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Exhibit 4.2
THIS SUPPLEMENTAL INDENTURE, dated as of February 21, 2001,
between Arrow Electronics, Inc., a corporation duly organized and existing under
the laws of New York (the "Company"), and The Bank of New York, a banking
corporation duly organized and existing under the laws of the State of New York
(the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issue from time
to time of its unsecured debentures, notes or other evidences of indebtedness to
be issued in one or more series (the "Securities") up to such Principal or
amounts as may from time to time be authorized in accordance with the terms of
the Indenture dated as of January 15, 1997 between the Company and the Trustee
(as amended, the "Indenture"), and to provide, among other things, for the
authentication, delivery and administration thereof, the Company duly authorized
the execution and delivery of the Indenture;
WHEREAS, the Company has heretofore issued five series of
Securities pursuant to the Indenture;
WHEREAS, the Company wishes to issue an additional series of
Securities pursuant to the Indenture, to be designated the "Zero Coupon
Convertible Senior Debentures due 2021" (the "Debentures");
WHEREAS, the Company desires to amend, and hereby directs the
Trustee to enter into the amendment of, the Indenture by this Supplemental
Indenture in order to add certain provisions to the Indenture to provide for the
issuance of the Debentures;
WHEREAS, the Company has duly authorized the execution and
delivery of this Supplemental Indenture and all other things necessary to make
the Indenture, as hereby supplemented and amended, a valid indenture and
agreement according to its terms have been done;
NOW, THEREFORE,
In consideration of the premises and of the covenants
contained in the Indenture, the Company has executed and delivered this
Supplemental Indenture.
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ARTICLE I
TERMS AND ISSUANCE OF THE DEBENTURES
SECTION 1. (a) ISSUANCE AND DESIGNATION. A Series of
Securities which shall be designated as the Company's "Zero Coupon Convertible
senior Debentures due 2021" shall be executed, authenticated and delivered in
accordance with the provisions of, and shall in all respects be subject to, the
terms, conditions and covenants of, the Indenture and this Indenture Supplement
(including the form of Debenture set forth in Exhibit A). The aggregate
principal amount at maturity of the Debentures which may be authenticated and
delivered under this Indenture Supplement shall not, except as permitted by the
provisions of the Indenture, exceed $1,523,750,000.
(b) FORM AND OTHER TERMS OF DEBENTURES; INCORPORATION OF
TERMS. The Debentures shall be substantially in the form attached hereto as
Exhibit A. The terms of such Debentures are herein incorporated by reference and
are part of this Indenture Supplement.
ARTICLE TWO
ADDITIONAL PROVISIONS
SECTION 2. DEFINITIONS.
(a) The following terms and their respective meanings are
hereby added to the Indenture at the end of Section 1.1 thereof with respect to
the Debentures only:
"Cash" has the meaning specified in Section 3.8(b).
"Company Notice Date" has the meaning specified in
Section 3.8(c).
"Conversion Date" has the meaning specified in
Section 11.2.
"Conversion Rate" has the meaning specified in
Section 11.1.
"Defaulted Interest" has the meaning specified in
Section 11.6(d).
"Distributed Securities" has the meaning specified in
Section 11.9(a).
"Expiration Time" has the meaning specified in
Section 11.9(c).
"Fundamental Change" means the occurrence of any
transaction or event in connection with which all or substantially all
Common Stock shall be exchanged for, converted into, acquired for or
constitute solely the right to receive (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise) consideration which is
not all or substantially all common stock listed (or, upon consummation
of or immediately
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following such transaction or event which will be listed), on a United
States national securities exchange or approved for quotation on the
Nasdaq National Market or any similar United States system of automated
dissemination of quotations of securities prices.
"Fundamental Change Redemption Date" has the meaning
specified in Section 3.9(a).
"Fundamental Change Redemption Notice" has the
meaning specified in Section 3.9(a).
"Fundamental Change Redemption Price" has the meaning
specified in Section 3.9(a).
"Interest Payment Date" has the meaning specified in
Section 11.6(a).
"Issue Price" of any Security means, in connection
with the original issuance of such Security, the initial issue price at
which the Security is issued as set forth on the face of the Security.
"Market Price" has the meaning specified in Section
3.8(d).
"Option Exercise Date" has the meaning specified in
Section 11.6(a).
"Original Issue Discount" of any Security means the
difference between the Issue Price and the Principal of the Security as
set forth on the face of the Security. For purposes of this Indenture
and the Securities, accrual of Original Issue Discount shall be
calculated on the basis of a 360-day year consisting of twelve 30-day
months.
"Purchase Date" has the meaning specified in Section
3.8(a).
"Purchase Price" has the meaning specified in Section
3.8(a).
"Purchase Notice" has the meaning specified in
Section 3.8(a).
"Purchased Shares" has the meaning specified in
Section 11.9(c).
"Redemption Date" means a date specified for
redemption of the Securities (other than redemption upon a Fundamental
Change at the option of the Holder) in accordance with the terms of the
Securities and Section 3.1 of this Indenture.
"Redemption Price" shall have the meaning set forth
in paragraph 3 of the Securities.
"Regular Record Date" has the meaning specified in
Section 11.6(a).
"Sale Price" has the meaning specified in Section
3.8(d).
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"Tax Event" means that the Company shall have
received an opinion from independent tax counsel experienced in such
matters to the effect that, on or after February 21, 2001, as a result
of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or
therein or (b) any amendment to, or change in, an interpretation or
application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority, in each case, which
amendment or change is enacted, promulgated, issued or announced or
which interpretation is issued or announced or which action is taken,
on or after February 21, 2001, there is more than an insubstantial risk
that interest, including Original Issue Discount, payable on the
Securities either (i) would not be deductible on a current accrual
basis or (ii) would not be deductible under any other method, in either
case, in whole or in part, by the Company (by reason of deferral,
disallowance or otherwise) for United States Federal income tax
purposes.
"Tax Event Date" has the meaning specified in Section
11.6.
"Tender Expiration Time" has the meaning specified in
Section 11.9(d).
"Tender Purchased Shares" has the meaning specified
in Section 11.9(d).
"Trading Day" means a day during which trading in
securities generally occurs on the New York Stock Exchange or, if the
applicable security is not quoted on the New York Stock Exchange, on
the Nasdaq National Market, or if the applicable security is not listed
on the Nasdaq National Market, on the principal other national or
regional securities exchange on which the applicable security is then
listed or, if the applicable security is not listed on a national or
regional securities exchange, on the principal other market on which
the applicable security is then traded.
"Trigger Event" has the meaning specified in Section
11.20.
(b) For purposes of the Debentures only, unless the
context otherwise requires:
(1) references in the Indenture to "interest" shall be deemed
to refer to the Original Issue Discount on the Debentures;
(2) references in the Indenture to "Principal" shall be deemed
to be references to the "Principal Amount" or "Issue Price" (or if the
securities have been converted to interest-bearing Securities following a Tax
Event, the Restated Principal Amount"), as the context may requires; and
(3) references in the Indenture to the term "Security" or
"Securities" shall be deemed to be references to "Debenture" or "Debentures", as
the case may be.
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SECTION 3. (a) REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The following is hereby added to the Indenture in substitution
for the existing Section 2.5 thereof, with respect to the Debentures only:
SECTION 2.5 REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for
exchange ("Registrar"), an office or agency where Securities may be
presented for purchase or payment ("Paying Agent") and an office or
agency where Securities may be presented for conversion into Common
Stock ("Conversion Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one
or more co-registrars, one or more additional paying agents and one or
more additional conversion agents. The term Paying Agent includes any
additional paying agent. The term Conversion Agent includes any
additional conversion agent.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar,
the Company shall cause to be furnished to the Trustee at least
semiannually on August 21 and February 21 a listing of Holders dated
within 15 days of the date on which the list is furnished and at such
other times as the Trustee may request in writing a list, in such form
and as of such date as the Trustee may reasonably require, of the names
and addresses of Holders.
The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent, Conversion Agent or
co-registrar (if not the Trustee or an affiliate of the Trustee). The
agreement shall implement the provisions of this Indenture that relate
to such agent and the relevant Security. The Company shall notify the
Trustee of the name and address of any such agent. If the Company fails
to maintain a Registrar, Paying Agent or Conversion Agent, it shall
direct the Trustee to act as such and the Trustee shall be entitled to
compensation as agreed to in writing therefor. The Company or an
Affiliate of the Company may act as Paying Agent, Registrar, Conversion
Agent or co-registrar.
The Company initially appoints the Trustee as
Registrar, Conversion Agent and Paying Agent in connection with the
Securities.
(b) REDEMPTION.
The following is hereby added to the Indenture, replacing the
existing Article 3 of the Indenture, with respect to the Debentures only:
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ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.1 RIGHT TO REDEEM; NOTICES TO TRUSTEE.
The Company, at its option, may redeem the Securities
in accordance with paragraph 3 of the Securities and the provisions of
this Indenture. If the Company elects to redeem Securities pursuant to
paragraph 3 of the Securities, it shall notify the Trustee in writing
of the Redemption Date, the Principal of Securities to be redeemed and
the Redemption Price.
The Company shall give the notice to the Trustee
provided for in this Section 3.1 (i) in the case of any redemption of
fewer than all of the Securities, at least 45 days before the
Redemption Date and (ii) in the case of a redemption of all of the
Securities, no later than the date that the Company is required to give
notice to the Holders pursuant to Section 3.3, in each case unless a
shorter notice shall be satisfactory to the Trustee.
