EXHIBIT 4.1
FORD MOTOR COMPANY
No. 1 CUSIP No. 345370CB4
6.50% JUNIOR SUBORDINATED CONVERTIBLE DEBENTURE
DUE JANUARY 15, 2032
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FORD MOTOR COMPANY, a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to FORD MOTOR COMPANY CAPITAL TRUST II,
or registered assigns, the principal sum of Five Billion One Hundred Fifty Four
Million Six Hundred Thirty-Nine Thousand One Hundred Seventy-Six United States
Dollars ($5,154,639,176) on January 15, 2032, and to pay interest thereon from
January 30, 2002 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, quarterly in arrears on January 15, April
15, July 15, and October 15 of each year, subject to deferral as set forth
herein, commencing April 15, 2002, at the rate of 6.50% per annum, plus
Compounded Interest, if any, until the principal hereof is paid or made
available for payment and, (to the extent that the payment of such interest
shall be legally enforceable) at the rate of 6.50% per annum, compounded
quarterly, on any overdue principal and premium and on any overdue installment
of interest. The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly interest period for which interest is
computed, the amount of interest payable will be computed on the basis of the
actual number of days elapsed in such a 30-day month. In the event that any
Interest Payment Date is not a business day, then payment of interest payable on
such date will be made on the next succeeding day which is a business day (and
without any interest or other payment in respect of any such delay), except
that, if such business day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding business day, in each case with the
same force and effect as if made on such date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the close of business
on the fifteenth day (whether or not a business day), next preceding the
relevant Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which this Security may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any, on) and any such
interest on this Security will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, the City and State of
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that, at the option of the Company, payment of interest may
be made (i) by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register or (ii) by wire transfer of
immediately available funds to an account maintained by the Person entitled
thereto as specified in the Security Register, provided that proper transfer
instructions have been received by the Company by the Regular Record Date; and
provided further, that the payment of principal will only be made upon surrender
of this Security to the Trustee. Notwithstanding the foregoing, so long as the
owner and record holder of this Security is Ford Motor Company Capital Trust II,
the payment of the principal of (and premium, if any, on) and interest
(including Compounded Interest, if any) on this Security will be made at such
place and to such account of the Trust as may be designated by the Property
Trustee (as hereinafter defined).
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder of this Security, by his acceptance of
the same, hereby waives all notice of the acceptance of the subordination
provisions contained herein and in the Indenture by each holder of Senior
Indebtedness, whether now outstanding or hereafter incurred, and waives reliance
by each such Holder upon said provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as though fully set forth at this place.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this Security to be signed
by its Chairman of the Board, its President, one of its Executive Vice
Presidents, Group Vice Presidents or Vice Presidents, its Treasurer or one of
its Assistant Treasurers, and by its Secretary or one of its Assistant
Secretaries, manually or in facsimile, and a facsimile of its corporate seal to
be imprinted hereon.
FORD MOTOR COMPANY
By
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Name: Ann Marie Petach
Title: Assistant Treasurer
By:
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Name: Peter Sherry, Jr.
Title: Assistant Secretary
[Corporate Seal]
Attest:
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
JPMORGAN CHASE BANK,
as Trustee
By:
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Authorized Signatory
Dated: January 30, 2002
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FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or Type Name and Address including Zip Code of Assignee)
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the within Security and all rights, thereunder, hereby irrevocably constituting
and appointing
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attorney to transfer said Security on the books of the Company, with full power
of substitution in the premises.
Dated:
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NOTE: The signature to this assignment must correspond with the name as
written upon the face of the within Security in every particular
without alteration or enlargement or any change whatsoever and must
be guaranteed.
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REVERSE OF SECURITY
FORD MOTOR COMPANY
6.50% JUNIOR SUBORDINATED CONVERTIBLE DEBENTURE
DUE JANUARY 15, 2032
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of January 30, 2002, (herein called the
"Indenture"), among the Company and JPMorgan Chase Bank, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture with respect to the series of which this Security is a part), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the Securities of the series designated on
the face hereof, whose issuance on the date hereof is limited in aggregate
principal amount to $5,154,639,176.
The Securities of this series are subject to the defeasance and
covenant defeasance provisions set forth in Article Fourteen of the Indenture.
1. Optional Redemption. Except as provided in the next paragraph, the
Securities may not be redeemed by the Company prior to January 15, 2007. The
Securities of this series are subject to redemption upon not less than 30 nor
more than 60 days' notice (provided that, so long as any Preferred Securities
(as defined herein) are Outstanding, the Company shall give such notice no later
than at such time so as to allow the Property Trustee (as defined herein) to
comply with Section 4.02(b) of the Declaration (as defined herein)) by mail, at
any time on or after January 15, 2007, as a whole or in part, at the election of
the Company (an "Optional Redemption"), at the Redemption Prices indicated for
the twelve-month periods beginning on January 15 in each of the following years
(expressed as a percentage of the principal amount of the Security being
redeemed), together with any accrued but unpaid interest, including Compounded
Interest, if any, on the portion of the Security being redeemed, to the
Redemption Date.
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Year Redemption Price
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2007 103.26%
2008 102.60%
2009 101.96%
2010 101.30%
2011 100.66%
2012, and thereafter 100.00%
The Company may not redeem any Securities in part unless all accrued
and unpaid interest thereon (including Compounded Interest, if any) has been
paid in full on all Outstanding Securities. The Company may not, in any case,
redeem the Securities unless all accrued and unpaid interest thereon has been
paid in full on all Outstanding Securities through the last Interest Payment
Date before and including the Redemption Date.
2. Special Redemption. If, at any time, a Tax Event (as defined below)
or an Investment Company Event (as defined below) shall occur and be continuing,
the Company shall have the right at any time, upon not less than 30 nor more
than 60 days' notice (provided that, so long as any Preferred Securities are
Outstanding, the Company shall give such notice no later than at such time so as
to allow the Property Trustee to comply with Section 4.02(b) of the
Declaration), (i) in the case of an Investment Company Event, to redeem the
Securities in whole but not in part, and (ii) in the case of a Tax Event, to
redeem the Securities in whole or in part, in each case for cash, within 90 days
following the occurrence of such Tax or Investment Company Event, as the case
may be, at a Redemption Price equal to the principal amount of such Security
plus any accrued and unpaid interest, including Compounded Interest, if any, to
the date fixed for such redemption; provided that, if a Tax Event shall occur
and be continuing, and the Company shall not have (i) redeemed all of the
Securities pursuant to this paragraph or (ii) dissolved the Ford Motor Company
Capital Trust II, a statutory business trust formed under the laws of the State
of Delaware (the "Trust"), pursuant to Section 9.02(b) of the Amended and
Restated Declaration of Trust of the Trust, dated January 30, 2002 (the
"Declaration of Trust"), the Company shall pay from time to time to the Trust
(and its permitted successors and assigns under the Declaration of Trust) for so
long as the Trust (or its permitted successor or assignee) is the registered
Holder of the Securities, such additional amounts (the "Additional Sums") as may
be necessary in order that the amount of distributions (including any Additional
Amounts (as defined in the Declaration of Trust)) then due and payable by the
Trust on the trust preferred securities issued by the Trust (the "Preferred
Securities") that at such time remain outstanding in accordance with the terms
thereof shall not be reduced as a result of any additional taxes, duties or
other governmental charges to which the Trust has become subject from time to
time as a result of a Tax Event. Whenever in this Security or in the Indenture
there is a reference in any context to the payment of principal of or interest
on the Securities, such mention shall be deemed to include mention of the
payments of the Additional Sums provided for in this paragraph to the extent
that, in such context, Additional Sums are, were or
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would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provision hereof shall not be construed as excluding Additional Sums in those
provisions hereof where such express mention is not made; provided that the
extension of an interest payment period pursuant to this Security shall not
extend the payment of any Additional Sums that may be due and payable during
such interest payment period.
