on the same schedule as they provide such information to the Federal Trade Commission (FTC); | ||
• | the defendants are not permitted to sell or otherwise transfer any of their cigarette brands, product formulas or businesses to any person or entity for domestic use without a court order, and unless the acquiring person or entity will be bound by the terms of the Final Judgment; and | ||
• | the defendants must pay the appropriate costs of the government in prosecuting the action, in an amount to be determined by the trial court. |
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• | coordinate with the franchiser on significant matters relating to their operations, including the opening and closing of offices; | ||
• | make substantial royalty payments to the franchiser and contribute significant amounts to national advertising funds maintained by the franchiser; | ||
• | indemnify the franchiser against losses arising out of the operations of their business under the franchise agreements; and | ||
• | maintain standards and comply with guidelines relating to their operations which are applicable to all franchisees of the franchiser’s real estate franchise system. |
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• | periods of economic slowdown or recession, | ||
• | a change in the low interest rate environment resulting in rising interest rates, | ||
• | decreasing home ownership rates, or | ||
• | declining demand for real estate. |
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• | actual or anticipated fluctuations in our operating results; |
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• | changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors; | ||
• | the operating and stock performance of our competitors; | ||
• | announcements by us or our competitors of new products or services or significant contract, acquisitions, strategic partnerships, joint ventures or capital commitments; | ||
• | the initiation or outcome of litigation; | ||
• | changes in interest rates; | ||
• | general economic, market and political conditions; | ||
• | additions or departures of key personnel; and | ||
• | future sales of our equity or convertible securities. |
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Year Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
December 31, | September 30, | |||||||||||||||||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | 2005 | 2006 | ||||||||||||||||||||||||||
Pro | ||||||||||||||||||||||||||||||||
Actual | Forma | |||||||||||||||||||||||||||||||
Ratio of earnings to fixed charges, as restated(1),(2) | 2.59x | — | — | 1.02x | 3.84x | 3.29x | 3.49x | 2.17x |
(1) | For purposes of computing the ratio of earnings to fixed charges, earnings include pre-tax income (loss) from continuing operations and fixed charges (excluding capitalized interest) and amortization of capitalized interest. Earnings are also adjusted to exclude equity in gain or loss of affiliates. Fixed charges consist of interest expense, capitalized interest (including amounts charged to income and capitalized during the period), a portion of rental expense (deemed by us to be representative of the interest factor of rental payments), amortization of debt issuance costs and amortization of debt discount costs. For the years ended December 31, 2002 and 2003, earnings were insufficient to cover fixed charges as evidenced by a less than one-to-one coverage ratio. Additional earnings of approximately $37.7 million and $16.4 million were necessary for the years ended December 31, 2002 and 2003, respectively. | |
(2) | Amounts previously reported have been restated to correct an error in the computation of the debt discount amortization created by the embedded derivative and the beneficial conversion feature associated with our 5% variable interest senior convertible notes due 2011 issued in the fourth quarter of 2004 and first half of 2005. The restatement adjustments affected our previously reported interest expense and the related income tax effect. The effects of the restatement are reflected in our consolidated financial statements and accompanying notes incorporated by reference in this prospectus. See Note 2 — Restatement of Financial Results and Note 23 — Restated Financial Information to our Form 10-K/A for the year ended December 31, 2005, which was filed on November 24, 2006. The ratio of earnings to fixed charges for the years ended December 31, 2004 and 2005 and the pro-forma amounts for the year ended December 31, 2005 previously presented were 1.00x, 3.24x and 2.82x, respectively. The ratio of earnings to fixed charges previously reported for the years ended December 31, 2001, 2002 and 2003 did not change as a result of the restatement. |
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• | any debentures or portion of debentures surrendered for conversion, or | ||
• | any debentures or portion of debentures surrendered for redemption or repurchase by us and not withdrawn. |
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• | if certificated debentures have been issued, the debenture certificate numbers (or, if your debentures are not certificated, your repurchase notice must comply with appropriate DTC procedures); | ||
• | the portion of the principal amount of debentures to be repurchased, which must be in $1,000 multiples; and | ||
• | that the debentures are to be repurchased by us pursuant to the applicable provisions of the indenture. |
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• | the principal amount of the withdrawn debentures; | ||
• | if certificated debentures have been issued, the certificate numbers of the withdrawn debentures (or, if your debentures are not certificated, your withdrawal notice must comply with appropriate DTC procedures); and | ||
• | the principal amount, if any, that remains subject to the repurchase notice. |
• | the debenture will cease to be outstanding; | ||
• | interest and registration default payments, if any, will cease to accrue; and | ||
• | all other rights of the holder will terminate, other than the right to receive the repurchase price upon delivery of the debenture. |
• | comply with the provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act that may then be applicable; and | ||
• | file a Schedule TO or any other required schedule or form under the Exchange Act. |
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• | accept for payment debentures or portions thereof properly tendered pursuant to the repurchase offer, | ||