SECTION 3.2 SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities held in definitive
form are to be redeemed pursuant to Section 3.1, the Trustee shall
select the definitive Securities to be redeemed pro rata or by lot or
by another method the Trustee considers fair and appropriate (as long
as such method is not prohibited by the rules of any quotation system
or securities exchange on which the Securities are then quoted or
listed). The Trustee shall make the selection at least 35 days, but not
more than 60 days, before the Redemption Date from outstanding
definitive Securities not previously called for redemption. The Trustee
may select for redemption portions of the Principal of Securities that
have denominations larger than $1,000. Securities and portions of them
the Trustee selects shall be in Principals of $1,000 or an integral
multiple of $1,000. Provisions of this Indenture that apply to
definitive Securities called for redemption also apply to portions of
definitive Securities called for redemption. The Trustee shall notify
the Company promptly of the definitive Securities or portions of
definitive Securities to be redeemed.
Any interest in a Security held in global form by and
registered in the name of the Depositary or its nominee to be redeemed
in whole or in part will be redeemed in accordance with the procedures
of the Depositary.
If any Security selected for partial redemption is
converted in part before termination of the conversion right with
respect to the portion of the Security so selected, the converted
portion of such Security shall be deemed to be (to the fullest extent
possible) the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed may be
treated by the Trustee as outstanding for the purpose of such
selection.
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SECTION 3.3 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a
Redemption Date, the Company shall mail a notice of redemption by
first-class mail, postage prepaid, to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be
redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and
Conversion Agent;
(5) that Securities called for redemption may be
converted at any time before the close of business on the fourth
Trading Day prior to the Redemption Date;
(6) that Holders who want to convert Securities must
satisfy the requirements set forth in paragraph 6 of the Securities;
(7) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(8) if fewer than all the outstanding Securities are
to be redeemed, the certificate number and Principals of the particular
Securities to be redeemed;
(9) that Original Issue Discount on Securities called
for redemption will cease to accrue on and after the Redemption Date;
and
(10) the CUSIP number or numbers for the Securities.
The notice if mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not
the Holder receives such notice. In any case, failure to give such
notice by mail or any defect in the notice to the Holder of any
Security designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other
Security.
At the Company's written request delivered to the
Trustee at least 45 days before the Redemption Date, the Trustee shall
give the notice of redemption in the Company's name and at the
Company's expense.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is given, pursuant to
Section 3.3, Securities called for redemption become due and payable on
the Redemption Date and at the Redemption Price stated in the notice
except for Securities which are converted in accordance with the terms
of this Indenture.
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Upon the later of the Redemption Date or the date
such Securities are surrendered to the Paying Agent, such Securities
shall be paid at the Redemption Price stated in the notice.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
Prior to 10:00 a.m. (local time at the place of
payment) on the Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or an Affiliate of the Company is the
Paying Agent, shall segregate and hold in trust) money sufficient to
pay the Redemption Price of all Securities to be redeemed on that date
other than Securities or portions of Securities called for redemption
which prior thereto have been delivered by the Company to the Trustee
for cancellation or have been converted into Common Stock, and on or
after the Redemption Date (unless the Company shall default in the
payment of the Securities at the Redemption Price), Original Issue
Discount on the Securities or portion of Securities called for
redemption shall cease to accrue and such Securities shall cease after
the close of business on the fourth Business Day immediately preceding
the Redemption Date (except in the circumstances provided in Section
3.7, immediately preceding the close of business on the Redemption
Date) to be convertible into Common Stock and on and after the Business
Day immediately preceding the Redemption Date, such Securities shall
cease, except as provided in Section 8.5, to be entitled to any benefit
or security under this Indenture, and the Holders thereof shall have no
right in respect of such Securities except the right to receive the
Redemption Price thereof and unpaid interest up to and including the
Redemption Date. The Paying Agent shall as promptly as practicable
return to the Company any money, with interest, if any, thereon, not
required for that purpose because of conversion of Securities. If such
money is then held by the Company in trust and is not required for such
purpose it shall be discharged from such trust.
SECTION 3.6 SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in
part, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder a new Security in an authorized denomination
equal in Principal to the unredeemed portion of the Security
surrendered.
SECTION 3.7 CONVERSION ARRANGEMENT ON CALL FOR
REDEMPTION.
In connection with any redemption of Securities, the
Company may arrange for the purchase and conversion into Common Stock
of any Securities called for redemption by an agreement with one or
more investment bankers or other purchasers to purchase such Securities
by paying to the Paying Agent in trust for the Holders, prior to 10:00
a.m. (local time at the place of payment) on the Redemption Date, an
amount that, together with any amounts deposited with the Paying Agent
by the Company for the redemption of the Securities, is not less than
the Redemption Price up to and including the Redemption Date of such
Securities. Notwithstanding anything to the contrary contained in this
Article 3, the obligation of the Company to pay the Redemption Price of
such Securities shall be deemed to be satisfied and discharged to the
extent such amount is so paid by such purchasers. If such an agreement
is entered into, any Securities not
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duly surrendered for conversion by the Holders thereof may, at the
option of the Company, be deemed, to the fullest extent permitted
by law, acquired by such purchasers from such Holders and
(notwithstanding anything to the contrary contained in Article 11)
surrendered by such purchasers for conversion, all immediately prior to
the close of business on the Redemption Date, subject to payment of the
above amount as aforesaid. The Paying Agent shall hold and pay to the
Holders whose Securities are selected for redemption any such amount
paid to it in the same manner as it would money deposited with it by
the Company for the redemption of Securities. Without the Paying
Agent's prior written consent, no arrangement between the Company and
such purchasers for the purchase and conversion of any Securities shall
increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Paying Agent as set forth in
this Indenture, and the Company agrees to indemnify the Paying Agent
from, and hold it harmless against, any loss, liability or expense
arising out of or in connection with any such arrangement for the
purchase and conversion of any Securities between the Company and such
purchasers, including the costs and expenses incurred by the Paying
Agent in the defense of any claim or liability arising out of or in
connection with the exercise or performance of any of its powers,
duties, responsibilities or obligations under this Indenture.
SECTION 3.8 PURCHASE OF SECURITIES AT OPTION OF THE
HOLDER.
(a) General. Securities shall be purchased by the
Company pursuant to paragraph 4 of the Securities as of February 21,
2006, February 21, 2011 and February 21, 2016 (each, a "Purchase
Date"), at the purchase price specified therein (each, a "Purchase
Price") at the option of the Holder thereof, upon:
(1) delivery to the Paying Agent by the Holder of a
written notice of purchase (a "Purchase Notice") at any time from the
opening of business on the date that is 20 Business Days prior to a
Purchase Date until the close of business on such Purchase Date,
stating:
(A) if certificated Securities have been issued, the
certificate number of the Security which the Holder will deliver to be
purchased (or, if the Security is not certificated, such other
identification necessary to comply with appropriate DTC procedures);
(B) the portion of the Principal of the Security
which the Holder will deliver to be purchased, which portion must be
$1,000 in Principal or a multiple thereof;
(C) that such Security shall be purchased as of the
Purchase Date pursuant to the terms and conditions specified in
paragraph 4 of the Securities and the provisions of this Indenture; and
(D) if the Company elects, pursuant to a Company
Notice, to pay the Purchase Price to be paid as of such Purchase Date,
in whole or in part, in Common Stock but such portion of the Purchase
Price shall ultimately be payable to such Holder in Cash because any of
the conditions to the payment of the Purchase Price in Common
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Stock are not satisfied prior to or on the Purchase Date, as set forth
in Section 3.8(d), whether such Holder elects (x) to withdraw such
Purchase Notice as to some or all of the Securities to which such
Purchase Notice relates (stating the Principal and certificate numbers
of the Securities as to which such withdrawal shall relate), or (y) to
receive Cash in respect of the entire Purchase Price for all Securities
(or portions thereof) to which such Purchase Notice relates; and
(2) delivery of such Security to the Paying Agent
prior to, on or after the Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent, such delivery being a
condition to receipt by the Holder of the Purchase Price therefor;
provided, however, that such Purchase Price shall be so paid pursuant
to this Section 3.8 only if the Security so delivered to the Paying
Agent shall conform in all respects to the description thereof in the
related Purchase Notice.
If a Holder, in such Holder's Purchase Notice (and in
any written notice of withdrawal of a portion of such Holder's
Securities previously submitted for purchase pursuant to a Purchase
Notice, the portion that remains subject to the Purchase Notice), fails
to indicate such Holder's choice with respect to the election set forth
in clause (D) of Section 3.8(a)(1), such Holder shall be deemed to have
elected to receive Cash in respect of the entire Purchase Price for all
Securities subject to such Purchase Notice in the circumstances set
forth in such clause (D).
The Company shall purchase from the Holder thereof,
pursuant to this Section 3.8, a portion of a Security if the Principal
of such portion is $1,000 or an integral multiple of $1,000. Provisions
of this Indenture that apply to the purchase of all of a Security also
apply to the purchase of such portion of such Security.
Any purchase by the Company contemplated pursuant to
the provisions of this Section 3.8 shall be consummated by the delivery
of the consideration to be received by the Holder promptly following
the later of the Purchase Date and the time of delivery of the
Security.
Notwithstanding anything herein to the contrary, any
Holder delivering to the Paying Agent the Purchase Notice contemplated
by this Section 3.8(a) shall have the right at any time prior to the
close of business on the Purchase Date to withdraw such Purchase Notice
by delivery of a written notice of withdrawal to the Paying Agent in
accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of
the receipt by it of any Purchase Notice or written notice of
withdrawal thereof.