"Tax Event" means the receipt by the property trustee of the Trust (the
"Property Trustee"), on behalf of the Trust, of an Opinion of Counsel, rendered
by a law firm having a recognized national tax and securities law practice
(which opinion shall not have been rescinded by such law firm), to the effect
that, as a result of 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
affecting taxation, or as a result of any official administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or such pronouncement or decision is announced
on or after the date of issuance of any Preferred Securities, there is more than
an insubstantial risk in each case after the date hereof that (i) the Trust is,
or will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income received or accrued on the Securities, (ii)
interest payable by the Company on the Securities is not, or within 90 days of
the date thereof will not be, deductible by the Company, in whole or in part,
for United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days of the date thereof, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the Property Trustee,
on behalf of the Trust, of an Opinion of Counsel, rendered by a law firm having
a recognized national securities law practice (which opinion shall not have been
rescinded by such law firm), to the effect that, as a result of the occurrence
of a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, government agency or
regulatory authority on or after the date of original issuance of the Preferred
Securities, there is more than an insubstantial risk that the Trust is or will
be considered an "investment company" that is required to be registered under
the Investment Company Act of 1940, as amended.
3. Redemption Procedures. If the Securities are only partially redeemed
by the Company pursuant to an Optional Redemption or as a result of a Tax Event
as described above, the Securities will be redeemed pro rata or by lot or by any
other method as the Trustee shall deem fair and appropriate. Notwithstanding the
foregoing, if a partial redemption of the Securities would result in the
delisting of the Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are then listed, the
Company shall not be permitted to effect such partial redemption and will only
redeem the Securities as a whole.
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In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
4. Event of Default. If an Event of Default with respect to Securities
of this series shall occur and be continuing, the principal of the Securities of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.
5. Conversion. Subject to and upon compliance with the provisions
contained herein, the Securities are convertible, at the option of the Holder,
at any time before the close of business on January 15, 2032 (or, in the case of
a Security called for redemption, prior to the close of business on the business
day prior to the corresponding Redemption Date) into fully paid and
nonassessable shares of common stock of the Company, par value $.01 per share
("Common Stock"), at an initial conversion rate of 2.8249 shares of Common Stock
for each $50 in aggregate principal amount of Securities (equivalent to a
conversion price (as adjusted the "Conversion Price") of $17.70 per share of
Common Stock), subject to adjustment as set forth herein. A Holder may convert
any portion of the principal amount of Securities into that number of fully paid
and nonassessable shares of Common Stock obtained by dividing the principal
amount of Securities to be converted by the Conversion Price. All calculations
under this paragraph shall be made to the nearest cent or 1/100 of a share, as
the case may be. In case a Security or portion thereof is called for redemption,
such conversion right in respect of the Security or portion so called shall
expire at the close of business on the corresponding Redemption Date, unless the
Company defaults in making the payment due upon redemption.
The Company shall reserve, free from preemptive rights, out of its
authorized but unissued shares, sufficient shares of Common Stock to provide for
the conversion of the Securities from time to time as such Securities are
presented for conversion; provided that nothing contained herein shall be
construed to preclude the Company from satisfying its obligations in respect of
the conversion of Securities by delivery of repurchased shares of Common Stock
which are held in the treasury of the Company.
6. Conversion Procedures. In order to convert all or a portion of the
Securities, the Holder thereof shall deliver to EquiServe Trust Company, N.A.,
as conversion agent, or such other conversion agent as the Company may appoint
(the "Conversion Agent") an irrevocable Notice of Conversion (as defined below)
setting forth the principal amount of Securities to be converted, together with
the name or names, if other than the Holder, in which the shares of Common Stock
should be issued upon conversion and, if such Securities are definitive
securities, surrender to the Conversion Agent the Securities to be converted,
duly endorsed or assigned to the Company or in blank. In addition, a holder of
Preferred Securities may exercise its right under the Declaration of Trust to
convert such Preferred Securities into Common Stock by delivering to the
Conversion Agent an irrevocable Notice of Conversion setting forth the
information called for by the preceding sentence and
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directing the Conversion Agent (i) to exchange such Preferred Security for a
portion of the Securities held by the Trust (at an exchange rate of $50
principal amount of Securities for each Preferred Security) and (ii) to
immediately convert such Securities, on behalf of such holder, into Common Stock
of the Company pursuant to the conversion provisions hereof and, if such
Preferred Securities are in definitive form, surrendering such Preferred
Securities, duly endorsed or assigned to the Company or in blank. So long as any
Preferred Securities are outstanding, the Trust shall not convert any Securities
except pursuant to a Notice of Conversion delivered to the Conversion Agent by a
holder of Preferred Securities. Unless the shares of Common Stock issuable on
conversion are to be issued in the same name as the name in which the Securities
so to be converted are registered, the Securities surrendered for conversion
shall be accompanied by instruments of transfer, in form satisfactory to the
Company, duly executed by the Holder or such Holder's duly authorized attorney
(or the holder of Preferred Securities or such holder's duly authorized
attorney, as the case may be) and an amount sufficient to pay any transfer or
similar tax (or evidence reasonably satisfactory to the Company demonstrating
that such taxes have been paid). "Notice of Conversion" means either (i) the
notice to be given by a holder of the Securities to the Conversion Agent
directing the Conversion Agent to exchange such Securities (or a portion
thereof) for Common Stock or (ii) the notice to be given by a holder of
Preferred Securities to the Conversion Agent directing the Conversion Agent to
exchange such Preferred Securities for Securities and to convert such Securities
into Common Stock on behalf of such holder, as the case may be.