• | deposit with the paying agent cash sufficient to pay the repurchase price, together with accrued and unpaid interest, if any, and registration default payments, if any, to but excluding the date of repurchase of all debentures so tendered, and |
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• | deliver to the trustee the debentures so accepted, together with an officers’ certificate listing the debentures or portions thereof being purchased by us. |
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(% OF PRINCIPAL AMOUNT)
Effective Date | ||||||||||||||||||||||||||||
Stock Price | 6/27/06 | 6/15/07 | 6/15/08 | 6/15/09 | 6/15/10 | 6/15/11 | 6/15/12 | |||||||||||||||||||||
$15.49 | 2.41 | % | 0.55 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||
$17.04 | 8.37 | % | 6.16 | % | 3.73 | % | 1.20 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||
$18.58 | 14.61 | % | 12.14 | % | 9.36 | % | 6.33 | % | 3.08 | % | 0.00 | % | 0.00 | % | ||||||||||||||
$20.13 | 21.10 | % | 18.43 | % | 15.38 | % | 11.98 | % | 8.18 | % | 3.71 | % | 0.00 | % | ||||||||||||||
$20.48 | 22.41 | % | 19.70 | % | 16.60 | % | 13.14 | % | 9.26 | % | 4.64 | % | 0.00 | % | ||||||||||||||
$21.68 | 21.91 | % | 19.06 | % | 15.81 | % | 12.15 | % | 7.98 | % | 2.92 | % | 0.00 | % | ||||||||||||||
$23.23 | 21.16 | % | 18.20 | % | 14.80 | % | 10.96 | % | 6.56 | % | 1.21 | % | 0.00 | % | ||||||||||||||
$24.78 | 20.51 | % | 17.48 | % | 13.98 | % | 10.02 | % | 5.48 | % | 0.04 | % | 0.00 | % | ||||||||||||||
$26.32 | 19.96 | % | 16.87 | % | 13.30 | % | 9.27 | % | 4.65 | % | 0.00 | % | 0.00 | % | ||||||||||||||
$27.88 | 19.48 | % | 16.34 | % | 12.72 | % | 8.64 | % | 4.01 | % | 0.00 | % | 0.00 | % | ||||||||||||||
$29.42 | 19.04 | % | 15.87 | % | 12.22 | % | 8.11 | % | 3.48 | % | 0.00 | % | 0.00 | % | ||||||||||||||
$30.97 | 18.64 | % | 15.45 | % | 11.78 | % | 7.67 | % | 3.06 | % | 0.00 | % | 0.00 | % | ||||||||||||||
$38.71 | 17.04 | % | 13.79 | % | 10.09 | % | 6.00 | % | 1.48 | % | 0.00 | % | 0.00 | % | ||||||||||||||
$46.46 | 15.65 | % | 12.42 | % | 8.75 | % | 4.68 | % | 0.22 | % | 0.00 | % | 0.00 | % | ||||||||||||||
$54.20 | 14.38 | % | 11.16 | % | 7.49 | % | 3.44 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||
$61.94 | 13.14 | % | 9.92 | % | 6.26 | % | 2.22 | % | 0.00 | % | 0.00 | % | 0.00 | % |
• | If the Stock Price is between two stock price amounts listed on the Make-Whole Premium Table or the Effective Date is between two dates listed on the Make-Whole Premium Table, the make-whole premium shall be determined by linear interpolation between the amounts set forth in the Make-Whole Premium Table for the higher and lower stock price amounts and the two dates, as applicable, based on a 365-day or 366-day year, as applicable, | ||
• | If the Stock Price on the Effective Date exceeds $61.94 per share (subject to certain adjustment), (the “Stock Price Cap”), the amount of the make-whole premium will be equal to the make-whole premium as if the Stock Price were $61.94 (subject to certain adjustment), and | ||
• | If the Stock Price on the Effective Date is less than or equal to $15.49 per share (subject to certain adjustment), (the “Stock Price Threshold”), no make-whole premium will be paid. The Stock Prices set forth in the first column are subject to adjustment. | ||
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• | our providing timely written notice of our election to pay all or part of the make-whole premium in shares of our common stock, | ||
• | our common stock to be issued as payment for the make-whole premium being approved for listing on a U.S. national securities exchange or the Nasdaq National Market, the Nasdaq SmallCap Market or any similar system of automated dissemination of quotations of securities, | ||
• | there being sufficient authorized but unissued (or issued but not outstanding) shares of our common stock to issue such shares of our common stock in connection with the make-whole premium, and such shares of common stock will upon issue, be duly and validly issued and fully paid and nonassessable and free of any preemptive or similar rights, and | ||
• | the receipt by the trustee of an (1) officers’ certificate stating that the terms of the issuance of the shares of common stock are in conformity with the indenture, (2) an opinion of counsel to the effect that the shares of common stock to be issued by us as payment for the make-whole premium in respect of the debentures have been duly authorized and, when issued and delivered pursuant to the terms of the indenture in connection with the payment of such make-whole premium will be validly issued, fully paid and non-assessable and (3) an officer’s certificate, stating that the conditions to the issuance of the shares of our common stock have been satisfied. |
• | either (1) we are the continuing person or (2) the person (if other than us) formed by such consolidation or into which we are merged or the person which acquires by conveyance or transfer, or which leases, our properties and assets substantially as an entirety (the “Surviving Entity”), (x) shall be either (i) organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia, or (ii) organized under the laws of a jurisdiction outside the United States and has, or immediately after the transaction or event will have, common stock traded on a national securities exchange in the United States or quoted on the Nasdaq National Market or The Nasdaq SmallCap Market and a worldwide total market capitalization of its equity securities before giving effect to the consolidation or merger of at least $250.0 million, and (y) the surviving entity shall expressly assume, by a supplemental indenture, executed and delivered to the trustee, all of our obligations under the debentures and the indenture, | ||
• | immediately after giving effect to such transaction, no event of default, and no event which, after notice or lapse of time or both, would become an event of default, shall have occurred and be continuing, and | ||
• | we or the Surviving Entity have delivered to the trustee an officers’ certificate and an opinion of counsel stating that the transaction complied with the provisions of the indenture. |