(b) Company's Right to Elect Manner of Payment of
Purchase Price. The Company may elect with respect to any Purchase Date
to pay the Purchase Price in respect of the Securities to be purchased
pursuant to Section 3.8(a) as of such Purchase Date, in U.S. legal
tender ("Cash") or Common Stock, or in any combination of Cash and
Common Stock, subject to the conditions set forth in Sections 3.8(c)
and (d). The Company shall designate, in the Company Notice delivered
pursuant to Section 3.8(e),
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whether the Company will purchase the Securities for Cash or Common
Stock, or, if a combination thereof, the percentages of the Purchase
Price of Securities in respect of which it will pay in Cash and/or
Common Stock; provided that the Company will pay Cash for fractional
interests in shares of Common Stock. For purposes of determining the
existence of potential fractional interests, all Securities subject to
purchase by the Company held by a Holder shall be considered together
(no matter how many separate certificates are to be presented). Each
Holder whose Securities are purchased pursuant to this Section 3.8
shall receive the same percentage of Cash and/or Common Stock in
payment of the Purchase Price for such Securities, except (i) as
provided in Section 3.8(d) with regard to the payment of Cash in lieu
of fractional interests in Common Stock and (ii) in the event that the
Company is unable to purchase the Securities of a Holder or Holders for
Common Stock because any necessary qualifications or registrations of
the Common Stock under applicable federal or state securities laws
cannot be obtained, the Company may purchase the Securities of such
Holder or Holders for Cash. The Company may not change its election
with respect to the consideration (or components or percentages of
components thereof) to be paid once the Company has given its Company
Notice to Holders except pursuant to this Section 3.8(b) or Section
3.8(d).
At least two Business Days before the Company Notice
Date (as defined in Section 3.8(c)), the Company shall deliver an
Officers' Certificate to the Trustee specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 3.8(e),
(iii) if the Company elects to pay the Purchase
Price, or a specified percentage thereof, in Common Stock, that the
conditions to such manner of payment set forth in Section 3.8(d) have
been or will be complied with, and
(iv) whether the Company desires the Trustee to give
the Company Notice required by Section 3.8(e).
(c) Purchase with Cash. At the option of the Company,
the Purchase Price of Securities in respect of which a Purchase Notice
pursuant to Section 3.8(a) has been given, or a specified percentage
thereof, may be paid by the Company with Cash equal to the aggregate
Purchase Price, or such specified percentage thereof, as the case may
be, of such Securities. If the Company elects to purchase Securities
with Cash, a Company Notice as provided in Section 3.8(e) shall be sent
to Holders (and to beneficial owners as required by applicable law) not
less than 20 Business Days prior to the Purchase Date (the "Company
Notice Date").
(d) Payment by Issuance of Common Stock. At the
option of the Company, the Purchase Price of Securities in respect of
which a Purchase Notice pursuant to Section 3.8(a) has been given, or a
specified percentage thereof, may be paid by the Company by the
issuance of a number of shares of Common Stock equal to the quotient
obtained by dividing (i) the amount of Cash to which the Holders would
have
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been entitled had the Company elected to pay all or such specified
percentage, as the case may be, of the Purchase Price of such
Securities in Cash by (ii) the Market Price of a share of Common Stock,
subject to the next succeeding paragraph.
The Company will not issue a fractional share of
Common Stock in payment of the Purchase Price. Instead the Company will
pay Cash for the current market value of the fractional share. The
current market value of a fraction of a share shall be determined by
multiplying the Market Price by such fraction and rounding the product
to the nearest whole cent. It is understood that if a Holder elects to
have more than one Security purchased, the number of shares of Common
Stock shall be based on the aggregate amount of Securities to be
purchased.
If the Company elects to purchase the Securities by
the issuance of shares of Common Stock, a Company Notice as provided in
Section 3.8(e) shall be sent to the Holders (and to beneficial owners
as required by applicable law) not later than the Company Notice Date.
The Company's right to exercise its election to
purchase the Securities pursuant to Section 3.8 through the issuance of
shares of Common Stock shall be conditioned upon:
(i) the Company having given timely Company Notice of
election to purchase all or a specified percentage of the Securities
with Common Stock as provided herein;
(ii) the registration of the shares of Common Stock
to be issued in respect of the payment of the specified percentage of
the Purchase Price under the Securities Act; unless the shares of
Common Stock so issued can be freely resold by the Holder (unless such
Holder is the Company or an Affiliate of the Company) receiving such
shares without registration under the Securities Act;
(iii) any necessary qualification or registration
under applicable state securities laws or the availability of an
exemption from such qualification and registration; and
(iv) the receipt by the Trustee of an Officers'
Certificate and an Opinion of Counsel each stating that (A) the terms
of the issuance of the Common Stock are in conformity with this
Indenture and (B) the shares of Common Stock to be issued by the
Company in payment of the specified percentage of the Purchase Price in
respect of Securities have been duly authorized and, when issued and
delivered pursuant to the terms of this Indenture in payment of the
specified percentage of the Purchase Price in respect of Securities,
will be validly issued, fully paid and nonassessable, and, in the case
of such Officers' Certificate, stating that conditions (i), (ii) and
(iii) above have been satisfied and, in the case of such Opinion of
Counsel, stating that conditions (ii) and (iii) above have been
satisfied.
Such Officers' Certificate shall also set forth the
number of shares of Common Stock to be issued for each $1,000 Principal
of Securities and the Sale Price of
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a share of Common Stock on each Trading Day during the period during
which the Market Price is calculated and ending on the Purchase Date.
If such conditions are not satisfied with respect to a Holder or
Holders prior to or on the Purchase Date and the Company elected to
purchase the Securities to be purchased as of such Purchase Date
pursuant to this Section 3.8 through the issuance of shares of Common
Stock, the Company shall pay the entire Purchase Price in respect of
such Securities of such Holder or Holders in Cash.
The "Market Price" means the average of the Sale
Prices of the Common Stock for the five Trading Day period ending on
the third Business Day prior to the applicable Purchase Date (if the
third Business Day prior to the applicable Purchase Date is a Trading
Day or, if it is not a Trading Day, the five Trading Days ending on the
last Trading Day prior to the third Business Day), appropriately
adjusted to take into account the occurrence, during the period
commencing on the first of such Trading Days during such five Trading
Day period and ending on such Purchase Date, of any event described in
Section 11.7, 11.8 or 11.9; subject, however, to the conditions set
forth in Sections 11.10 and 11.11.
The "Sale Price" of the Common Stock on any date
means the closing per share sale price (or if no closing sale price is
reported the average of the bid and ask prices or, if more than one, in
either case, the average of the average bid and average ask prices) on
such date as reported on the New York Stock Exchange.
(e) Notice of Election. Company's notices of election
to purchase with Cash or Common Stock, or any combination thereof,
shall be sent to the Holders (and to beneficial owners as required by
applicable law) in the manner provided in Section 10.2 at the time
specified in Section 3.8(c) or (d), as applicable (each, a "Company
Notice"). Such Company Notices shall state the manner of payment
elected and shall contain the following information:
In the event the Company has elected to pay a
Purchase Price (or a specified percentage thereof) with Common Stock,
the Company Notice shall:
(1) state that each Holder will receive Common Stock
with a Market Price determined as of a specified date prior to the
Purchase Date equal to such specified percentage of the Purchase Price
of the Securities held by such Holder (except any Cash amount to be
paid in lieu of fractional share); and
(2) set forth the method by which the Company is
required to calculate the Market Price and state that because the
Market Price of Common Stock will be determined prior to the Purchase
Date, the Holders will bear the market risk with respect to the value
of the Common Stock to be received from the date such Market Price is
determined to the Purchase Date.
In any case, each Company Notice shall include a form
of Purchase Notice to be completed by a Holder and shall state:
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(i) the Purchase Price and Conversion Rate;
(ii) the name and address of the Paying Agent and the
Conversion Agent;
(iii) that Securities as to which a Purchase Notice
has been given may be converted only if the applicable Purchase Notice
has been withdrawn in accordance with the terms of this Indenture;
(iv) that Securities must be surrendered to the
Paying Agent to collect payment;
(v) that the Purchase Price for any Security as to
which a Purchase Notice has been given and not withdrawn will be paid
promptly following the later of the Purchase Date and the time of
surrender of such Security as described in (iv);
(vi) the procedures the Holder must follow under this
Section 3.8;
(vii) briefly, the conversion rights of the
Securities; and
(viii) the procedures for withdrawing a Purchase
Notice (including, without limitation, for a conditional withdrawal
pursuant to the terms of Section 3.8(a)(1)(D) or Section 3.10).
At the Company's request, the Trustee shall give the
Company Notice in the Company's name and at the Company's expense;
provided, however, that, in all cases, the text of the Company Notice
shall be prepared by the Company.
(f) Covenants of the Company. All shares of Common
Stock delivered upon conversion or purchase of the Securities shall be
newly issued shares or treasury shares, shall be fully paid and
nonassessable and shall be free from preemptive rights and free of any
lien or adverse claim.
The Company shall use its best efforts to list or
cause to have quoted all such shares of Common Stock on each United
States over-the-counter or other domestic market on which the Common
Stock is then quoted or national securities exchange on which the
Common Stock is then listed. Upon determination of the actual number of
shares of Common Stock to be delivered pursuant to this Section 3.8,
the Company shall notify the securities exchange or quotation systems
on which the Common Stock is then listed or quoted and disseminate the
number of shares of Common Stock to be issued on the Company's website
or through an alternative public medium.