If a Security is surrendered after the close of business on any Regular
Record Date and prior to opening of business on the corresponding Interest
Payment Date, then, notwithstanding such conversion, the interest payable on
such Interest Payment Date will be paid in cash to the Person in whose name the
Security is registered at the close of business on such Regular Record Date, and
(other than a Security called for redemption on a redemption date occurring
after such record date and prior to such interest payment date), when so
surrendered for conversion, the Security must be accompanied by payment of an
amount equal to the interest payable on such Security on such Interest Payment
Date. A Holder of Securities on a Regular Record Date who (or whose transferee)
tenders any such Securities for conversion into shares of Common Stock on the
corresponding Interest Payment Date will receive the interest payable by the
Company on such Securities on such date, and the converting Holder need not
include payment of the amount of such interest upon surrender of Securities for
conversion. Except as provided above, the Company shall make no payment or
allowance for unpaid interest, whether or not in arrears, on converted
Securities or for interest on the shares of Common Stock issued upon such
conversion.
As promptly as practicable after delivery to the Conversion Agent of
the Notice of Conversion, the Company shall issue and shall deliver at the
office of the Conversion Agent, unless otherwise directed by the Holder in the
Notice of Conversion, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Securities, together
with the cash payment, if any, in lieu of any fraction of any share to the
Person or Persons
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entitled to receive the same. The Conversion Agent shall deliver such
certificate or certificates to such Person or Persons.
Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which the Notice of Conversion shall
have been delivered to the Conversion Agent (the "Conversion Date"), and the
Person or Persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares represented thereby at
such time on such date and such conversion shall be at the Conversion Price in
effect at such time on such date, unless the stock transfer books of the Company
shall be closed on that date, in which event such Person or Persons shall be
deemed to have become such holder or holders of record at the close of business
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Notice of Conversion shall have been delivered to the Conversion Agent. All
shares of Common Stock delivered upon conversion of the Securities will upon
delivery be duly and validly issued and fully paid and nonassessable.
No fractional shares or scrip representing fractions of shares of
Common Stock will be issued upon conversion of the Securities. Instead of any
fractional interest in a share of Common Stock that would otherwise be
deliverable upon the conversion of a Security, the Company shall pay to the
Conversion Agent an amount in cash (computed to the nearest cent) equal to the
same fraction of the Closing Price (as defined below) of such fractional
interest on the Conversion Date, or, if such day is not a day on which any
securities are traded on the national securities exchange or quotation system
used to determine such Closing Price (a "Trading Day"), on the next Trading Day,
and the Conversion Agent in turn will make such payment, if any, to the Holder
of the Securities or the holder of record of the Preferred Securities so
converted. "Closing Price" with respect to any securities on any day shall mean
the closing sale price, regular way, on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices,
regular way, in each case on the New York Stock Exchange, or, if such security
is not then listed or admitted to trading on such Exchange, on the principal
national securities exchange or quotation system on which such security is
quoted or listed or admitted to trading or, if not quoted or listed or admitted
to trading on any national securities exchange or quotation system, the average
of the closing bid and asked prices of such security on the over-the-counter
market on the date in question as reported by the National Quotation Bureau
Incorporated, or a similarly generally accepted reporting service or, if not so
available, in such manner as furnished by any New York Stock Exchange member
firm selected from time to time by the Board of Directors of the Company for
that purpose or a price determined in good faith by the Board of Directors of
the Company.
The Company's delivery upon conversion of the fixed number of shares of
Common Stock into which the Securities are convertible (together with the cash
payment, if any, in lieu of fractional shares) shall be deemed to satisfy the
Company's obligation to pay the principal amount at maturity of the proportion
of
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the Securities so converted and any unpaid interest (including Compounded
Interest, if any) accrued on such Securities at the time of such conversion.
In the event of the conversion of this Security in part only, a new
Security or Securities of this series for the unconverted portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
In effecting the conversion transactions described herein, the
Conversion Agent is acting as agent of the holders of Preferred Securities (in
the exchange of Preferred Securities for Securities) and as agent of the Holders
of Securities (in the conversion of Securities into Common Stock), as the case
may be, directing it to effect such conversion transactions. The Conversion
Agent is hereby authorized (i) to exchange Securities held by Trust from time to
time for Preferred Securities in connection with the conversion of such
Preferred Securities in accordance with the conversion provisions hereof and
(ii) to convert all or a portion of the Securities into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
conversion provisions hereof and to deliver to the Trust a new Security or
Securities for any resulting unconverted principal amount.
7. Conversion Price Adjustments. The Conversion Price shall be adjusted
(without duplication) from time to time as follows:
(a) In case the Company shall, while any of the Securities are
outstanding, (i) pay a dividend or make a distribution on its Common Stock in
shares of its Common Stock, (ii) subdivide its outstanding Common Stock into a
greater number of shares, (iii) combine its outstanding Common Stock into a
smaller number of shares, or (iv) issue any shares of capital stock by
reclassification of its Common Stock, the Conversion Price in effect immediately
prior thereto shall be adjusted so that the Holder of any Securities thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Common Stock of the Company which such Holder would have owned or have been
entitled to receive immediately after the happening of any of the events
described above had such Securities been converted immediately prior to the
happening of such event or the record date therefor, whichever is earlier. An
adjustment made pursuant to this Section 7 (a) shall become effective
immediately after the close of business on the record date in the case of a
dividend or other distribution (except as provided below) and shall become
effective immediately after the close of business on the effective date in the
case of a subdivision, combination or reclassification (or immediately after the
record date if a record date shall have been established for such event).
(b) In case the Company shall issue, while any of the Securities are
outstanding (i) rights or warrants to all holders of 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 (as defined below) per share of Common Stock at the record
date for the determination of shareholders entitled to receive such rights or
warrants or (ii) shares of Common Stock or securities exercisable for (including
rights or warrants other than those referred to in (i) above and Section 7 (c)
below) or exchangeable or
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convertible into shares of Common Stock at a price per share (or having an
exercise, exchange or conversion price per share) less than the Current Market
Price per share of Common Stock as of such record date, then in each such case
the Conversion Price in effect immediately prior thereto shall be adjusted to
equal the price determined by multiplying (I) the Conversion Price in effect
immediately prior to the date of issuance of such rights, warrants or shares of
Common Stock (or securities exercisable for or exchangeable or convertible into
shares of Common Stock) by (II) a fraction, the numerator of which shall be the
sum of (A) the number of shares of Common Stock outstanding on the date of
issuance of such rights, warrants or shares of Common Stock (or securities
exercisable for or exchangeable or convertible into shares of Common Stock)
(without giving effect to any such issuance) and (B), in the case of (i) above,
the number of shares which the aggregate proceeds from the exercise of such
rights or warrants for Common Stock or, in the case of (ii) above, the number of
shares which the aggregate consideration receivable by the Company for the total
number of shares of Common Stock (or securities exercisable for or exchangeable
or convertible into shares of Common Stock) so issued would purchase at such
Current Market Price, and the denominator of which shall be the sum of (A) the
number of shares of Common Stock outstanding on the date of issuance of such
rights, warrants or shares of Common Stock (or securities exercisable for or
exchangeable or convertible into Common Stock) (without giving effect to any
such issuance) and (B), in the case of (i) above, the number of additional
shares of Common Stock offered for subscription or purchase or, in the case of
(ii) above, the number of shares of Common Stock so issued or into which the
exercisable, exchangeable or convertible securities may be exercised, exchanged
or converted. Such adjustment shall be made successively whenever any such
rights, warrants or shares of Common Stock (or securities exercisable for or
exchangeable or convertible into Common Stock) are issued, and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants or, in the case of the
issuance of Common Stock after the date of issuance thereof (or in the case of
securities exercisable for or exchangeable or convertible into shares of Common
Stock, the date on which holders may first exercise, exchange or convert the
same in accordance with the respective terms thereof). In determining whether
any rights or warrants entitle the holders of Common Stock to subscribe for or
purchase shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of shares of Common Stock (or
securities exercisable for or exchangeable or convertible into shares of Common
Stock), there shall be taken into account any consideration received by the
Company upon issuance and upon exercise of such rights or warrants or upon
issuance of shares of Common Stock (or securities exercisable for or
exchangeable or convertible into shares of Common Stock), the value of such
consideration, if other than cash, to be determined in good faith by the Board
of Directors of the Company. The foregoing notwithstanding, no adjustment shall
be made pursuant to this Section 7 (b) as a result of the issuance or sale of
shares of Common Stock by the Company at a cash price (without deducting from
such consideration any commissions, fees or expenses payable in connection
therewith) not less than ninety-nine percent of the Current Market Price of the
Common Stock on the Trading Day immediately preceding the date of a binding
contract with respect to such sale or, if no such contract has been entered
into, the last Current
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Market Price of Common Stock on the Trading Day immediately preceding the date
of the issuance of such Common Stock.