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• | our (1) failure to deliver the required number of shares of our common stock into which debentures shall have been converted within 30 business days after the applicable conversion date or (2) notice, written or oral, to any holders, including by way of public announcement or through any agents of any holder, at any time, of our intention not to comply with a request for conversion of any debentures into shares of our common stock that is tendered in accordance with the provisions of the debentures, | ||
• | at any time following the 30th consecutive business day that a holder’s pro rata share of the number of shares of our common stock reserved for the purpose of issuance upon conversion of all debentures is exceeded by the number of shares of common stock that such holder would be entitled to receive upon a conversion of the full principal amount of such holder’s debentures (without regard to the Conversion Limitation), | ||
• | a default in the payment of interest or registration default payments, if any, on any debentures when due and payable, which default continues for a period of five days, | ||
• | a default in the payment of the principal amount, the redemption price, the fundamental change repurchase price or any applicable make-whole premium on any debenture when such payment becomes due and payable, | ||
• | a default in our performance of any of our covenants, agreements or conditions in the indenture or the debentures (other than a default specified in the bullet points above), which default continues for a period of 60 days after there has been given, by registered or certified mail, (1) to us by the trustee or (2) to us and the trustee by the holders of at least 25% in aggregate principal amount of the outstanding debentures, a written notice specifying such default and requiring it to be remedied and stating that such notice is a “notice of default” thereunder, | ||
• | a default by us or any of our significant subsidiaries (as defined under Regulation S-X of the Exchange Act) in the payment of the principal or interest on any loan agreement or other instrument under which there may be outstanding, or by which there may be evidenced, any debt for money borrowed in excess of $10.0 million in the aggregate of us and any of our significant subsidiaries (other than indebtedness for borrowed money secured only by the real property to which the indebtedness relates and which is non-recourse to us or to our significant subsidiary), whether such debt now exists or shall hereafter be created, resulting in such debt becoming or being declared due and payable prior to its stated maturity, and such acceleration shall not have been rescinded or annulled within 30 days after the receipt by us or such significant subsidiary from the trustee or by the trustee, us and such significant subsidiary by the holders of at least 25% in aggregate principal amount of the outstanding debentures of written notice specifying such default and requiring it to be remedied and stating that such notice is a “notice of default” thereunder (providedthat if any time before a judgment or decree has been obtained by the trustee as provided in the indenture, such default is remedied or cured by us or such significant subsidiary within the applicable cure period, or |
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is waived by the holders of such indebtedness, default under this clause shall be deemed to have been remedied, cured or waived, as the case may be), | |||
• | one or more final unsatisfied judgments not covered by insurance aggregating in excess of $10.0 million, at any one time, are rendered against us or any significant subsidiary and not stayed, bonded or discharged within 60 days, | ||
• | our failure to give notice of the occurrence of a fundamental change as and when required by the indenture, and | ||
• | certain events of bankruptcy or insolvency described in the indenture with respect to us or any of our significant subsidiaries. |
• | the holders have previously given written notice to the trustee of a continuing event of default, | ||
• | the holders of not less than 25% in aggregate principal amount of the outstanding debentures make a written request to the trustee to institute proceedings in respect of such event of default in the name of the trustee, |
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• | the holders offer the trustee indemnity satisfactory to the trustee against any loss, liability or expense, | ||
• | within 60 days after its receipt of such notice, request and offer of security or indemnity, the trustee has failed to institute any such proceeding, and | ||
• | the trustee has not received a contrary direction from the holders of a majority in aggregate principal amount of the outstanding debentures during such 60 day period. |
• | reduce the rate of or extend the time for payment of interest, if any, on the debentures, | ||
• | reduce the principal amount of, or extend the maturity date of, the debentures, | ||
• | make any change that impairs or adversely affects the conversion rights of the holders of the debentures, | ||
• | reduce the redemption price, the fundamental change repurchase price or the applicable make-whole premium or amend or modify in any manner adverse to the holders our obligation to make such payments, whether through an amendment or waiver of provisions in the covenants or definitions or otherwise, | ||
• | modify the provisions with respect to the right of holders to cause us to redeem the debentures on the redemption date or to repurchase debentures upon a fundamental change in a manner adverse to holders, | ||
• | make any interest or principal on the debentures payable in money other than that stated in the debentures or other than in accordance with the provisions of the indenture, | ||
• | impair the right of any holder to receive payment of the principal amount of or interest or registration default payments, if any, on a holder’s debentures on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder’s debentures, | ||
• | reduce the quorum or voting requirements under the indenture, |
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• | change the ranking of the debentures in a manner adverse to the holders thereof, | ||
• | make any change in the amendment provisions which require each holder’s consent or in the waiver provisions, | ||
• | reduce the percentage of aggregate principal amount of outstanding debentures, the consent of whose holders is required for any such supplemental indenture, or the consent of whose holders is required for any waiver of compliance with certain provisions of the indenture or certain defaults hereunder and their consequences provided for in the indenture, | ||
