Execution Copy
STILWELL FINANCIAL INC.
Liquid Yield Option (TM) Notes
due 2031
$930,709,000
(Zero Coupon-Senior)
INDENTURE
Dated as of April 30, 2001
The Chase Manhattan Bank
TRUSTEE
(TM)Trademark of Merrill Lynch & Co., Inc.
CROSS REFERENCE TABLE*
IA Section.................................................................................. Indenture Section
310(a)(1)................................................................................... 7.10
(a)(2).................................................................................. 7.10
(a)(3).................................................................................. N.A.
(a)(4).................................................................................. N.A.
(b)..................................................................................... 7.08; 7.10
(c)..................................................................................... N.A.
311(a)...................................................................................... 7.11
(b)..................................................................................... 7.11
(c)...................................................................................... N.A.
312(a)...................................................................................... 2.05
(b)..................................................................................... 13.03
(c)..................................................................................... 13.03
313(a)...................................................................................... 7.06
(b)(1).................................................................................. N.A.
(b)(2).................................................................................. 7.06
(c)..................................................................................... 13.02
(d)..................................................................................... 7.06
314(a)...................................................................................... 4.02; 4.03; 13.02
(b)..................................................................................... N.A.
(c)(1).................................................................................. 13.04
(c)(2).................................................................................. 13.04
(c)(3).................................................................................. N.A.
(d)..................................................................................... N.A.
(e)..................................................................................... 13.05
(f)..................................................................................... N.A.
315(a)...................................................................................... 7.01
(b)..................................................................................... 7.05; 13.02
(c)..................................................................................... 7.01
(d)..................................................................................... 7.01
(e)..................................................................................... 6.11
316(a) (last sentence)...................................................................... 2.08
(a)(1)(A)............................................................................... 6.05
(a)(1)(B)............................................................................... 6.04
(a)(2).................................................................................. N.A.
(b)..................................................................................... 6.07
317(a)(1)............................................................................... 6.08
(a)(2).................................................................................. 6.09
(b)..................................................................................... 2.04
318(a)...................................................................................... 13.01
N.A. means Not Applicable.
- - ------------------------
* Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS*
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions..................................................................................... 1
SECTION 1.02 Other Definitions............................................................................... 5
SECTION 1.03 Incorporation by Reference of Trust Indenture Act............................................... 7
SECTION 1.04 Rules of Construction........................................................................... 7
SECTION 1.05 Acts of Holders................................................................................. 7
ARTICLE 2
THE SECURITIES
SECTION 2.01 Form and Dating................................................................................. 9
SECTION 2.02 Execution and Authentication.................................................................... 10
SECTION 2.03 Registrar, Paying Agent, Conversion Agent and Bid Solicitation Agent............................ 11
SECTION 2.04 Paying Agent to Hold Money and Securities in Trust.............................................. 11
SECTION 2.05 Securityholder Lists............................................................................ 12
SECTION 2.06 Transfer and Exchange........................................................................... 12
SECTION 2.07 Replacement Securities.......................................................................... 14
SECTION 2.08 Outstanding Securities; Determinations of Holders' Action....................................... 14
SECTION 2.09 Temporary Securities............................................................................ 15
SECTION 2.10 Cancellation.................................................................................... 16
SECTION 2.11 Persons Deemed Owners........................................................................... 16
SECTION 2.12 Global Securities............................................................................... 16
SECTION 2.13 CUSIP Numbers................................................................................... 21
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01 Right to Redeem; Notices to Trustee............................................................. 21
SECTION 3.02 Selection of Securities to Be Redeemed.......................................................... 22
SECTION 3.03 Notice of Redemption............................................................................ 22
SECTION 3.04 Effect of Notice of Redemption.................................................................. 23
SECTION 3.05 Deposit of Redemption Price..................................................................... 23
SECTION 3.06 Securities Redeemed in Part..................................................................... 24
SECTION 3.07 Conversion Arrangement on Call for Redemption................................................... 24
SECTION 3.08 Purchase of Securities at Option of the Holder.................................................. 24
SECTION 3.09 Purchase of Securities at Option of the Holder upon Change in Control........................... 31
SECTION 3.10 Effect of Purchase Notice or Change in Control Purchase Notice.................................. 34
SECTION 3.11 Deposit of Purchase Price or Change in Control Purchase Price................................... 35
* Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
SECTION 3.12 Securities Purchased in Part.................................................................... 35
SECTION 3.13 Covenant to Comply With Securities Laws Upon Purchase of Securities............................. 36
SECTION 3.14 Repayment to the Company........................................................................ 36
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Securities........................................................................... 36
SECTION 4.02 SEC and Other Reports........................................................................... 37
SECTION 4.03 Compliance Certificate.......................................................................... 37
SECTION 4.04 Further Instruments and Acts.................................................................... 38
SECTION 4.05 Maintenance of Office or Agency................................................................. 38
SECTION 4.06 Delivery of Certain Information................................................................. 38
SECTION 4.07 Calculation of Original Issue Discount.......................................................... 38