(c) In case the Company shall distribute to all holders of its Common
Stock any shares of capital stock of the Company (other than Common Stock),
evidences of its indebtedness or assets (including securities but excluding (i)
dividends or distributions paid exclusively in cash, (ii) any rights or warrants
referred to in Section 7 (b)(i) above or, (iii) distributions of cash that would
otherwise constitute a Fundamental Change (as defined herein) and be reflected
in a resulting adjustment to the Conversion Price as provided in Section 8
hereof (any of the foregoing being hereinafter in this subparagraph (c) called
the "Distributed Assets"), then in each such case, unless the Company elects to
reserve shares or other units of such Distributed Assets 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 the Common Stock to which such holder is entitled, the amount and
kind of such Distributed Assets which such Holder would have received if such
Holder had, immediately prior to the record date for the distribution of the
Distributed Assets, converted his or her Securities into Common Stock (such
election to be based upon a determination by the Board of Directors of the
Company that such reservation will not materially adversely affect the interests
of any Holder of Securities in any such reserved Distributed Assets), the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying (I) the Conversion Price in effect immediately prior
to the close of business on the record date for the determination of
shareholders entitled to receive such distribution by (II) a fraction, the
numerator of which shall be the Current Market Price per share of the Common
Stock on such record date (the "Reference Date") less the then fair market value
on the Reference Date (as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive) of the portion of the
Distributed Assets so distributed applicable to one share of Common Stock, and
the denominator of which shall be the Current Market Price per share of the
Common Stock on the Reference Date. Such adjustment shall become effective
immediately, except as provided herein, after the close of business on the
Reference Date. If the Board of Directors determines the fair market value of
any distribution for purposes of this Section 7 (c) by reference to the actual
or when issued trading market for any securities comprising such distribution,
it must, in doing so, consider the prices in such market over the same period
used in computing the Current Market Price per share of Common Stock. For
purposes of this Section 7 (c), any dividend or distribution that includes
shares of Common Stock or rights or warrants to subscribe for or purchase shares
of Common Stock shall be deemed instead to be (i) a dividend or distribution of
the evidence of indebtedness, shares of capital stock, cash or assets other than
such shares of Common Stock or such rights or warrants (making any reduction of
the Conversion Price required by this Section 7 (c)) immediately followed by
(ii) a dividend or distribution of such shares of Common Stock or such rights or
warrants (making any further reduction of the Conversion Price required by
Section 7 (a) or (b)), except that (A) the Reference Date of such dividend or
distribution as defined in this subparagraph shall be substituted as "the record
date in the case of a dividend or other distribution" and "the record date for
the
10
determination of stockholders entitled to receive such rights or warrants"
within the meaning of subparagraphs (a) and (b) and (B) any shares of Common
Stock included in such dividend or distribution shall not be deemed outstanding
for purposes of calculating any adjustment of the Conversion Price in Section 7
(a).
In case the Company shall, by dividend or otherwise, declare or make a
distribution on its Common Stock referred to in the immediately preceding
paragraph of this Section 7 (c) (including, without limitation, dividends or
distributions referred to in the last sentence thereof), the Holder of the
Securities, upon the conversion thereof subsequent to the close of business on
the date fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the Conversion Price adjustment
in respect of such distribution, shall also be entitled to receive for each
share of Common Stock into which the Securities are converted, the portion of
the Distributed Assets applicable to one share of Common Stock; provided that,
at the election of the Company with respect to all Holders so converting, the
Company may, in lieu of distributing to such Holder any portion of such
Distributed Assets not consisting of cash or securities of the Company, pay such
Holder an amount in cash equal to the fair market value thereof (as determined
in good faith by the Board of Directors, whose determination shall be
conclusive). If any conversion of Securities described in the immediately
preceding sentence occurs prior to the payment date for a distribution to
holders of Common Stock which the Holder of Securities so converted is entitled
to receive in accordance with the immediately preceding sentence, the Company
may elect to distribute to such Holder a due bill for the portion of Distributed
Assets to which such Holder is so entitled; provided that such due bill (i)
meets any applicable requirements of the principal national securities exchange
or other market on which the Common Stock is then traded and (ii) requires
payment or delivery of the Distributed Assets no later than the date of payment
or delivery thereof to holders of shares of Common Stock receiving such
distribution.
(d) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock and Class B stock, par value $0.01 per share (the
"Class B Stock") cash (excluding regular quarterly dividends in cash that may
from time to time be fixed by the Board of Directors of the Company, and
distributions of cash that would otherwise constitute a Fundamental Change and
be reflected in a resulting adjustment to the Conversion Price as provided
herein), in an aggregate amount (for purposes of this Section 7(d), the
"Triggering Amount") that, combined together with (x) the aggregate amount of
any other such distributions to all holders of Common Stock and Class B Stock
made exclusively in cash within the 12 months preceding the date of payment of
such distribution, and in respect of which no adjustment pursuant to this
paragraph (d) has been made, and (y) the aggregate of any cash plus the fair
market value (as determined in good faith by the Board of Director of the
Company, whose determination shall be conclusive) of consideration payable in
respect of any tender offer by the Company or any of its subsidiaries for all or
any portion of the Common Stock and/or Class B Stock concluded within the 12
months preceding the date of such distribution, and in respect of which no
adjustment pursuant to paragraph (e) below has been made (for purposes of this
Section 7(d), the sum of the Triggering Amount and the amounts referred to in
11
clauses (x) and (y) above is referred to as the "Total Distribution Amount"),
exceeds 17.5% of the Market Capitalization (as defined below) on the record date
with respect to such distribution, then and in each such case, immediately after
the close of business on the fifth Trading Day after the "ex" date (as defined
below), the Conversion Price shall be reduced so that the same shall equal the
amount determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such date by a fraction, the numerator of
which shall be equal to the Adjustment Date Market Price (as defined below), and
the denominator of which shall be equal to the sum of (A) the Adjustment Date
Market Price and (B) an amount equal to the quotient of (1) the Total
Distribution Amount and (2) the number of shares of Common Stock and Class B
Stock outstanding on such distribution date. Such decrease (if any) in the
Conversion Price shall be given retroactive effect to the opening of business on
the "ex" date. For purposes of Section 7(d) and (e) hereof, the "Adjustment Date
Market Price" with respect to a distribution referred to in this Section 7(d) or
a tender offer referred to in Section 7(e) below, shall be the average of the
daily Closing Prices of Common Stock for the five consecutive Trading Days after
the "ex" date related to such distribution or tender offer, as the case may be.