• | modify any of the provisions in the indenture concerning the holders consent requirement described above or the provisions in the indenture concerning the waiver of past defaults, except to increase any such percentage or to provide that certain other provisions of the indenture cannot be modified or waived without the consent of the holder of each outstanding debenture affected thereby, or | ||
• | modify the provisions of the indenture in a manner adverse to the holders in any material respect. |
• | vary or terminate the appointment of the security registrar, paying agent or conversion agent, | ||
• | appoint additional paying agents or conversion agents, or | ||
• | approve any change in the office through which any security registrar or any paying agent or conversion agent acts. |
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(1) | upon deposit of the Global Debentures, DTC will credit the accounts of the Participants designated by the Initial Purchaser with portions of the principal amount of the Global Debentures; and | ||
(2) | ownership of these interests in the Global Debentures will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interest in the Global Debentures). |
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(1) | any aspect of DTC’ s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interest in the Global Debentures or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Debentures; or | ||
(2) | any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. |
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(1) | DTC (a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Debentures or (b) has ceased to be a clearing agency registered under the Exchange Act and, in either case, the Company fails to appoint a successor depositary; | ||
(2) | the Company, at its option, notifies the trustee in writing that it elects to cause the issuance of the Certificated Debentures;providedthat in no event shall the Regulation S Temporary Global Debenture be exchanged for Certificated Debentures prior to (a) the expiration of the Restricted Period and (b) the receipt of any certificates required under the provisions of Regulation S; or | ||
(3) | there has occurred and is continuing a Default or Event of Default with respect to the debentures. |
(1) | such exchange occurs in connection with a transfer of the debentures pursuant to Rule 144A; and | ||
(2) | the transferor first delivers to the trustee a written certificate (in the form provided in the indenture) to the effect that the debentures are being transferred to a Person: |
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(a) | who the transferor reasonably believes to be a qualified institutional buyer within the meaning of Rule 144A; | ||
(b) | purchasing for its own account or the account of a qualified institutional buyer in a transaction meeting the requirements of Rule 144A; and | ||
(c) | in accordance with all applicable securities laws of the states of the United States and other jurisdictions. |
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• | two years after the closing date, | ||
• | the last date on which, in the opinion of counsel to us, the holding period applicable to sales of all registrable securities under Rule 144(k) has expired, | ||
• | the date as of which all registrable securities have been transferred under Rule 144 under circumstances in which any legend borne by such debentures or conversion shares relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed, and | ||
• | the date when all registrable securities shall have been registered under the Securities Act and disposed of. |
• | on or prior to the 180th day after the first date of original issuance of the debentures, the shelf registration statement has not been declared effective by the SEC, | ||
• | we fail, with respect to a debenture holder that supplies the questionnaire described below, to supplement the shelf registration statement in a timely manner in order to name the additional selling securityholder, or | ||
• | after the shelf registration statement has been declared effective, the shelf registration statement ceases to be effective or fails to be usable in connection with resales of debentures and the common stock issuable upon the conversion of the debentures (without being succeeded within three business days by a replacement shelf registration statement filed and declared effective) or usable (including as a result of a Suspension Period) for the offer and sale of debentures for a period of time (including any Suspension Period) which exceeds: (1) 30 consecutive days at any time, (2) 45 days in the aggregate in any three-month period, or (3) 90 days in the aggregate in any 12-month period, |
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• | banks, insurance companies or other financial institutions; | ||
• | persons subject to the United States federal estate, gift or alternative minimum tax arising from the purchase, ownership or disposition of the debentures; | ||
• | tax-exempt organizations; | ||
• | dealers in securities or currencies; | ||
• | traders in securities that elect to use a mark-to-market method of accounting for their securities holdings; | ||
• | foreign persons or entities (except to the extent specifically set forth below); | ||
• | persons that own, or are deemed to own, (a) debentures with a fair market value greater than either (i) 5% of the stock of our Company or (ii) 5% of the total fair market value of all debentures, or (b) stock with a fair market value greater than 5% of the stock of our Company (except to the extent specifically set forth below); | ||
• | certain former citizens or long-term residents of the United States; | ||
• | U.S. holders (as defined below) whose functional currency is not the U.S. dollar; | ||
• | persons who hold the debentures as a position in a hedging transaction, “straddle”, “conversion transaction” or other risk reduction transaction; or | ||
• | persons deemed to sell the debentures or common stock under the constructive sale provisions of the Code. |
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• | an individual citizen or resident of the United States; | ||
• | a corporation or other entity taxable as a corporation for United States federal income tax purposes, or a partnership or other entity taxable as a partnership for United States federal income tax purposes, created or organized in the United States or under the laws of the United States, any state thereof, or the District of Columbia; | ||