(g) Procedure upon Purchase. On the Business Day
following the Purchase Date, the Company shall deposit with the Paying
Agent (A) Cash (in respect of a Cash purchase under Section 3.8(c) or
for fractional interests, as applicable), or (B) shares of Common
Stock, or a combination of (A) and (B), as applicable, sufficient to
pay the aggregate Purchase Price in respect of the Securities to be
purchased pursuant to this Section 3.8. As soon as practicable after
the Purchase Date, the Company shall
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deliver to each Holder entitled to receive Common Stock, through the
Paying Agent, a certificate for the number of full shares of Common
Stock, as applicable, issuable in payment of such Purchase Price and
Cash in lieu of any fractional interests. The Person in whose name the
certificate for Common Stock is registered shall be treated as a holder
of record following the Purchase Date. Subject to Section 3.8(d), no
payment or adjustment will be made for dividends on the Common Stock
the record date for which occurred on or prior to the Purchase Date.
(h) Taxes. If a Holder of a Security is paid in
Common Stock, the Company shall pay any documentary, stamp or similar
issue or transfer tax due on such issue of shares of Common Stock.
However, the Holder shall pay any such tax which is due because the
Holder requests the shares of Common Stock to be issued in a name other
than the Holder's name. The Paying Agent may refuse to deliver the
certificates representing the Common Stock being issued in a name other
than the Holder's name until the Paying Agent receives a sum sufficient
to pay any tax which will be due because the shares of Common Stock are
to be issued in a name other than the Holder's name. Nothing herein
shall preclude any income tax withholding required by law or
regulations.
SECTION 3.9 REDEMPTION AT OPTION OF THE HOLDER UPON A
FUNDAMENTAL CHANGE.
(a) If a Fundamental Change shall occur at any time
prior to February 21, 2021, each Holder of Securities shall have the
right, at such Holder's option, to require the Company to redeem any or
all of such Holder's Securities for Cash on the date that is 30 days
after the date of the Company's notice of such Fundamental Change (the
"Fundamental Change Redemption Date") (or if such date is not a
Business Day, the next succeeding Business Day). The Securities will be
redeemable in integral multiples of $1,000 of Principal. The Company
shall redeem such Securities at a price (the "Fundamental Change
Redemption Price") equal to the Issue Price plus accrued Original Issue
Discount up to and including the Fundamental Change Redemption Date
(or, if the Securities are converted to interest-bearing debentures
following a Tax Event pursuant to Section 11.6 and paragraph 6(b) of
the Securities, a price equal to the Restated Principal plus accrued
interest from the date the Company exercised its right to convert the
Securities up to and including the Fundamental Change Redemption Date).
Payment for Securities surrendered for purchase (and not withdrawn)
prior to the expiration of the 30-day period referenced in the first
sentence of this subsection (a) shall be made promptly following the
Fundamental Change Repurchase Date. No Securities may be redeemed at
the option of the Holders as a result of a Fundamental Change if there
has occurred and is continuing an Event of Default (other than a
default in the payment of the Fundamental Change Redemption Price with
respect to such Securities).
(b) The Company, or at its request (which must be
received by the Trustee at least three Business Days prior to the date
the Trustee is requested to give such notice as described below) the
Trustee in the name of and at the expense of the Company, shall mail to
the Trustee and all Holders of record of the Securities a notice (a
"Fundamental Change Redemption Notice") of the occurrence of a
Fundamental Change
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and of the redemption right arising as a result thereof on or before
the tenth day after the occurrence of such Fundamental Change.
(c) For a Security to be so redeemed at the option of
the Holder, the Paying Agent must receive such Security with the form
entitled "Option to Elect Redemption Upon a Fundamental Change" on the
reverse thereof duly completed, together with such Security duly
endorsed for transfer, on or before the 30th day after the date of such
notice (or if such 30th day is not a Business Day, the next succeeding
Business Day).
SECTION 3.10 EFFECT OF PURCHASE NOTICE OR FUNDAMENTAL
CHANGE REDEMPTION NOTICE.
Upon receipt by the Company of the Purchase Notice or
Fundamental Change Redemption Notice specified in Section 3.8(a) or
Section 3.9(b), as applicable, the Holder of the Security in respect of
which such Purchase Notice or Fundamental Change Redemption Notice, as
the case may be, was given shall (unless such Purchase Notice or
Fundamental Change Redemption Notice is withdrawn as specified in the
following two paragraphs) thereafter be entitled to receive solely the
Purchase Price or Fundamental Change Redemption Price, as the case may
be, with respect to such Security. Such Purchase Price or Fundamental
Change Redemption Price shall be paid to such Holder promptly following
the later of (x) the Purchase Date or the Fundamental Change Redemption
Date, as the case may be, with respect to such Security (provided the
conditions in Section 3.8(a) or Section 3.9(c), as applicable, have
been satisfied) and (y) the time of delivery of such Security to the
Paying Agent by the Holder thereof in the manner required by Section
3.8(a) or Section 3.9(c), as applicable. Securities in respect of which
a Purchase Notice or Fundamental Change Redemption Notice, as the case
may be, has been given by the Holder thereof may not be converted for
shares of Common Stock on or after the date of the delivery of such
Purchase Notice (or Fundamental Change Redemption Notice, as the case
may be), unless such Purchase Notice (or Fundamental Change Redemption
Notice, as the case may be) has first been validly withdrawn as
specified in the following two paragraphs.
A Purchase Notice or Fundamental Change Redemption
Notice, as the case may be, may be withdrawn by means of a written
notice of withdrawal delivered to the office of the Paying Agent at any
time prior to the close of business on the Purchase Date or the
Fundamental Change Redemption Date, as the case may be, to which it
relates specifying:
(1) if certificated Securities have been issued, the
certificate number of the Security in respect of which such notice of
withdrawal is being submitted,
(2) the Principal of the Security with respect to
which such notice of withdrawal is being submitted, and
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(3) the Principal, if any, of such Security which
remains subject to the original Purchase Notice or Fundamental Change
Redemption Notice, as the case may be, and which has been or will be
delivered for purchase or redemption by the Company.
A written notice of withdrawal of a Purchase Notice
may be in the form of (i) a conditional withdrawal contained in a
Purchase Notice pursuant to the terms of Section 3.8(a)(1)(D) or (ii) a
conditional withdrawal containing the information set forth in Section
3.8(a)(1)(D) and the preceding paragraph and contained in a written
notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.
There shall be no purchase of any Securities pursuant
to Section 3.8 (other than through the issuance of Common Stock in
payment of the Purchase Price, including Cash in lieu of any fractional
shares) or redemption pursuant to Section 3.9 if there has occurred
(prior to, on or after, as the case may be, the giving, by the Holders
of such Securities, of the required Purchase Notice or Fundamental
Change Redemption Notice, as the case may be) and is continuing an
Event of Default (other than a default in the payment of the Purchase
Price or Fundamental Change Redemption Price, as the case may be, with
respect to such Securities).
SECTION 3.11 DEPOSIT OF PURCHASE PRICE OR FUNDAMENTAL
CHANGE REDEMPTION PRICE.
On or before the Business Day following a Purchase
Date or a Fundamental Change Redemption Date, as the case may be, the
Company shall deposit with the Trustee or with the Paying Agent (or, if
the Company or an Affiliate of the Company is acting as the Paying
Agent, shall segregate and hold in trust as provided in Section 2.6) an
amount of money and/or securities, if permitted hereunder, sufficient
to pay the aggregate Purchase Price or Fundamental Change Redemption
Price, as the case may be, of all the Securities or portions thereof
which are to be purchased as of such Purchase Date or Fundamental
Change Redemption Date, as the case may be.
SECTION 3.12 SECURITIES PURCHASED IN PART.
Any Security that is to be purchased or redeemed only
in part shall be surrendered at the office of the Paying Agent (with,
if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing) and the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in aggregate
Principal equal to, and in exchange for, the portion of the Principal
of the Security so surrendered which is not purchased or redeemed.
SECTION 3.13 COVENANT TO COMPLY WITH SECURITIES LAWS
UPON PURCHASE OF SECURITIES.
In connection with any purchase or redemption of
Securities under Section 3.8 or 3.9 hereof, the Company shall (i)
comply with Rule 13e-4 (which term, as
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used herein, includes any successor provision thereto) under the
Exchange Act, if applicable, (ii) file the related Schedule TO (or any
successor schedule, form or report) under the Exchange Act, if
applicable, and (iii) otherwise comply with all Federal and state
securities laws so as to permit the rights and obligations under
Section 3.8 and 3.9 to be exercised in the time and in the manner
specified in Section 3.8 and 3.9.
SECTION 3.14 REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall return to the
Company any cash or shares of Common Stock (in the case of the Purchase
Price that remain unclaimed as provided in paragraph 12 of the
Securities, together with interest or dividends, if any, thereon, held
by them for the payment of a Purchase Price or Fundamental Change
Redemption Price, as the case may be; provided, however, that to the
extent that the aggregate amount of cash or shares of Common Stock
deposited by the Company pursuant to Section 3.11 exceeds the aggregate
Purchase Price or Fundamental Change Redemption Price, as the case may
be, of the Securities or portions thereof which the Company is
obligated to purchase as of the Purchase Date or Fundamental Change
Redemption Date, as the case may be, then promptly after the Business
Day following the Purchase Date or Fundamental Change Redemption Date,
as the case may be, the Trustee and the Paying Agent shall return any
such excess to the Company together with interest or dividends, if any,
thereon.
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SECTION 3.15 MODIFICATION TO FUNDAMENTAL CHANGE
DEFINITIONS.