The term "Market Capitalization" as of any time of determination means the
product of the Current Market Price per share of Common Stock on such date
multiplied by the number of shares of Common Stock and Class B Stock outstanding
on such date. "Ex" date means (i) when used with respect to any issuance,
dividend or distribution, the first date on which the Common Stock trades
regular way on the New York Stock Exchange (or on such successor securities
exchange as the Common Stock may be listed or in the relevant market from which
the Closing Prices were obtained) without the right to receive such dividend or
distribution, and (ii) when used with respect to any tender offer, the first
date on which the Common Stock is quoted regular way on such securities exchange
or in such market after the Tender Expiration Time (as defined herein) of such
tender offer.
However, in the event that the Triggering Amount applicable to one
share of Common Stock is equal to or greater than the Current Market Price per
share of Common Stock on the record date with respect to such distribution, the
Company shall have the option, in lieu of the foregoing adjustment, to make
adequate provision so that each Holder shall have the right to receive, upon
conversion of Securities, in addition to the shares of Common Stock to which
such Holder is entitled, an amount in cash equal to (i)(A) the Total
Distribution Amount, divided by (B) the number of shares of Common Stock and
Class B Stock outstanding as of the record date with respect to such
distribution, times (ii)(A) the principal amount of Securities so converted,
divided by (B) the Conversion Price in effect on the record date with respect to
such distribution.
(e) In case a tender offer made by the Company or any of its
subsidiaries for all or any portion of the Common Stock and/or Class B Stock
shall expire and such tender offer (as amended upon the expiration thereof)
shall require the payment to shareholders (based on the acceptance (up to any
maximum specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the last time (the "Tender Expiration Time")
tenders could have been made
12
pursuant to such tender offer (as it may be amended)) of an aggregate
consideration having a fair market value (as determined in good faith by the
Board of Director of the Company, whose determination shall be conclusive) (for
purposes of this Section 7(e), the "Triggering Value") that, combined together
with (x) the aggregate of the cash plus the fair market value, as of the Tender
Expiration Time, of consideration payable in respect of any other tender offers,
by the Company or any of its subsidiaries for all or any portion of the Common
Stock and/or Class B Stock outstanding expiring within the 12 months preceding
the Tender Expiration Time and in respect of which no adjustment pursuant to
this Section 7(e) has been made, and (y) the aggregate amount of any cash
distributions described in Section 7(d) to all holders of Common Stock and Class
B Stock within the 12 months preceding the expiration of such tender offer and
in respect of which no adjustment pursuant to Section 7(d) has been made (for
purposes of this Section 7(e), the sum of the Triggering Value and the amounts
referred to in clauses (x) and (y) above is referred to as the "Total
Distribution Value"), exceeds 17.5% of the Market Capitalization as of the
Tender Expiration Time, then, and in each such case, immediately after the close
of business on the fifth Trading Day after the "ex" date, the Conversion Price
shall be adjusted so that the same shall equal the amount determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on the date of the Tender Expiration Time by a fraction, the numerator
of which shall be the Adjustment Date Capitalization (as defined below), and the
denominator of which shall be the sum of the Adjustment Date Capitalization and
the Total Distribution Value. "Adjustment Date Capitalization" shall mean the
product of the Adjustment Date Market Price multiplied by the number of shares
of Common Stock and Class B Stock outstanding on the date of determination of
such Adjustment Date Market Price.
Such decrease (if any) in the Conversion Price shall be given
retroactive effect to the opening of business on the "ex" date. In the event
that the Company is obligated to purchase shares pursuant to any such tender
offer, but the Company is permanently prevented by applicable law from effecting
any such purchases or all such purchases are rescinded, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in effect
if such tender offer had not been made. If the application of this Section 7(e)
to any tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this Section 7(e).
(f) Notwithstanding anything in Section 7 (b) and (c), if such
exercisable, exchangeable or convertible securities, rights or warrants shall by
their terms provide for an increase or increases with the passage of time or
otherwise in the price payable to the Company upon the exercise thereof, the
Conversion Price upon any such increase becoming effective shall forthwith be
readjusted (but to no greater extent than originally adjusted by reason of such
issuance or sale) to reflect the same. Upon the expiration or termination of
such rights or warrants, if any such rights or warrants shall not have been
exercised, and upon the expiration or termination of the exercise, exchange or
conversion rights under such exercisable, exchangeable or convertible
securities, if any such exercisable, exchangeable or convertible securities
shall not have been exercised, exchanged or converted, then
13
the Conversion Price thereof shall forthwith be readjusted and thereafter be the
rate which it would have been had an adjustment been made on the basis that (x)
the only rights or warrants so issued or sold were those so exercised and they
were issued or sold for the consideration actually received by the Company upon
such exercise, plus the consideration, if any, actually received by the Company
upon such exercise, plus the consideration, if any, actually received by the
Company for the granting of all such options, rights or warrants whether or not
exercised and (y) the Company issued and sold a number of shares of Common Stock
equal to those actually issued upon exercise of such exercisable, exchangeable
or convertible securities, and such shares were issued and sold for a
consideration equal to the aggregate exercise, exchange or conversion price
actually paid at the respective dates of their exercise. An adjustment made
pursuant to this Section 7 (f) shall be made on the next business day following
the date on which any such issuance is made and shall be effective immediately
after the close of business on such date. For purposes of Section 7 (b) and (c),
the aggregate consideration received by the Company in connection with the
issuance of shares of Common Stock or of rights, warrants or securities
exercisable for or exchangeable or convertible into shares of Common Stock shall
be deemed to be equal to the sum of the aggregate offering price (before
deduction of underwriting discounts or commissions and expenses payable to third
parties) of all such securities plus the minimum aggregate amount, if any,
payable upon exercise of such rights or warrants and conversion of any such
exercisable, exchangeable or convertible securities into shares of Common Stock.