• | an estate, the income of which is subject to United States federal income taxation regardless of its source; or | ||
• | a trust that (1) is subject to the primary supervision of a United States court and the control of one or more United States persons or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a United States person. Certain trusts in existence on August 20, 1996, and treated as a United States person prior to such date, may also be treated as U.S. holders. |
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• | require you, regardless of your usual method of tax accounting, to use the accrual method with respect to the debentures; | ||
• | require you to accrue and include in taxable income each year original issue discount at the comparable yield (as described below) which may be substantially in excess of stated interest payments actually received by you; and | ||
• | generally result in ordinary income rather than capital treatment of any gain, and to some extent loss, on the sale, exchange, repurchase or redemption of the debentures. |
• | the product of (i) the adjusted issue price (as defined below) of the debentures as of the beginning of the accrual period and (ii) the comparable yield to maturity (as defined below) of the debentures, adjusted for the length of the accrual period; | ||
• | divided by the number of days in the accrual period; and | ||
• | multiplied by the number of days during the accrual period that you held the debentures. |
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• | first, a negative adjustment will reduce the amount of original issue discount required to be accrued in the current year; | ||
• | second, any negative adjustments that exceed the amount of original issue discount accrued in the current year will be treated as ordinary loss to the extent of your total prior original issue discount inclusions with respect to the debentures, reduced to the extent such prior original issue discount was offset by prior negative adjustments; and | ||
• | third, any excess negative adjustments will be treated as a regular negative adjustment in the succeeding taxable year. |
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• | fail to furnish your taxpayer identification number (“TIN”), which, for an individual, is ordinarily his or her social security number; | ||
• | furnish an incorrect TIN; | ||
• | are notified by the IRS that you have failed to properly report payments of interest or dividends; or | ||
• | fail to certify, under penalties of perjury, that you have furnished a correct TIN and that the IRS has not notified you that you are subject to backup withholding. |
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• | you do not own, actually or constructively, 10% or more of the total combined voting power of all classes of our stock entitled to vote within the meaning of Section 871(h)(3) of the Code; | ||
• | you are not a “controlled foreign corporation” with respect to which we are, directly or indirectly, a “related person”; | ||
• | you are not a bank whose receipt of interest (including original issue discount) on a debenture is described in Section 881(c)(3)(A) of the Code; | ||
• | you provide your name and address, and certify, under penalties of perjury, that you are not a United States person, as defined under the Code (which certification may be made on an IRS Form W-8BEN (or successor form)), or that you hold your debentures through certain intermediaries, and you and the intermediaries satisfy the certification requirements of applicable Treasury Regulations; and | ||
• | our common stock continues to be actively traded within the meaning of Section 871(h)(4)(C)(v)(I) of the Code and we are not a “United States real property holding corporation.” |
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• | the gain is effectively connected with your conduct of a trade or business in the United States; | ||
• | you are an individual who is present in the United States for 183 days or more in the taxable year of disposition, and certain conditions are met; | ||
• | you are subject to Code provisions applicable to certain United States expatriates; or | ||
• | we are or have been a “United States real property holding corporation” for United States federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that you held our common stock. |
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Number of | Number of | Number of | ||||||||||||||||||||||
Shares of | Shares | Shares of | ||||||||||||||||||||||
Common | of Common | Common | ||||||||||||||||||||||
Principal Amount | Stock | Stock | Stock | Percentage of | ||||||||||||||||||||
of Debentures | Beneficially | that May Be Sold | Beneficially | Common | ||||||||||||||||||||
Beneficially | Percentage of | Owned | Pursuant to This | Owned | Stock | |||||||||||||||||||
Owned | Debentures | Before This | Prospectus | After This | Outstanding | |||||||||||||||||||
Name | that May Be Sold | Outstanding | Offering | (1) | Offering | (2) | ||||||||||||||||||
CBARB, a segregated account of Geode Capital Master Fund, Ltd. (3) | $ | 5,000,000 | 4.5 | % | 0 | 244,141 | 0 | * | ||||||||||||||||
Citadel Equity Fund Ltd. (4) | $ | 7,500,000 | 6.8 | % | 0 | 366,211 | 0 | * |
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Number of | Number of | Number of | ||||||||||||||||||||||
Shares of | Shares | Shares of | ||||||||||||||||||||||
Common | of Common | Common | ||||||||||||||||||||||
Principal Amount | Stock | Stock | Stock | Percentage of | ||||||||||||||||||||
of Debentures | Beneficially | that May Be Sold | Beneficially | Common | ||||||||||||||||||||
Beneficially | Percentage of | Owned | Pursuant to This | Owned | Stock | |||||||||||||||||||
Owned | Debentures | Before This | Prospectus | After This | Outstanding | |||||||||||||||||||
Name | that May Be Sold | Outstanding | Offering | (1) | Offering | (2) | ||||||||||||||||||
CNH CA Master Account, L.P. (5) | $ | 3,500,000 | 3.2 | % | 760,388 | 170,899 | 589,489 | 1.0 | % | |||||||||||||||
Empyrean Capital Fund, L.P. (6) | $ | 3,363,000 | 3.1 | % | 0 | 164,209 | 0 | * | ||||||||||||||||
Empyrean Capital Overseas Benefit Plan Fund, Ltd. (6) | $ | 698,000 | * | 0 | 34,083 | 0 | * | |||||||||||||||||
Empyrean Capital Overseas Fund, Ltd. (6) | $ | 6,669,000 | 6.1 | % | 0 | 325,635 | 0 | * | ||||||||||||||||