In the case of a reclassification, change, consolidation,
merger, combination, sale or conveyance to which Section 11.15 applies, in which
the Common Stock of the Company is changed or exchanged as a result into the
right to receive stock, securities or other property or assets (including Cash),
which includes shares of common stock of another person that are, or upon
issuance will be, traded on a United States national securities exchange or
approved for trading on an established automated over-the-counter trading market
in the United States and such shares of common stock constitute at the time such
change or exchange becomes effective in excess of 50% of the aggregate fair
market value of such stock, securities or other property or assets (including
Cash) into which the Common Stock of the Company is or is to be changed or
exchanged for (as determined by the Company, which determination shall be
conclusive and binding), then the person 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 Trustee a supplemental indenture (accompanied
by an Opinion of Counsel that such supplemental indenture complies with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture) modifying the provisions of this Indenture relating to the right of
holders of the Securities to cause the Company to repurchase the Securities in
the event of a Fundamental Change, including, without limitation, the applicable
provisions of this Article 3 and the definitions of Common Stock and Fundamental
Change, as appropriate, as determined in good faith by the Company (which
determination shall be conclusive and binding), to make such provisions apply to
such other person if different from the Company and the common stock issued
thereby (in lieu of the Company and the Common Stock of the Company).
(c) EVENTS OF DEFAULT.
The following is hereby added to the Indenture in substitution
for the existing Section 6.1 and 6.2 thereof, with respect to the Debentures
only:
SECTION 6.1 EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of the
Principal Amount, Issue Price (or, if the Securities have been
converted to interest-bearing Securities following a Tax Event pursuant
to Section 11.6, the Restated Principal Amount), accrued Original Issue
Discount (or, if the Securities have been converted to interest-bearing
Securities following a Tax Event, accrued and unpaid interest), accrued
Additional Interest, if any, Redemption Price, Purchase Price or a
Fundamental Change Redemption Price on any Security when the same
becomes due and payable at its Stated Maturity, upon redemption, upon
declaration, when due for purchase by the Company or otherwise
(provided that in the case of a default in the payment of Additional
Interest, such default in payment of Additional Interest continues for
a period of 30 days;
(2) the Company fails to comply with any of its
agreements or covenants in the Securities or this Indenture (other than
those referred to in clause (1)
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above) and such failure continues for 30 days after receipt by the
Company of a Notice of Default;
(3) the Company or any Restricted Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or any Restricted
Subsidiary or its or such Restricted Subsidiary's debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any Restricted Subsidiary
or any substantial part of the property of the Company or any
Restricted Subsidiary, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it or any
Restricted Subsidiary, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they
become due; or
(4) an involuntary case or other proceeding shall be
commenced against the Company or any Restricted Subsidiary seeking
liquidation, reorganization or other relief with respect to it or any
Restricted Subsidiary or its or such Restricted Subsidiary's debts
under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any Restricted
Subsidiary or any substantial part of the property of the Company or
any Restricted Subsidiary, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of ninety
(90) consecutive days.
A Default under clause (2) above is not an Event of
Default until the Trustee notifies the Company, or the Holders of at
least 25% in aggregate Principal Amount of the Securities at the time
outstanding notify the Company and the Trustee, of the Default and the
Company does not cure such Default (and such Default is not waived)
within the time specified in clause (2) above after actual receipt of
such notice (a "Notice of Default"). Any such notice must specify the
Default, demand that it be remedied and state that such notice is a
Notice of Default.
SECTION 6.2 ACCELERATION.
If an Event of Default (other than an Event of
Default specified in Section 6.1(3) or (4) with respect to the Company)
occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in aggregate Principal Amount of the
Securities, voting separately as a class, at the time outstanding by
notice to the Company and the Trustee, may declare the Issue Price and
accrued Original Issue Discount up to and including the date of
declaration (and Additional Interest, if any) on all the Securities to
be immediately due and payable. Upon such a declaration, such Issue
Price and accrued Original Issue Discount shall become and be due and
payable immediately; provided, however, that if an Event of Default
specified in Section 6.1(2) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in
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aggregate Principal Amount of the Securities, together with all other
holders of Securities of of each series of Securities issued under this
Indenture, voting together as a class, at the time outstanding by
notice to the Company and the Trustee, may declare the Issue Price and
accrued Original Issue Discount up to and including the date of
declaration (and Additional Interest, if any) on all the Securities to
be immediately due and payable . If an Event of Default specified in
Section 6.1(3) or (4) with respect to the Company occurs and is
continuing, the Issue Price and accrued Original Issue Discount (and
Additional Interest, if any) on all the Securities shall become and be
immediately due and payable without any declaration or other act on the
part of the Trustee or any Holders. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding,
by notice to the Company and the Trustee (and without notice to any
other Holder), may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment
of the Issue Price and accrued Original Issue Discount (and Additional
Interest, if any) that have become due solely as a result of
acceleration and if all amounts due to the Trustee under Section 7.7
have been paid. No such rescission shall affect any subsequent or other
Default or Event of Default or impair any consequent right.
(d) AMENDMENTS.
The following is hereby added to the Indenture in substitution
for the existing Section 9.2 thereof, with respect to the Debentures only:
SECTION 9.2 WITH CONSENT OF HOLDERS.
The Company and the Trustee, with the written consent
of the Holders of at least a majority in aggregate Principal Amount of
the Securities at the time outstanding, may amend this Indenture or the
Securities. However, without the consent of each Holder affected, an
amendment or supplement to this Indenture or the Securities may not:
(1) make any change to the Principal Amount of
Securities whose Holders must consent to an amendment;
(2) make any change to the manner or rate of accrual
in connection with Original Issue Discount or interest, if any, reduce
the rate of interest referred to in paragraph 2 of the Securities or
extend the time for payment of Original Issue Discount or interest, if
any, on any Security;
(3) reduce the Principal Amount or the Issue Price of
or extend the Stated Maturity of any Security;
(4) reduce the Redemption Price, Purchase Price or
Fundamental Change Redemption Price of any Security;
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(5) reduce the rate of, or make any change in the
manner of paying, Additional Interest;
(6) make any Security payable in money or securities
other than that stated in the Security; (7) make any change in Section
6.4, Section 6.7 or this Section 9.2, except to increase any such
percentage;
(8) make any change that adversely affects the right
to convert any Security;
(9) make any change that adversely affects the right
to require the Company to purchase the Securities, or the right to
require the Company to redeem the Securities upon a Fundamental Change,
in accordance with the terms thereof and this Indenture; or
(10) change any obligation of the Company to maintain
an office or agency in the places and for the purposes specified in
this Indenture.
It shall not be necessary for the consent of the
Holders under this Section 9.2 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent approves
the substance thereof.
After an amendment under this Section 9.2 becomes
effective, the Company shall mail to each Holder a notice briefly
describing the amendment.
(e) CONVERSION.
The following is hereby added to the Indenture immediately
following Article 10, as a new Article 11, with respect to the Debentures only:
ARTICLE 11
CONVERSION
SECTION 11.1 CONVERSION PRIVILEGE.
A Holder of a Security may convert such Security for
Common Stock at any time during the period stated in paragraph 6 of the
Securities. The number of shares of Common Stock issuable upon
conversion of a Security per $1,000 of Principal thereof (the
"Conversion Rate") shall be that set forth in paragraph 6 in the
Securities, subject to adjustment as herein set forth.
A Holder may convert a portion of the Principal of a
Security if the portion is $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of a Security.
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SECTION 11.2 CONVERSION PROCEDURE.
To convert a Security, a Holder must satisfy the
requirements in paragraph 6 of the Securities. The date on which the
Holder of Securities satisfies all those requirements is the conversion
date (the "Conversion Date"). As soon as practicable after the
Conversion Date the Company shall deliver to the Holder, through the
Conversion Agent, a certificate for the number of full shares of Common
Stock issuable upon the conversion and Cash in lieu of any fractional
share determined pursuant to Section 11.3. The Person in whose name the
certificate is registered shall be treated as the stockholder of record
on and after the Conversion Date; provided, however, that no surrender
of a Security on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the Person or Persons
entitled to receive the shares of Common Stock upon such conversion as
the record holder or holders of such shares of Common Stock on such
date, but such surrender shall be effective to constitute the Person or
Persons entitled to receive such shares of Common Stock as the record
holder or holders thereof for all purposes at the close of business on
the next succeeding day on which such stock transfer books are open;
such conversion shall be at the Conversion Rate in effect on the date
that such Security shall have been surrendered for conversion, as if
the stock transfer books of the Company had not been closed. Upon
conversion of a Security, such Person shall no longer be a Holder of
such Security.
No payment on the Securities or adjustment of the
Conversion Rate will be made for dividends on or other distributions
with respect to any Common Stock except as provided in this Article 11.
On conversion of a Security, that portion of accrued Original Issue
Discount attributable to the period from the Issue Date of the Security
to the Conversion Date with respect to the converted Security shall not
be canceled, extinguished or forfeited, but rather shall be deemed to
be paid in full to the Holder thereof through delivery of the Common
Stock (together with the Cash payment, if any, in lieu of fractional
shares) in exchange for the Security being converted pursuant to the
provisions hereof.
If a Holder converts more than one Security at the
same time, the number of shares of Common Stock issuable upon the
conversion shall be based on the total Principal of the Securities
converted.
Upon surrender of a Security that is converted in
part, the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder, a new Security in an authorized denomination
equal in Principal to the unconverted portion of the Security
surrendered.
If the last day on which a Security may be converted
is a Legal Holiday in a place where a Conversion Agent is located, the
Security may be surrendered to that Conversion Agent on the next
succeeding day that it is not a Legal Holiday.