(g) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 7 (g)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment; and provided further, any adjustment shall be
required and made in accordance with the provisions set forth herein (other than
this Section 7(g)) not later than such time as may be required in order to
preserve the tax-free nature of a distribution to the holders of shares of
Common Stock. All calculations hereunder shall be made to the nearest cent (with
$.005 being rounded upward) or to the nearest 1/100 of a share (with .005 of a
share being rounded upward), as the case may be. Anything herein to the contrary
notwithstanding, the Company shall be entitled, to the extent permitted by law,
to make such reductions in the Conversion Price, in addition to those required
herein, as it in its discretion shall determine to be advisable in order that
any stock dividends, subdivision of shares, distribution of rights or warrants
to purchase stock or securities, or a distribution of other assets (other than
cash dividends) hereafter made by the Company to its stockholders shall not be
taxable.
(h) For purposes of any computation under Section 7 (b), (c), (d) and
(e), the "Current Market Price" per share of Common Stock on any date in
question shall be deemed to be an average of the daily Closing Prices for the
ten consecutive Trading Days prior to the earlier of the day in question or, if
applicable, the day before the "ex" date with respect to the issuance or
distribution requiring such computation; provided that if another event occurs
that would require an adjustment to the Conversion Price pursuant to Section 7,
the Board of Directors may make such
14
adjustments to the Closing Prices during such ten Trading Day period as it deems
appropriate to effectuate the intent of the adjustments herein, in which case
any such determination by the Board of Directors shall be conclusive.
8. Fundamental Change.
(a) In case the Company shall be a party to any transaction
constituting a Fundamental Change (as defined below) (including without
limitation a merger, consolidation, sale of all or substantially all of the
Company's assets or recapitalization of the Common Stock and excluding any
transaction as to which Section 7 (a) above applies) (each of the foregoing
being referred to as a "Transaction"), then appropriate provision shall be made
as part of the terms of such transaction or series of transactions so that the
Holder of each Security then outstanding shall have the right thereafter to
convert such Security only into (A) if any such transaction does not constitute
a Common Stock Fundamental Change (as hereinafter defined), the kind and amount
of the securities, cash or other property that would have been receivable upon
such Transaction by a holder of the number of shares of Common Stock into which
such Security might have been converted immediately prior to such Transaction,
after, in the case of a Non-Stock Fundamental Change (as hereinafter defined),
giving effect to any adjustment in the Conversion Price required by the
provisions which follow in subparagraph (i) of Section 8(c), and (B) if any such
transaction constitutes a Common Stock Fundamental Change, common stock of the
kind received by holders of Common Stock as a result of such Common Stock
Fundamental Change in an amount determined pursuant to the provisions which
follow in subparagraph (ii) of Section 8(c). The company formed by such
consolidation or resulting from such merger or that acquires such assets or that
acquires the Common Stock, as the case may be, shall enter into a supplemental
indenture with the Trustee, satisfactory in form to the Trustee, the provisions
of which establishes such right and provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 8. The above provisions shall similarly apply to successive
recapitalization, reclassifications, consolidations, mergers, sales, transfers
or share exchanges.
(b) Notwithstanding any other provisions in this Section 8 to the
contrary, if any Fundamental Change (as hereinafter defined) occurs, then the
Conversion Price in effect will be adjusted immediately following such
Fundamental Change as described below in Section 8(c).
(c) For purposes of calculating any adjustment to be made pursuant to
this Section 8 in the event of a Fundamental Change, immediately following such
Fundamental Change (and for such purposes a Fundamental Change shall be deemed
to occur on the earlier of (a) the occurrence of such Fundamental Change and (b)
the date, if any, fixed for determination of shareholders entitled to receive
the cash, securities, property or other assets distributable in such Fundamental
Change to holders of the Common Stock):
15
(i) in the case of a Non-Stock Fundamental Change, the
Conversion Price per share of Common Stock immediately following such
Non-Stock Fundamental Change shall be the lower of (A) the Conversion
Price in effect immediately prior to such Non-Stock Fundamental Change,
and (B) the product of (1) the greater of the Applicable Price (as
hereinafter defined) or the then applicable Reference Market Price (as
hereinafter defined) and (2) a fraction the numerator of which shall be
100 and the denominator of which shall be the amount determined in the
next sentence based on the date on which such Non-Stock Fundamental
Change occurs. For the twelve month period beginning January 30, 2002,
the denominator will be 106.5, and the denominator will decrease by
0.65 during each successive 12-month period; provided that the
denominator shall in no event be less than 100.
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price per share of Common Stock immediately following the
Common Stock Fundamental Change shall be the Conversion Price in effect
immediately prior to such Common Stock Fundamental Change, but after
giving effect to any other adjustments effected pursuant to this
Section 8, multiplied by a fraction, the numerator of which is the
Purchaser Stock Price (as hereinafter defined) and the denominator of
which is the Applicable Price; provided that, in the event of a Common
Stock Fundamental Change in which (A) 100% of the value of the
consideration received by a holder of Common Stock is common stock of
the successor, acquiror or other third party (and cash, if any, paid
with respect to any fractional interests in such common stock resulting
from such Common Stock Fundamental Change) and (B) all of the Common
Stock shall have been exchanged for, converted into or acquired for
common stock (and cash, if any, with respect to fractional interests)
of the successor, acquiror or other third party, the Conversion Price
per share of Common Stock immediately following such Common Stock
Fundamental Change shall be the Conversion Price in effect immediately
prior to such Common Stock Fundamental Change divided by the number of
shares of common stock of the successor, acquiror, or other third party
received by a holder of one share of Common Stock as a result of such
Common Stock Fundamental Change.
(d) The following definitions shall apply to terms used in this
Section 8:
(i) "Applicable Price" shall mean (A) in the event of a
Non-Stock Fundamental Change in which the holders of Common Stock
receive only cash, the amount of cash receivable by a holder of one
share of Common Stock and (B) in the event of any other Fundamental
Change, the average of the Closing Prices for one share of Common Stock
during the ten Trading Days immediately prior to the record date for
the determination of the holders of Common Stock entitled to receive
cash, securities, property or other assets in connection with such
Fundamental Change or, if there is no such record date, prior to the
date upon which the holders of Common Stock shall have the right to
receive such cash, securities, property or other assets.
16
(ii) "Common Stock Fundamental Change" shall mean any
Fundamental Change in which more than 50% of the value (as determined
in good faith by the Board of Directors of the Company) of the
consideration received by the holders of Common Stock pursuant to such
transactions consists of shares of common stock that, for the ten
consecutive Trading Days immediately prior to such Fundamental Change,
has been admitted for listing or admitted for listing subject to notice
of issuance on a national securities exchange or quoted on the Nasdaq
National Market; provided, however, that a Fundamental Change shall not
be a Common Stock Fundamental Change unless either (A) the Company
continues to exist after the occurrence of such Fundamental Change and
the outstanding Preferred Securities continue to exist as outstanding
Preferred Securities, or (B) the outstanding Preferred Securities
continue to exist as Preferred Securities and are convertible into
common stock of the successor to the Company.