Forest Global Convertible Fund, Ltd., Class A-5 (7) | $ | 1,339,000 | 1.2 | % | 0 | 65,381 | 0 | * | ||||||||||||||||
Forest Multi Strategy Master Fund SPC, on behalf of its Multi Strategy Segregated Portfolio (7) | $ | 80,000 | * | 0 | 3,907 | 0 | * | |||||||||||||||||
HFR CA Global Opportunity Master Trust (7) | $ | 597,000 | * | 0 | 29,151 | 0 | * | |||||||||||||||||
HFR RVA Select Performance Master Trust (7) | $ | 102,000 | * | 0 | 4,981 | 0 | * | |||||||||||||||||
Highbridge International LLC (8) | $ | 3,500,000 | 3.2 | % | 1,974,877 | 170,899 | 1,803,978 | 3.1 | % | |||||||||||||||
Institutional Benchmarks Master Fund, Ltd.(7) | $ | 283,000 | * | 0 | 13,819 | 0 | * | |||||||||||||||||
Jefferies & Company, Inc. (9) | $ | 2,750,000 | 2.5 | % | 3,358,118 | 134,278 | 3,223,840 | 5.7 | % | |||||||||||||||
LLT Limited (7) | $ | 302,000 | * | 0 | 14,747 | 0 | * |
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Number of | Number of | Number of | ||||||||||||||||||||||
Shares of | Shares | Shares of | ||||||||||||||||||||||
Common | of Common | Common | ||||||||||||||||||||||
Principal Amount | Stock | Stock | Stock | Percentage of | ||||||||||||||||||||
of Debentures | Beneficially | that May Be Sold | Beneficially | Common | ||||||||||||||||||||
Beneficially | Percentage of | Owned | Pursuant to This | Owned | Stock | |||||||||||||||||||
Owned | Debentures | Before This | Prospectus | After This | Outstanding | |||||||||||||||||||
Name | that May Be Sold | Outstanding | Offering | (1) | Offering | (2) | ||||||||||||||||||
Lyxor/Forest Fund Limited (7) | $ | 1,297,000 | 1.2 | % | 0 | 63,331 | 0 | * | ||||||||||||||||
Lyxor / PRS Convertible Fund Limited (10) | $ | 100,000 | * | 0 | 4,883 | 0 | * | |||||||||||||||||
Mohican VCA Master Fund, Ltd. (11) | $ | 500,000 | * | 57,938 | 24,415 | 33,523 | * | |||||||||||||||||
Morgan Stanley Convertible Securities Trust (12) | $ | 1,225,000 | 1.1 | % | 0 | 59,815 | 0 | * | ||||||||||||||||
Plexus Fund Limited (13) | $ | 4,000,000 | 3.6 | % | 0 | 195,313 | 0 | * | ||||||||||||||||
Polygon Global Opportunities Master Fund (14) | $ | 4,500,000 | 4.1 | % | 0 | 219,727 | 0 | * | ||||||||||||||||
PRS Convertible Arbitrage Master Fund (10) | $ | 150,000 | * | 0 | 7,325 | 0 | * | |||||||||||||||||
PRS Convertible Arbitrage Master II Fund (10) | $ | 200,000 | * | 0 | 9,766 | 0 | * | |||||||||||||||||
Radcliffe SPC, Ltd. for and on behalf of the Class A Convertible Crossover Segregated Portfolio (15) | $ | 6,250,000 | 5.7 | % | 0 | 305,176 | 0 | * | ||||||||||||||||
RHP Master Fund, Ltd. (16) | $ | 7,000,000 | 6.4 | % | 0 | 341,797 | 0 | * | ||||||||||||||||
Silvercreek II Limited (17) | $ | 1,640,000 | 1.5 | % | 0 | 80,079 | 0 | * | ||||||||||||||||
Silvercreek Limited Partnership (17) | $ | 2,610,000 | 2.4 | % | 0 | 127,442 | 0 | * | ||||||||||||||||
Stark Master Fund Ltd. (18) | $ | 4,000,000 | 3.6 | % | 1,007,813 | 195,313 | 812,500 | 1.4 | % | |||||||||||||||
Tribeca Global Convertible Investments Ltd. (19) | $ | 4,000,000 | 3.6 | % | 0 | 195,313 | 0 | * |
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Number of | Number of | Number of | ||||||||||||||||||||||
Shares of | Shares | Shares of | ||||||||||||||||||||||
Common | of Common | Common | ||||||||||||||||||||||
Principal Amount | Stock | Stock | Stock | Percentage of | ||||||||||||||||||||
of Debentures | Beneficially | that May Be Sold | Beneficially | Common | ||||||||||||||||||||
Beneficially | Percentage of | Owned | Pursuant to This | Owned | Stock | |||||||||||||||||||
Owned | Debentures | Before This | Prospectus | After This | Outstanding | |||||||||||||||||||
Name | that May Be Sold | Outstanding | Offering | (1) | Offering | (2) | ||||||||||||||||||
Van Kampen Harbor Fund (20) | $ | 2,275,000 | 2.1 | % | 0 | 111,084 | 0 | * | ||||||||||||||||
Vicis Capital Master Fund (21) | $ | 3,000,000 | 2.7 | % | 0 | 146,485 | 0 | * | ||||||||||||||||
Wachovia Securities International Ltd. (22) | $ | 3,000,000 | 2.7 | % | 0 | 146,485 | 0 | * | ||||||||||||||||
Wolverine Convertible Arbitrage Funds Limited (23) | $ | 4,000,000 | 3.6 | % | 0 | 195,313 | 0 | * | ||||||||||||||||
Xavex Convertible Arbitrage 8 Fund (10) | $ | 50,000 | * | 0 | 2,442 | 0 | * | |||||||||||||||||
Any other holder of debentures or future transferee from any holder (24) | $ | 24,520,000 | 22.3 | % | 0 | 1,197,266 | 0 | * |
* | Less than 1%. | |
(1) | Assumes conversion of all of the securityholders’ debentures at a conversion price of $20.48 per share of common stock. The initial conversion price of $21.50 per share has been adjusted to reflect a 5% stock dividend paid by us on September 29, 2006. The conversion price is subject to further adjustment as described under “Description of Debentures-Conversion Rights” and, as a result, the amount of common stock issuable upon conversion of the notes may increase or decrease in the future. | |
(2) | Calculated based on Rule 13d-3(d)(i) of the Exchange Act using shares of common stock outstanding as of December 14, 2006. In calculating this amount, we treated as outstanding the number of shares of common stock issuable upon conversion of all of that particular securityholder’s debentures. We did not assume, however, the conversion of any other securityholder’s debentures. | |
(3) | Phil Dumas exercises voting and dispositive power over these securities. | |
(4) | Citadel Limited Partnership (“CLP”) is the trading manager of the selling securityholder and has investment discretion over these securities. Citadel Investment Group, L.L.C. (“CIG”) controls CLP. Kenneth C. Griffin controls CIG and has ultimate investment discretion over these securities. CLP, CIG and Mr. Griffin each disclaim beneficial ownership of these securities. The selling securityholder has informed us that (i) it is an affiliate of Aragon Investments Ltd., Palofax Trading LLC, Citadel Trading Group, LLC and Citadel Derivatives Group, LLC, registered broker-dealers, (ii) it purchased the securities in the ordinary course of business, and (iii) at the time of purchase, the selling securityholder had no agreements or understandings, directly or indirectly, with any person to distribute the securities. |
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(5) | CNH Partners, LLC is the investment advisor of the selling securityholder and has sole voting and dispositive power over these securities. Investment principals for the advisor are Robert Krail, Mark Mitchell and Todd Pulvino. The selling securityholder also beneficially owns $10,375,000 principal amount of our 5% variable interest senior convertible notes due 2011 issued in April 2005, convertible into 589,489 shares of our common stock. | |