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SECTION 11.3 FRACTIONAL SHARES.
The Company will not issue a fractional share of
Common Stock upon conversion of a Security. Instead the Company will
deliver Cash for the current market value of the fractional share. The
current market value of a fractional share shall be determined to the
nearest 1/10,000th of a share by multiplying the last reported sale
price (determined as set forth in the definition of Current Market
Price) on the last Trading Day prior to the Conversion Date of a full
share by the fractional amount and rounding the product to the nearest
whole cent.
SECTION 11.4 TAXES ON CONVERSION.
If a Holder converts a Security, the Company shall
pay any documentary, stamp or similar issue or transfer tax due on the
issue of shares of Common Stock upon the conversion. However, the
Holder shall pay any such tax which is due because the Holder requests
the shares to be issued in a name other than the Holder's name. The
Conversion Agent may refuse to deliver the certificates representing
the Common Stock being issued in a name other than the Holder's name
until the Conversion Agent receives a sum sufficient to pay any tax
which will be due because the shares are to be issued in a name other
than the Holder's name. Nothing herein shall preclude any tax
withholding required by law or regulations.
SECTION 11.5 COMPANY TO PROVIDE STOCK.
The Company shall, prior to issuance of any
Securities hereunder, and from time to time as may be necessary,
reserve out of its authorized but unissued Common Stock a sufficient
number of shares of Common Stock to permit the conversion of the
Securities.
All shares of Common Stock delivered upon conversion
of the Securities shall be newly issued shares or treasury shares,
shall be duly and validly issued and fully paid and nonassessable and
shall be free from preemptive rights and free of any lien or adverse
claim.
The Company covenants that if any shares of Common
Stock to be provided for the purpose of conversion of Securities
hereunder require registration with or approval of any governmental
authority under any federal or state law before such shares may be
validly issued upon conversion, the Company will in good faith and as
expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
The Company further covenants that if at any time the
Common Stock shall be quoted on the Nasdaq National Market or any other
automated quotation system or listed on the NYSE or any other national
or regional securities exchange, the Company will, if permitted by the
rules of such automated quotation system or exchange, list and keep
listed, so long as the Common Stock shall be so listed on such
automated quotation system or exchange, all shares of Common Stock
issuable upon conversion of the Securities; provided, however, that if
the rules of such automated quotation system or
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exchange permit the Company to defer the listing of such Common Stock
until the first conversion of the Securities into Common Stock in
accordance with the provisions of this Indenture, the Company covenants
to list such Common Stock issuable upon conversion of the Securities in
accordance with the requirements of such automated quotation system or
exchange at such time.
SECTION 11.6 CONVERSION TO SEMIANNUAL COUPON UPON A
TAX EVENT.
(a) If at any time after the date (the "Tax Event
Date") of the occurrence of a Tax Event the Company exercises its
option (the date of such exercise, (the "Option Exercise Date") to pay
interest in lieu of Original Issue Discount, interest in lieu of future
Original Issue Discount shall accrue at the rate of 4.0% per annum on a
Principal per Security (the "Restated Principal") equal to the Issue
Price plus Original Issue Discount accrued through the Option Exercise
Date (as calculated by the Company and set forth in an Officer's
Certificate delivered to the Trustee) and shall be payable semiannually
on February 21 and August 21 of each year (each an "Interest Payment
Date") to holders of record of the Securities at the close of business
on the February 6 and August 6, respectively (each a "Regular Record
Date"), immediately proceeding such Interest Payment Date. Interest
will be computed on the basis of a 360-day year comprised of twelve
30-day months and will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the
Option Exercise Date. Interest on any Security that is payable on any
Interest Payment Date shall be paid to the Person in whose name that
Security is registered at the close of business on the Regular Record
Date.
(b) Within 15 days of the occurrence of a Tax Event,
the Company shall mail a written notice of such Tax Event by first
class mail to the Trustee and within 15 days of its exercise of such
option the Company shall mail a written notice of the Option Exercise
Date by first-class mail to the Trustee and the Holders of the
Securities. From and after the Option Exercise Date, (i) the Company
shall be obligated to pay at Stated Maturity, in lieu of the Principle
Amount of a Security, the Restated Principal thereof and (ii) "Issue
Price and accrued Original Issue Discount," "Issue Price plus Original
Issue Discount" or similar words, as used herein, shall mean Restated
Principal plus accrued and unpaid interest with respect to any
Security. Securities authenticated and delivered after the Option
Exercise Date may, and shall if required by the Trustee, bear a
notation in a form approved by the Trustee as to the conversion of the
Securities to semiannual coupon debentures.
(c) Interest on any Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date
shall be paid to the person in whose name that Security is registered
at the close of business on the Regular Record Date for such interest
at the office or agency of the Company maintained for such purpose.
Each installment of interest on any Security shall be paid in same-day
funds by transfer to an account maintained by the payee located inside
the United States. In the case of a permanent Global Security, in
global form, interest payable on any Interest Payment Date will be paid
to the Depositary, with respect to that portion of such permanent
Global Security, in global form, held for its account by Cede & Co. for
the purpose of
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permitting such party to credit the interest received by it in respect
of such permanent Security in global form to the accounts of the
beneficial owners thereof.
(d) Except as otherwise specified with respect to the
Security, any interest on any Security that is payable, but is not
punctually paid or duly provided for, within 30 days following on any
Interest Payment Date (herein called "Defaulted Interest", which term
shall include any accrued and unpaid interest that has accrued on such
defaulted amount in accordance with paragraph 2 of the Securities),
shall forthwith cease to be payable to the registered Holder thereof on
the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of
any Defaulted Interest to the persons in whose names the Securities are
registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security
and the date of the proposed payment (which shall not be less than 20
days after such notice is received by the Trustee), and at the same
time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit on or prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit
of the persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Securities at his address as it
appears on the list of Securityholders maintained pursuant to Section
2.5 not less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the persons in whose names the Securities are
registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any
Defaulted Interest on the Securities in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section
11.6 and Section 2.7, each Security delivered under this Indenture upon
registration of transfer of or in
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exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such
other Security.
(e) In the event that the Company exercises its
option following a Tax Event, any Security or portion thereof
surrendered for conversion during the period from the close of business
on the Regular Record Date to the opening of business on the
immediately following Interest Payment Date (unless such Security or
portion thereof being converted shall have been called for redemption
on a date in such period) must be accompanied by a payment, in funds
acceptable to the Company, of an amount of interest otherwise payable
on such Interest Payment Date on the amount of principal being
converted.
Interest on any Security that is payable on any
Interest Payment Date shall be paid to the Person in whose name that
Security is registered at the close of business on the Regular Record
Date.
SECTION 11.7 ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.
In case the Company shall (i) pay a dividend, or make
a distribution, in shares of its Common Stock, on its Common Stock,
(ii) subdivide its outstanding Common Stock into a greater number of
shares, or (iii) combine its outstanding Common Stock into a smaller
number of shares, the Conversion Rate in effect immediately prior
thereto shall be adjusted so that the holder of any Security thereafter
surrendered for conversion shall be entitled to receive the number of
shares of Common Stock which such Holder would have owned or have been
entitled to receive after the occurrence of any of the events described
above had such Security been converted immediately prior to the
occurrence of such event. If any dividend or distribution of the type
described in clause (i) above is not so paid or made, the Conversion
Rate shall again be adjusted to the Conversion Rate which would then be
in effect if such dividend as distribution had not been declared. An
adjustment made pursuant to this Section 11.7 shall become effective
immediately after the record date in the case of a dividend and still
shall become effective immediately after the effective date in the case
of a subdivision or combination.
SECTION 11.8 ADJUSTMENT FOR RIGHTS ISSUE.
In case the Company shall issue rights or warrants to
all holders of its Common Stock entitling them (for a period expiring
within 45 days after the record date mentioned below) to subscribe for
or purchase Common Stock at a price per share less than the Current
Market Price per share of Common Stock at the record date for the
determination of stockholders entitled to receive such rights or
warrants, the Conversion Rate in effect immediately prior thereto shall
be adjusted so that the same shall equal the Conversion Rate determined
by multiplying the Conversion Rate in effect immediately prior to the
date of issuance of such rights or warrants by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants plus the number of
additional shares of Common Stock offered to holders of Common Stock
for subscription or purchase, and of which the denominator shall be the
number of shares of Common Stock outstanding on the date of
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issuance of such rights or warrants plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares
so offered would purchase at such Current Market Price. Such adjustment
shall be made successively whenever any such rights or warrants are
issued, and shall become effective immediately after the opening of
business on the day following the record date for the determination of
the stockholders entitled to receive such rights or warrants. To the
extent that shares of Common Stock are not delivered after the
expiration of such rights or warrants, the Conversion Rate shall be
readjusted to the Conversion Rate which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made
on the basis of delivery of only the number of shares of Common Stock
actually delivered. If such rights or warrants are not so issued, the
Conversion Rate shall again be adjusted to be the Conversion Rate which
would then be in effect if such record date for the determination of
stockholders entitled to receive such rights or warrants had not been
fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price of such Common Stock, and in determining
the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received by the Company
for such rights or warrants, the value of such consideration, if other
than Cash, to be determined by the Board of Directors.
SECTION 11.9 ADJUSTMENT FOR OTHER DISTRIBUTIONS.