(iii) "Fundamental Change" shall mean the occurrence of any
transaction or event or series of transactions or events pursuant to
which all or substantially all of the Common Stock shall be exchanged
for, converted into, acquired for or constitutes solely the right to
receive cash, securities, property or other assets (whether by means of
an exchange offer, liquidation, tender offer, consolidation, merger,
recapitalization or otherwise); provided, however, in the case of a
plan involving more than one such transaction or event, for purposes of
adjustment of the Conversion Price, such Fundamental Change shall be
deemed to have occurred when substantially all of the Common Stock has
been exchanged for, converted into, or acquired for or constitutes
solely the right to receive cash, securities, property or other assets,
but the adjustment shall be based upon the consideration that the
holders of Common Stock received in such transaction or event as a
result of which more than 50% of the Common Stock shall have been
exchanged for, converted into, or acquired for or shall constitute
solely the right to receive such cash, securities, property or other
assets.
(iv) "Non-Stock Fundamental Change" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
(v) "Purchaser Stock Price" shall mean, with respect to any
Common Stock Fundamental Change, the average of the Closing Prices for
one share of the common stock received by holders of Common Stock in
such Common Stock Fundamental Change during the ten Trading Days
immediately prior to the record date for the determination of the
holders of Common Stock entitled to receive such common stock or, if
there is no such record date, prior to the date upon which the holders
of Common Stock shall have the right to receive such common stock.
(vi) "Reference Market Price" shall initially mean $9.63
(which is an amount equal to 66-2/3% of the last reported sale price
for the Common Stock on the New York Stock Exchange on January 24,
2002) and, in the
17
event of any adjustment to the Conversion Price other than as
a result of a Fundamental Change, the Reference Market Price shall also
be adjusted so that the ratio of the Reference Market Price to the
Conversion Price after giving effect to any such adjustment shall
always be the same as the ratio of the initial Reference Market Price
to the initial Conversion Price set forth in Section 5 hereof.
(e) In determining the amount and type of consideration received by a
holder of Common Stock in the event of a Fundamental Change, consideration
received by a holder of Common Stock pursuant to a statutory right of appraisal
will be disregarded.
9. Provisions Generally Applicable to Conversion Price Adjustments. In
any case in which the conversion price adjustment provisions herein provide that
an adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (A) issuing to
the Holders of the Securities converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable upon
such conversion by reason of the adjustment required by such event over and
above the Common Stock issuable upon such conversion before giving effect to
such adjustment and (B) paying to such Holder any amount in cash in lieu of any
fraction as set forth herein.
For purposes hereof, the number of shares of Common Stock at any time
outstanding shall not include any shares of Common Stock then owned or held by
or for the account of the Company.
Notwithstanding any other provision herein to the contrary, the
issuance of any shares of Common Stock pursuant to any plan providing for the
reinvestment of dividends or interest payable on securities of the Company and
the investment of additional optional amounts in shares of Common Stock under
any such plan, and the issuance of any shares of Common Stock or options or
rights to purchase such shares pursuant to any employee benefit plan or program
of the Company or pursuant to any option, warrant or exercisable, exchangeable
or convertible security (including, but not limited to, Class B Stock)
outstanding as of January 24, 2002, shall not be deemed to constitute an
issuance of Common Stock or exercisable, exchangeable or convertible securities
by the Company to which any of the Conversion Price adjustment provisions hereof
apply. There shall be no adjustment of the Conversion Price in case of the
issuance of stock of the Company in a reorganization, acquisition or other
similar transaction except as specifically set forth herein. If any action or
transaction would require adjustment of the Conversion Price pursuant to more
than one paragraph hereof, only one adjustment shall be made and such adjustment
shall be the amount of adjustment which has the highest absolute value.
10. Notice of Certain Events. If:
(i) the Company shall declare a dividend (or any other
distribution) on the Common Stock (other than a dividend
in
18
cash that would not require an adjustment of the
Conversion Price pursuant to Section 7(c) above); or
(ii) the Company shall authorize the granting to the holders of
the Common Stock of rights or warrants to subscribe for or
purchase any shares of any class or any other rights or
warrants; or
(iii) there shall be any reclassification of the Common Stock
(other than an event to which Section 7 (a) (ii) or (iii)
above applies) or any consolidation or merger to which the
Company is a party and for which approval of any
stockholders of the Company is required, or the sale or
transfer of all or substantially all of the assets of the
Company, or of any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or
other property; or
(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company,
then the Company shall, (a) if any Preferred Securities are outstanding, cause
to be filed with the transfer agent for the Preferred Securities, and shall
cause to be mailed to the holders of record of the Preferred Securities, at
their last addresses as they shall appear upon the stock transfer books of the
Trust or (b) cause to be mailed to the Holders of the Securities at their
addresses as shown on the Securities Register, as promptly as possible, but at
least 15 days prior to the applicable record or effective date hereinafter
specified, a notice stating (A) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights or warrants, or, if a record
is not to be taken, the date as of which the holders of Common Stock of record
to be entitled to such dividend, distribution or rights or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, sale, transfer, share exchange, distribution, liquidation or winding up
is expected to become effective and the date as of which it is expected, that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
distribution, liquidation or winding up. Failure to give such notice or any
defect therein shall not affect the legality or validity of the proceedings
described herein.
11. Notice of Adjustment to Conversion Price. Whenever the Conversion
Price is adjusted as herein provided, the Company shall promptly calculate such
adjustment and file with the Trustee, the transfer agent for the Preferred
Securities and the Securities and the Conversion Agent an officers' certificate
setting forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts upon which such adjustment is based. Neither the
Trustee nor the Property Trustee shall have any duty or obligation to make any
of the calculations required to be made in Section 7 or 8 hereof or to verify or
confirm the accuracy of any of such calculations. Promptly after delivery of
such certificate, the Company shall prepare
19
a notice of such adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the date on which such adjustment becomes effective and
shall mail such notice of such adjustment of the Conversion Price to the Holders
of the Securities and all record holders of Preferred Securities at his or her
last address as shown on the Security Register or the stock transfer books of
the Trust, as applicable.
12. Amendments and Waivers. The Indenture permits, with certain
exceptions as therein provided, the Company and the Trustee, with the consent of
the Holders of not less than 66-2/3% in aggregate principal amount of the
Securities of all series affected at the time Outstanding, to execute
supplemental indentures for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Securities; provided, however, that no such supplemental indenture shall
(i) extend the Stated Maturity of the principal of (or premium, if any, on) or
any installment of principal of or interest on any Security, or reduce the
principal amount thereof, or reduce the rate of payment of interest thereon,
without the consent of the Holder of each Security so affected or (ii) reduce
the aforesaid percentage of Securities, the Holders of which are required to
consent to any such supplemental indenture, without the consent of the Holders
of each Security then Outstanding. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Securities of all series at the time outstanding affected thereby, on behalf of
the Holders of the Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange or
in lieu hereof, whether or not notation of such consent or waiver is made upon
this Security.