(6) | Tian Xue exercises voting and dispositive power over these securities. | |
(7) | Forest Investment Management LLC (“Forest”) exercises voting and dispositive power over these securities. Forest is wholly owned by Forest Partners II, LP, the sole general partner of which is Michael A. Boyd Inc., which is solely owned by Michael A. Boyd. | |
(8) | Highbridge Capital Management, LLC (“Highbridge”) is the trading manager of the selling securityholder and exercises voting control and dispositive power over these securities. Glenn Dubin and Henry Swieca control Highbridge. Each of Highbridge, Glenn Dubin and Henry Swieca disclaims beneficial ownership of these securities. The selling securityholder also beneficially owns $31,750,000 principal amount of our 5% variable interest senior convertible notes due 2011 issued in November 2004, convertible into 1,803,978 shares of our common stock. | |
(9) | Jefferies & Company, Inc. (“Jefferies”), a subsidiary of Jefferies Group, Inc., was the initial purchaser of the debentures. Jefferies or its affiliates has from time to time provided investment banking, general financing and banking services to us and our affiliates, for which they have received customary compensation. Jonathan Cunningham exercises voting and dispositive power over these securities. Jefferies has informed us that it is a registered broker-dealer. As a result, it will be deemed to be an “underwriter” within the meaning of Section 2(11) of the Securities Act and be subject to the prospectus delivery requirements of the Securities Act and certain statutory liabilities. Jefferies also beneficially owns (i) $140,000 principal amount of our 5% variable interest senior convertible notes due 2011 issued in April 2005, convertible into 7,955 shares of our common stock, (ii) $56,000 principal amount of our 5% variable interest senior convertible notes due 2011 issued in November 2004, convertible into 3,182 shares of our common stock, and (iii) 40,916 shares of our common stock. Jefferies Group, Inc. beneficially owns 3,171,787 shares of our common stock. | |
(10) | Jonathan Arnold exercises voting and dispositive power over these securities. | |
(11) | Eric Hage and Daniel Hage act as portfolio managers for the selling securityholder and exercise voting and dispositive power over these securities. The selling securityholder also beneficially owns $590,000 principal amount of our 5% variable interest senior convertible notes due 2011 issued in November 2004, convertible into 33,523 shares of our common stock. | |
(12) | Morgan Stanley Investment Management is the investment advisor of the selling securityholder and exercises voting and dispositive power over these securities. The portfolio managers for the advisor are Ellen Gold and David McLaughlin. The selling securityholder has informed us that (i) it is an affiliate of a registered broker-dealer, (ii) it purchased the securities in the ordinary course of business, and (iii) at the time of purchase, the selling securityholder had no agreements or understandings, directly or indirectly, with any person to distribute the securities. | |
(13) | Dermot Keane exercises voting and dispositive power over these securities. | |
(14) | Polygon Investment Partners LLP and Polygon Investment Partners LP (the “Investment Managers”), Polygon Investments Ltd. (the “Manager”), Alexander E. Jackson, Reade E. Griffith and Patrick G. G. Dear share voting and dispositive power over these securities. The Investment Managers, the Manager, Alexander E. Jackson, Reade E. Griffith and Patrick G. G. Dear disclaim beneficial ownership of these securities. | |
(15) | Pursuant to an investment management agreement, RG Capital Management, L.P. (“RG Capital”) serves as the investment manager of Radcliffe SPC, Ltd.’s Class A Convertible Crossover |
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Segregated Portfolio. RGC Management Company, LLC (“Management”) is the general partner of RG Capital. Steve Katznelson and Gerald Stahlecker serves as the managing members of Management. Each of RG Capital, Management and Messrs. Katznelson and Stahlecker disclaims beneficial ownership of the securities owned by Radcliffe SPC, Ltd. for and on behalf of the Class A Convertible Crossover Segregated Portfolio. | ||
(16) | RHP Master Fund, Ltd. is a party to an investment management agreement with Rock Hill Investment Management, L.P., a limited partnership of which the general partner is RHP General Partner, LLC. Pursuant to such agreement, Rock Hill Investment Management directs the voting and disposition of shares owned by RHP Master Fund. Wayne Bloch and Peter Lockhart own all of the interests in RHP General Partner. The aforementioned entities and individuals disclaim beneficial ownership of our common stock owned by the RHP Master Fund. | |
(17) | Louise Morwick, President Silver Creek Management Inc., and Bryn Joynt, Vice President Silvercreek Management Inc., exercise voting and dispositive power over these securities. | |
(18) | Brian J. Stark and Michael A. Roth exercise voting and dispositive power over these securities. The selling securityholder has informed us that (i) it is an affiliate of Reliant Trading and Shepherd Trading Limited, registered broker-dealers, (ii) it purchased the securities in the ordinary course of business, and (iii) at the time of purchase, the selling securityholder had no agreements or understandings, directly or indirectly, with any person to distribute the securities. The selling securityholder also beneficially owns (i) $2,600,000 principal amount of our 5% variable interest senior convertible notes due 2011 issued in April 2005, convertible into 147,728 shares of our common stock, and (ii) $11,700,000 principal amount of our 5% variable interest senior convertible notes due 2011 issued in November 2004, convertible into 664,772 shares of our common stock. | |
(19) | Jeffrey Chmielewski exercises voting and dispositive power over these securities. The selling securityholder has informed us that (i) it is an affiliate of a registered broker-dealer, (ii) it purchased the securities in the ordinary course of business, and (iii) at the time of purchase, the selling securityholder had no agreements or understandings, directly or indirectly, with any person to distribute the securities. | |