(a) In case the Company shall distribute to all
holders of its Common Stock (excluding any distribution in connection
with the liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary) any shares of any class of capital stock of
the Company (other than Common Stock), of evidences of indebtedness of
the Company or of assets (other than cash) or rights or warrants to
subscribe for or purchase any of its securities (excluding those
referred to in Section 11.8 hereof) (any of the foregoing hereinafter
in this Section 11.9(a) called the "Distributed Securities"), then, the
Conversion Rate shall be adjusted so that the same shall equal the
Conversion Rate determined by multiplying the Conversion Rate in effect
immediately prior to the date of such distribution by a fraction of
which the numerator shall be the Current Market Price per share of the
Common Stock on the record date mentioned below, and the denominator
shall be the Current Market Price per share of the Common Stock on such
record date less the fair market value on such record date (as
determined by the Board of Directors of the Company, whose
determination shall be conclusive, and described in a certificate filed
with the Trustee) of the Distributed Securities so distributed
applicable to one share of Common Stock. Such adjustment shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such distribution. Notwithstanding the
foregoing, in the event that the then fair market value (as so
determined) of the portion of the Distributed Securities so distributed
applicable to one share of Common Stock is equal to or greater than the
Current Market Price of the Common Stock on the record date, in lieu of
the foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion the amount of
Distributed Securities such Holder would have received had such Holder
converted each Security immediately prior to such record date. In the
event that such distribution is not so paid or made, the Conversion
Rate shall again be adjusted
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to the Conversion Rate which would then be in effect if such
distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of
this Section 11.9(a) by reference to the actual or when issued trading
market for any securities, it must in doing so consider the prices in
such market over the same period used in computing the Current Market
Price of the Common Stock.
Notwithstanding the foregoing provisions of this
Section 11.9(a), no adjustment shall be made thereunder for any
distribution of Distributed Securities if the Company makes proper
provision so that each Holder of a Security who converts such Security
(or any portion thereof) after the record date for such distribution
shall be entitled to receive upon such conversion, in addition to the
shares of Common Stock issuable upon such conversion, the amount and
kind of Distributed Securities that such Holder would have been
entitled to receive if such Holder had, immediately prior to such
record date, converted such Security for Common Stock; provided that,
with respect to any Distributed Securities that are convertible,
exchangeable or exercisable, the foregoing provision shall only apply
to the extent (and so long as) the Distributed Securities receivable
upon conversion of such Security would be convertible, exchangeable or
exercisable, as applicable, without any loss of rights or privileges
for a period of at least 60 days following conversion of such Security.
(b) In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock Cash
(excluding any quarterly Cash dividend on the Common Stock to the
extent the aggregate Cash dividend per share of Common Stock in any
fiscal quarter does not exceed the greater of (A) the amount per share
of Common Stock of the next preceding quarterly Cash dividend on the
Common Stock to the extent such preceding quarterly dividend did not
require any adjustment of the Conversion Rate pursuant to this Section
11.9(b) (as adjusted to reflect subdivisions or combinations of the
Common Stock), and (B) 3.75% of the average of the last reported sales
price of the Common Stock (determined as provided in the definition of
Current Market Price) during the ten Trading Days immediately prior to
the date of declaration of such dividend and (), then, in such case,
unless the Company elects to reserve such Cash for distribution to the
holders of the Securities upon the conversion of the Securities so that
any such holder converting Securities will receive upon such conversion
in addition to the shares of Common Stock to which such holder is
entitled, the amount of Cash which such holder would have received if
such holder had, immediately prior to the record date for such
distribution of Cash, converted its Securities for Common Stock, the
Conversion Rate shall be increased so that the same shall equal the
Conversion Rate determined by multiplying the Conversion Rate in effect
immediately prior to the record date by a fraction of which the
numerator shall be such Current Market Price of the Common Stock and
the denominator shall be the Current Market Price of the Common Stock
on the record date less the amount of Cash so distributed (and not
excluded as provided above) applicable to one share of Common Stock,
such increase to be effective immediately prior to the opening of
business on the day following the record date; provided, however, that
in the event that the portion of the Cash so distributed applicable to
one share of Common Stock is equal to or greater than the Current
Market Price of the Common Stock on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion the amount of
Cash
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such Holder would have received had such Holder converted each Security
on the record date. If such dividend or distribution is not so paid or
made, the Conversion Rate shall again be adjusted to be the Conversion
Rate which would then be in effect if such dividend or distribution had
not been declared. If any adjustment is required to be made as set
forth in this Section 11.9(b) as a result of a distribution that is a
quarterly dividend, such adjustment shall be based upon the amount by
which such distribution exceeds the amount of the quarterly Cash
dividend permitted to be excluded pursuant hereto. If an adjustment is
required to be made as set forth in this Section 11.9(b) above as a
result of a distribution that is not a quarterly dividend, such
adjustment shall be based upon the full amount of the distribution.
(c) In case a tender or exchange offer made by the
Company or any Subsidiary of the Company for all or any portion of the
Common Stock shall expire and such tender or exchange offer shall
involve the payment by the Company or such Subsidiary of consideration
per share of Common Stock having a fair market value (as determined by
the Board of Directors, whose determination shall be conclusive, and
described in a resolution of such Board of Directors at the last time
(the "Expiration Time") tenders or exchanges may be made pursuant to
such tender or exchange offer (as it shall have been amended)) that
exceeds the Current Market Price of the Common Stock on the Trading Day
next succeeding the Expiration Time, the Conversion Rate shall be
increased so that the same shall equal the Conversion Rate determined
by multiplying the Conversion Rate in effect immediately prior to the
Expiration Time by a fraction of which the numerator shall be the sum
of (x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to holders of Common Stock based on the
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares of Common Stock validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares
deemed so accepted up to any such maximum, being referred to as the
"Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time, and the denominator shall be
the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Expiration Time multiplied by the
Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such increase to become effective
immediately prior to the opening of business on the day following the
Expiration Time. In the event that the Company is obligated to purchase
shares pursuant to any such tender or exchange offer, but the Company
is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Rate
shall again be adjusted to be the Conversion Rate which would then be
effect if such tender or exchange offer had not been made.
(d) In case of a tender or exchange offer by a Person
other than the Company or any Subsidiary for an amount which increases
the offeror's ownership of Common Stock to more than 25% of the Common
Stock outstanding and shall involve the payment by such Person of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive, and described in a resolution of the Board of Directors at
the last time (the
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"Tender Expiration Time") tenders or exchanges may be made pursuant to
such tender or exchange offer (as it shall have been amended)) at the
Tender Expiration Time that exceeds the Current Market Price of the
Common Stock on the Trading Day next succeeding the Tender Expiration
Time, and in which, as of the Tender Expiration Time the Board of
Directors is not recommending rejection of the offer, the Conversion
Rate shall be increased so that the same shall equal the Conversion
Rate determined by multiplying the Conversion Rate in effect
immediately prior to the Tender Expiration Time by a fraction of which
the numerator shall be the sum of (x) the fair market value (determined
as aforesaid) of the aggregate consideration payable to holders of
Common Stock based on the acceptance (up to an maximum specified in the
terms of the tender or exchanged offer) of all shares of Common Stock
validly tendered or exchanged and not withdrawn as of the Tender
Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Tender Purchased Shares") and (y) the product
of the number of shares of Common Stock outstanding (less any Tender
Purchased Shares) on the Tender Expiration Time and the Current Market
Price of the Common Stock on the Trading Day next succeeding the Tender
Expiration Time and the denominator shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares)
on the Tender Expiration Time multiplied by the Current Market Price of
the Common Stock on the Trading Day next succeeding the Tender
Expiration Time, such increase to become effective immediately prior to
the opening of business on the day following the Tender Expiration
Time. In the event that such Person is obligated to purchase shares
pursuant to any such tender or exchange offer, but such Person is
permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Rate
shall again be adjusted to be the Conversion Rate which would then be
in effect if such tender or exchange offer had not been made.
Notwithstanding the foregoing, the adjustment described in this Section
11.9(d) shall not be made if, as of the Tender Expiration Time, the
offering documents with respect to such offer disclose a plan or
intention to cause the Company to engage in any transaction described
in Article 5.
SECTION 11.10 WHEN ADJUSTMENT MAY BE DEFERRED.
No adjustment in the Conversion Rate need be made
unless the adjustment would require an increase or decrease of at least
1% in the Conversion Rate. Any adjustments that are made shall be
carried forward and taken into account any subsequent adjustment.
All calculations under this Article 11 shall be made
to the nearest cent or to the nearest 1/10,000th of a share, as the
case may be.
SECTION 11.11 WHEN NO ADJUSTMENT REQUIRED.
No adjustment need be made for rights to purchase
Common Stock pursuant to a Company plan for reinvestment of dividends
or interest.
No adjustment need be made for a change in the par
value of the Common Stock.
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To the extent the Securities become convertible into
Cash, assets, property or securities (other than capital stock of the
Company), no adjustment need be made thereafter as to the cash, assets,
property or such securities. Interest will not accrue on the Cash.
SECTION 11.12 NOTICE OF ADJUSTMENT.
Whenever the Conversion Rate is adjusted, the Company
shall promptly mail to Holders a notice of the adjustment. The Company
shall file with the Trustee and the Conversion Agent such notice. The
certificate shall, absent manifest error, be conclusive evidence that
the adjustment is correct. Neither the Trustee nor any Conversion Agent
shall be under any duty or responsibility with respect to any such
certificate except to exhibit the same to any Holder desiring
inspection thereof.
SECTION 11.13 VOLUNTARY INCREASE.