Subject to Article XIV of the Indenture, no reference herein to the
Indenture (other than such Section) and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the amount of principal of (and premium, if any, on)
and interest on this Security herein provided, and at the times, place and rate,
and in the coin or currency, herein prescribed.
13. Interest Deferral. So long as no Event of Default has occurred and
is continuing, the Company shall have the right, at any time during the term of
the Securities, from time to time to extend the interest payment period of such
Securities for up to 20 consecutive quarterly interest periods (the "Extended
Interest Payment Period"), at the end of which period the Company shall pay all
interest then accrued and unpaid (together with interest thereon at the rate of
6.50% per annum compounded quarterly to the extent permitted by applicable law
("Compounded Interest")); provided that no Extended Interest Payment Period may
extend beyond the date of maturity or any redemption date of the Securities.
During such Extended Interest Payment Period, the Company shall not declare or
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pay any dividends on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its Common Stock or Class B Stock,
preferred stock or any other securities similar to the Preferred Securities or
debt securities of the Company ranking equally in right of payment with or
junior to the Securities, or make any guarantee payments with respect thereto;
provided, however, that, during any such Extended Interest Payment Period, the
Company may (i) make any dividend, redemption, liquidation, interest, principal
or guarantee payment by way of securities, including capital stock, that rank
equally with or junior to the securities on which such dividend, redemption,
liquidation, interest, principal or guarantee payment is being made, (ii) pay
dividends (and cash in lieu of fractional shares) upon the conversion, other
than at the Company's option, of any of its preferred stock, in accordance with
the terms of such stock (iii) make payments under the Guarantee (as defined in
the Declaration of Trust), (iv) purchase Common Stock issued under any of the
Company's benefit plans for its directors, officers or employees, (v) make
payments or distributions in connection with a reclassification of the Company's
capital stock or the exchange or conversion of one series or class of the
Company's capital stock for another series or class of the Company's capital
stock and (vi) purchase fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged. Prior to the termination of any such
Extended Interest Payment Period, the Company may pay all or any portion of the
interest accrued on the Securities on any Interest Payment Date to Holders of
record on the Regular Record Date for such Interest Payment Date or from time to
time further extend such Extended Interest Payment Period, provided that such
Extended Interest Payment Period, together with all such further extensions
thereof, shall not exceed 20 consecutive quarterly interest periods or extend
beyond the date of maturity of any redemption date of the Securities. At the
termination of any such Extended Interest Payment Period and upon the payment of
all accrued and unpaid interest then due, together with Compounded Interest, the
Company may select a new Extended Interest Payment Period, subject to the
foregoing requirements. No interest on this Security shall be due and payable
during an Extended Interest Payment Period, except at the end thereof. At the
end of the Extended Interest Payment Period, the Company shall pay all interest
accrued and unpaid on the Securities including any Compounded Interest which
shall be payable to the Holders of the Securities in whose names the Securities
are registered in the Security Register on the Regular Record Date for the first
Interest Payment Date occurring on or after the end of the Extended Interest
Payment Period.
So long as the Property Trustee is the sole owner and holder of record
of the Securities at the time the Company selects an Extended Interest Payment
Period, the Company shall give both the Property Trustee and the Trustee written
notice of its selection of such Extended Interest Payment Period ten business
days prior to the earlier of (i) the next succeeding date on which distributions
on the Preferred Securities are payable or (ii) the date the Trust is required
to give notice of the record date or the date such distributions are payable to
the New York Stock Exchange or other applicable self-regulatory organization or
to holders of the Preferred Securities, but in any event not less than one
business day prior to such
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record date. The Company shall cause the Trust to give notice of the Company's
selection of such Extended Interest Payment Period to the holders of Preferred
Securities.
If, as a result of an Early Termination Event (as defined in the
Declaration of Trust), Securities have been distributed to holders of Preferred
Securities, at the time the Company selects an Extended Interest Payment Period,
the Company shall give the holders of Securities and the Trustee written notice
of its selection of such Extended Interest Payment Period at least ten business
days prior to the earlier of (i) the next succeeding Interest Payment Date or
(ii) the date the Company is required to give notice of the record or payment
date of such interest payment to the New York Stock Exchange (if the Securities
are then listed thereon) or other applicable self-regulatory organization or to
holders of the Securities.
14. Agreed Tax Treatment. The Company and, by acceptance of a Security
or a beneficial interest therein, the Holder of, and any Person that acquires a
beneficial interest in, such Security, agree that for United States federal,
state and local tax purposes it is intended that such Security constitute
indebtedness.
15. Listing of Securities upon Distribution to Preferred Security
Holders. In connection with the distribution of the Securities to the holders of
the Preferred Securities upon an Early Termination Event, the Company will use
its best efforts to list such Securities on the New York Stock Exchange or on
such other exchange as the Preferred Securities are then listed and traded.
16. Transfer of Securities. As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this Security is
registrable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the company in the Borough
of Manhattan, the City and State of New York, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
Except as provided below, the Securities of this series are issuable
only in registered form without coupons in denominations of $50 and, to the
extent practicable, any integral multiple thereof. As provided in the Indenture
and subject to certain limitations therein set forth, Securities of this series
are exchangeable for a like aggregate principal amount of Securities of this
series of different authorized denominations as requested by the Holder
surrendering the same. In connection with the distribution of Securities to
holders of the Preferred Securities in connection with an early termination
event (as defined in the Declaration of Trust):
(i) the Securities in certificated form may be presented to
the Trustee by the Property Trustee in exchange for one or more Global
Securities in an aggregate principal amount equal to the aggregate principal
amount of all
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outstanding Securities, to be registered in the name of the Depository, or its
nominee, and delivered by the Trustee to the Depository, or its custodian, for
crediting to the accounts of its participants pursuant to the procedures of the
Depository. The Company upon any such presentation shall execute a Global
Security in such aggregate principal amount and deliver the same to the Trustee
for authentication and delivery in accordance with the Indenture; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, the Security in certificated form may be presented to the
Trustee by the Property Trustee and any Preferred Security certificate which
represents Preferred Securities other than Preferred Securities held by the
Depository or its nominee ("Non Book-Entry Preferred Securities") will be deemed
to represent beneficial interests in Securities presented to the Trustee by the
Property Trustee having an aggregate principal amount equal to the aggregate
liquidation amount of the Non Book-Entry Preferred Securities until such
Preferred Security certificates are presented to the Security Registrar for
transfer or reissuance at which time such Non Book-Entry Preferred Security
certificates will be canceled and a Security, registered in the name of the
holder of the Preferred Security certificate or the transferee of the holder of
such Preferred Security certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Security certificate canceled, will be executed by the Company and delivered to
the Trustee for authentication and delivery in accordance with the Indenture. On
issue of such Securities, Securities with an equivalent aggregate principal
amount that were presented by the Property Trustee to the Trustee will be deemed
to have been canceled.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company, or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.