(20) | Van Kampen Asset Management is the investment advisor of the selling securityholder and exercises voting and dispositive power over these securities. The portfolio managers for the advisor are Ellen Gold and David McLaughlin. The selling securityholder has informed us that (i) it is an affiliate of a registered broker-dealer, (ii) it purchased the securities in the ordinary course of business, and (iii) at the time of purchase, the selling securityholder had no agreements or understandings, directly or indirectly, with any person to distribute the securities. | |
(21) | Vicis Capital LLC is the investment manager of the selling securityholder and exercises voting and dispositive power over these securities. John Succo, Sky Lucas and Shad Stastney jointly control Vicis Capital LLC but disclaim individual beneficial ownership of these securities. | |
(22) | Dan Duggan exercises voting and dispositive power over these securities. The selling securityholder has informed us that (i) it is a registered broker-dealer, (ii) it purchased the securities in the ordinary course of business, and (iii) at the time of purchase, the selling securityholder has no agreements or understandings, directly or indirectly, with any person to distribute the securities. The selling securityholder will be deemed to be an “underwriter” within the meaning of Section 2(11) of the Securities Act and be subject to the prospectus delivery requirements of the Securities Act and certain statutory liabilities. | |
(23) | Rob Bellick exercises voting and dispositive power over these securities. | |
(24) | Information about other selling securityholders will be set forth in prospectus supplements, if required. Assumes that any other holders of debentures, or any future transferees, pledgees, donees or successors of or from any such other holders of debentures, do not beneficially own any common stock other than the common stock issuable upon conversion of the debentures at the initial conversion rate. |
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• | directly by the selling securityholders; or | ||
• | through underwriters, broker-dealers or agents that may receive compensation in the form of discounts, concessions or commissions from the selling securityholders or the purchasers of the debentures and the underlying common stock. |
• | fixed prices, | ||
• | prevailing market prices at the time of sale, | ||
• | varying prices determined at the time of sale, or | ||
• | negotiated prices. |
• | on any national securities exchange or quotation service on which the debentures and underlying common stock may be listed or quoted at the time of the sale, including the New York Stock Exchange in the case of the common stock, | ||
• | in the over-the-counter market, | ||
• | in transactions otherwise than on such exchanges or services or in the over-the-counter market, | ||
• | through the writing of options, whether the options are listed on an option exchange or otherwise, | ||
• | through the settlement of short sales, or | ||
• | through other types of transactions. |
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• | the specific debentures or common stock to be offered or sold, | ||
• | the names of the selling securityholders, | ||
• | the respective purchase prices and public offering prices and other material terms of the offering, | ||
• | the names of any participating agents, broker-dealers or underwriters, and | ||
• | any applicable commissions, discounts, concessions and other items constituting compensation from the selling securityholders. |
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Securities and Exchange Commission registration fee | $ | 11,770 | ||
Trustee’s fees and expenses | 10,000 | |||
Accounting fees and expenses | 20,000 | |||
Legal fees and expenses | 40,000 | |||
Miscellaneous | 8,230 | |||
Total | $ | 90,000 | ||
Exhibit | ||
Number | Exhibit Title | |
3.1 | Amended and Restated Certificate of Incorporation of Vector (incorporated by reference to Exhibit 3.1 in Vector’s Form 10-Q for the quarter ended September 30, 1999). | |
3.2 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Vector (incorporated by reference to Exhibit 3.1 in Vector’s Form 8-K dated May 24, 2000). | |
3.3 | Bylaws of Vector (incorporated by reference to Exhibit 3.3 in Vector’s Form 10-K for the year ended December 31, 2003). | |
5 | Opinion of McDermott Will & Emery LLP.* |
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Exhibit | ||
Number | Exhibit Title | |
10.1 | Indenture, dated as of July 12, 2006, between Vector and Wells Fargo Bank, N.A. (incorporated by reference to Exhibit 4.1 in Vector’s Form 8-K dated July 17, 2006). | |
10.2 | Registration Rights Agreement, dated as of July 12, 2006, between Vector and the purchasers set forth therein (incorporated by reference to Exhibit 4.2 in Vector’s Form 8-K dated July 12, 2006). | |
10.3 | Purchase Agreement, dated as of June 27, 2006, between Vector and Jefferies & Company, Inc. (incorporated by reference to Exhibit 1.1 in Vector’s Form 8-K dated June 30, 2006). | |
12 | Computation of Ratio of Earnings to Fixed Charges. | |
23.1 | Consent of PricewaterhouseCoopers LLP, independent registered certified public accounting firm. | |
23.2 | Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm. | |
23.3 | Consent of Weiser LLP, independent registered public accounting firm. | |
23.4 | Consent of McDermott Will & Emery LLP (included in Exhibit 5)* | |
24 | Power of Attorney (included on signature page).* | |
25 | Form T-1 Statement of Eligibility of Trustee for Indenture under the Trust Indenture Act of 1939.* |
* | Previously filed. |
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VECTOR GROUP LTD. | ||||
By: | /s/ J. Bryant Kirkland III | |||
J. Bryant Kirkland III, | ||||
Vice President, Chief Financial Officer and Treasurer | ||||
/s/ Howard M. Lorber* | President and Chief | |
Executive Officer | ||
(Principal Executive Officer) | ||
/s/ J. Bryant Kirkland III | Vice President, Treasurer and | |
Chief Financial Officer (Principal | ||
Financial Officer and Principal | ||
Accounting Officer) | ||
/s/ Henry C. Beinstein* | ||
Director | ||
/s/ Ronald J. Bernstein* | Director | |
/s/ Robert J. Eide* | Director | |
/s/ Bennett S. LeBow* | Director | |
/s/ Howard M. Lorber* | Director | |
/s/ Jeffrey S. Podell* | Director | |
/s/ Jean E. Sharpe* | Director |
*By: | /s/ J. Bryant Kirkland III | ||||
J. Bryant Kirkland III | |||||
Attorney-in-Fact | |||||
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