The Company may make such increases in the Conversion
Rate, in addition to those required by Sections 11.7, 11.8 and 11.9, as
the Board of Directors considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase Common
Stock resulting from any dividend or distribution of stock (or rights
to acquire stock) or from any event treated as such for income tax
purposes. To the extent permitted by applicable law, the Company may
from time to time increase the Conversion Rate by any amount for any
period of time if the period is at least 20 days, the increase is
irrevocable during the period and the Board of Directors shall have
made a determination that such increase would be in the best interests
of the Company, which determination shall be conclusive. Whenever the
Conversion Rate is so increased, the Company shall mail to Holders and
file with the Trustee and the Conversion Agent a notice of such
increase. The Company shall mail such notice at least seven days before
the date the increased Conversion Rate takes effect. The notice shall
state the increased Conversion Rate and the period it will be in
effect.
SECTION 11.14 NOTICE OF CERTAIN TRANSACTIONS.
If:
(1) the Company makes any distribution or dividend
that would require an adjustment in the Conversion Rate pursuant to
Section 11.7, 11.8 or 11.9; or
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 11.15; or
(3) there is a liquidation, dissolution or winding-up
of the Company;
then the Company shall mail to Holders and file with the Trustee and
the Conversion Agent a notice stating the proposed record date for a
dividend or distribution or the proposed effective date of a
subdivision, combination, reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up. The Company
shall file and
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mail the notice at least 15 days before such date. Failure to file or
mail the notice or any defect in it shall not affect the validity of
the transaction.
SECTION 11.15 EFFECT OF RECLASSIFICATION,
CONSOLIDATION, MERGER OR SALE.
If any of the following events occur, namely (i) any
reclassification or change of outstanding shares of Common Stock (other
than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or
combination), (ii) any consolidation, merger or combination of the
Company with another corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property
or assets (including Cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of the properties and
assets of the Company as, or substantially as, an entirety to any other
corporation as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets
(including Cash) with respect to or in exchange for such Common Stock,
then the Company or the successor or purchasing corporation, as the
case may be, shall execute with the Trustee a supplemental indenture,
providing that each Security shall be convertible into the kind and
amount of shares of stock and other securities or property or assets
(including Cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance by a holder of a
number of shares of Common Stock issuable upon conversion of such
Securities immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance. Such
supplemental indenture shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for
in this Article.
The Company shall cause notice of the execution of
such supplemental indenture to be mailed to each Holder of Securities,
at such Holder's address appearing on the Security register provided
for in Section 2.3 of this Indenture.
The above provisions of this Section shall similarly
apply to successive reclassifications, consolidations, mergers,
combinations, and sales.
If this Section applies, neither Section 11.7, 11.8
nor 11.9 applies.
SECTION 11.16 COMPANY DETERMINATION FINAL.
Any determination that the Company or the Board of
Directors must make pursuant to Section 11.3, 11.7, 11.8, 11.9, 11.10,
11.11, 11.15 or 11.18 is conclusive.
SECTION 11.17 TRUSTEE'S ADJUSTMENT DISCLAIMER.
The Trustee has no duty to determine when an
adjustment under this Article 11 should be made, how it should be made
or what it should be. The Trustee has no duty to determine whether a
supplemental indenture under Section 11.15 need be entered into or
whether any provisions of any supplemental indenture are correct. The
Trustee shall not be accountable for and makes no representation as to
the validity or
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value of any securities or assets issued upon conversion of Securities.
The Trustee shall not be responsible for the Company's failure to
comply with this Article 11, and shall not be deemed to have knowledge
of any adjustment unless and until it shall have received a notice of
adjustment pursuant to Section 11.12. Each Conversion Agent shall have
the same protection under this Section 11.17 as the Trustee.
SECTION 11.18 SIMULTANEOUS ADJUSTMENTS.
In the event that this Article 11 requires
adjustments to the Conversion Rate under more than one of Sections
11.7, 11.8, 11.9(a) or 11.9(b), and the record dates for the
distributions giving rise to such adjustments shall occur on the same
date, then such adjustments shall be made by applying, first, the
provisions of Section 11.9(a), second, the provisions of Section
11.9(b), third the provisions of Section 11.7 and, fourth, the
provisions of Section 11.8.
SECTION 11.19 SUCCESSIVE ADJUSTMENTS.
After an adjustment to the Conversion Rate under this
Article 11, any subsequent event requiring an adjustment under this
Article 11 shall cause an adjustment to the Conversion Rate as so
adjusted.
SECTION 11.20 RIGHTS ISSUED IN RESPECT OF COMMON
STOCK ISSUED UPON CONVERSION.
Notwithstanding any other provision hereof, in the
event that the Company implements a stockholders' rights plan, such
rights plan shall provide that upon conversion of the Securities the
Holders will receive, in addition to the Common Stock issuable upon
such conversion, such rights whether or not such rights have separated
from the Common Stock at the time of such conversion. In the event that
provision is made that a Holder of Securities will receive such rights
upon conversion, whether or not the rights have separated from the
Common Stock at the time of such conversion, no adjustment shall be
made to the Conversion Rate pursuant to this Article 11 as a result of
such rights distribution.
Rights or warrants distributed by the Company to all
holders of Common Stock entitling the holders thereof to subscribe for
or purchase shares of the Company's capital stock (either initially or
under certain circumstances), which rights or warrants, until the
occurrence of a specified event or events ("Trigger Event"):
(i) are deemed to be transferred with such shares of
Common Stock,
(ii) are not exercisable, and
(iii) are also issued in respect of future issuances
of Common Stock,
shall not be deemed distributed for purposes of Section 11.9(a) until
the occurrence of the earliest Trigger Event. In addition, in the event
of any distribution of rights or warrants, or any Trigger Event with
respect thereto, that shall have resulted in an adjustment to the
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Conversion Rate under Section 11.9(a), (1) in the case of any such
rights or warrants which shall all have been redeemed or repurchased
without exercise by any holders thereof, the Conversion Rate shall be
readjusted upon such final redemption or repurchase to give effect to
such distribution or Trigger Event, as the case may be, as though it
were a cash distribution, equal to the per share redemption or
repurchase price received by a holder of Common Stock with respect to
such rights or warrants (assuming such holder had retained such rights
or warrants), made to all holders of Common Stock as of the date of
such redemption or repurchase, and (2) in the case of any such rights
or warrants all of which shall have expired without exercise by any
holder thereof, the Conversion Rate shall be readjusted as if such
issuance had not occurred.
SECTION 11.21 GENERAL CONSIDERATIONS.
Whenever successive adjustments to the Conversion
Rate are called for pursuant to this Article 11, such adjustments shall
be made to the Current Market Price or the conversion rate adjustment
provisions of Sections 11.7, 11.8, 11.9 and 11.18 as may be necessary
or appropriate to effectuate the intent of this Article 11 and to avoid
unjust or inequitable results as determined in good faith by the Board
of Directors.
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ARTICLE THREE
MISCELLANEOUS
SECTION 3. (a) RATIFICATION OF INDENTURE. As supplemented by
this Supplemental Indenture, the Indenture is in all respects ratified and
confirmed and the Indenture as so supplemented by this Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
(b) CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Supplemental Indenture by any of the provisions of the
Trust Indenture Act, such required provisions shall control.
(c) EFFECT OF HEADINGS. The article and section headings
herein are included for convenience only and shall not affect the construction
hereof.
(d) COUNTERPARTS. This Supplemental Indenture may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
(e) SEVERABILITY. In case any provision of this Supplemental
Indenture or in the Debentures shall be found invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
(f) BENEFITS OF SUPPLEMENTAL INDENTURE. Nothing in this
Supplemental Indenture or in the Debentures, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Supplemental Indenture.
(g) ACCEPTANCE OF TRUSTS. The Bank of New York hereby accepts
the trusts in this Supplemental Indenture declared and provided, upon the terms
and conditions herein and in the Indenture set forth.
(h) GOVERNING LAW. This Supplemental Indenture and each
Debenture issued hereunder shall be deemed to be a contract made under the laws
of the State of New York, and for all purposes shall be construed in accordance
with the laws of said State.
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IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the date first above written.
ARROW ELECTRONICS, INC.
By /s/ Robert E. Klatell
-------------------------------
Title: Executive Vice President
THE BANK OF NEW YORK
By /s/ Michael C. Daly
-------------------------------
Title: Michael C. Daly
Assistant Vice President
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STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and
for said state, on this day personally appeared Robert E. Klatell, known to me
to be the persons and officers whose names are subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said ARROW
ELECTRONICS, INC., a New York corporation, and that they executed the same as
the act of said corporation for the purposes and consideration therein
expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 21st day of
February, 2001.
/s/ Deborah A. Hughes
_____________________________
Notary Public
Deborah A. Hughes
_____________________________
Printed Name of Notary Public
My commission expires: DEBORAH A. HUGHES
Notary Public, State of New York
_____________________________ No. 24-4755914
Qualified to Kings County
Certificate filed in New York County
Commission Expires 2/28/01
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and
for said state, on this day personally appeared Michael C. Daly and
___________________, known to me to be the persons and officers whose names are
subscribed to the foregoing instrument and acknowledged to me that the same was
the act of the said THE BANK OF NEW YORK, a national banking association, and
that they executed the same as the act of said national banking association for
the purposes and consideration therein expressed, and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 21st day of
February, 2001.
/s/ William J. Cassels
_____________________________
Notary Public
_____________________________
Printed Name of Notary Public
My commission expires: WILLIAM J. CASSELS
Notary Public, State of New York
_____________________________ No. 01CA5027729
Qualified in Bronx County
Commission Expires May 16, 2002
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