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When Company May Merge or Transfer Assets....................................................... 39
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default............................................................................... 40
SECTION 6.02 Acceleration.................................................................................... 42
SECTION 6.03 Other Remedies.................................................................................. 43
SECTION 6.04 Waiver of Past Defaults......................................................................... 43
SECTION 6.05 Control by Majority............................................................................. 43
SECTION 6.06 Limitation on Suits............................................................................. 43
SECTION 6.07 Rights of Holders to Receive Payment............................................................ 44
SECTION 6.08 Collection Suit by Trustee...................................................................... 44
SECTION 6.09 Trustee May File Proofs of Claim................................................................ 44
SECTION 6.10 Priorities...................................................................................... 45
SECTION 6.11 Undertaking for Costs........................................................................... 46
SECTION 6.12 Waiver of Stay, Extension or Usury Laws......................................................... 46
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties of Trustee............................................................................... 46
SECTION 7.02 Rights of Trustee............................................................................... 47
SECTION 7.03 Individual Rights of Trustee.................................................................... 49
SECTION 7.04 Trustee's Disclaimer............................................................................ 49
SECTION 7.05 Notice of Defaults.............................................................................. 49
SECTION 7.06 Reports by Trustee to Holders................................................................... 49
SECTION 7.07 Compensation and Indemnity...................................................................... 50
SECTION 7.08 Replacement of Trustee.......................................................................... 51
SECTION 7.09 Successor Trustee by Merger..................................................................... 51
SECTION 7.10 Eligibility; Disqualification................................................................... 51
SECTION 7.11 Preferential Collection of Claims Against Company............................................... 52
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Liability on Securities............................................................ 52
SECTION 8.02 Repayment to the Company........................................................................ 52
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders...................................................................... 53
SECTION 9.02 With Consent of Holders......................................................................... 53
SECTION 9.03 Compliance with Trust Indenture Act............................................................. 54
SECTION 9.04 Revocation and Effect of Consents, Waivers and Actions.......................................... 54
SECTION 9.05 Notation on or Exchange of Securities........................................................... 55
SECTION 9.06 Trustee to Sign Supplemental Indentures......................................................... 55
SECTION 9.07 Effect of Supplemental Indentures............................................................... 55
ARTICLE 10
SPECIAL TAX EVENT CONVERSION; PAYMENT OF INTEREST ON FAILURE TO OBTAIN RATING
SECTION 10.01 Optional Conversion to Semiannual Coupon Note Upon Tax Event.................................... 55
SECTION 10.02 Payment of Interest on Failure to Obtain Rating................................................. 56
ARTICLE 11
CONVERSION
SECTION 11.01 Conversion Privilege............................................................................ 56
SECTION 11.02 Conversion Procedure............................................................................ 57
SECTION 11.03 Fractional Shares............................................................................... 59
SECTION 11.04 Taxes on Conversion............................................................................. 59
SECTION 11.05 Company to Provide Stock........................................................................ 59
SECTION 11.06 Adjustment for Change In Capital Stock.......................................................... 59
SECTION 11.07 Adjustment for Rights Issue..................................................................... 60
SECTION 11.08 Adjustment for Other Distributions.............................................................. 61
SECTION 11.09 When Adjustment May Be Deferred................................................................. 64
SECTION 11.10 When No Adjustment Required..................................................................... 64
SECTION 11.11 Notice of Adjustment............................................................................ 65
SECTION 11.12 Voluntary Increase.............................................................................. 65
SECTION 11.13 Notice of Certain Transactions.................................................................. 65
SECTION 11.14 Reorganization of Company; Special Distributions................................................ 65
SECTION 11.15 Company Determination Final..................................................................... 66
SECTION 11.16 Trustee's Adjustment Disclaimer................................................................. 66
SECTION 11.17 Simultaneous Adjustments........................................................................ 67
SECTION 11.18 Successive Adjustments.......................................................................... 67
SECTION 11.19 Rights Issued in Respect of Common Stock Issued Upon Conversion................................. 67
ARTICLE 12
PAYMENT OF INTEREST
SECTION 12.01 Interest Payments............................................................................... 67
SECTION 12.02 Defaulted Interest.............................................................................. 68
SECTION 12.03 Interest Rights Preserved....................................................................... 69
ARTICLE 13
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act Controls.................................................................... 69
SECTION 13.02 Notices; Address of Agency in Manhattan......................................................... 69
SECTION 13.03 Communication by Holders with Other Holders..................................................... 70
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.............................................. 70
SECTION 13.05 Statements Required in Certificate or Opinion................................................... 70
SECTION 13.06 Separability Clause............................................................................. 71
SECTION 13.07 Rules by Trustee, Paying Agent, Conversion Agent and Registrar.................................. 71
SECTION 13.08 Calculations.................................................................................... 71
SECTION 13.09 Legal Holidays.................................................................................. 71
SECTION 13.10 GOVERNING LAW................................................................................... 71
SECTION 13.11 No Recourse Against Others...................................................................... 71
SECTION 13.12 Successors...................................................................................... 72
SECTION 13.13 Multiple Originals.............................................................................. 72
INDENTURE dated as of April 30, 2001 between STILWELL FINANCIAL INC., a
Delaware corporation ("Company"), and The Chase Manhattan Bank, a New York
banking corporation ("Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's Liquid Yield
Option(TM) Notes due 2031 (Zero Coupon - Senior) ("Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"144A Global Security" means a permanent Global Security in the form of the
Security attached hereto as Exhibit A-1, and that is deposited with and
registered in the name of the Depositary, representing Securities sold in
reliance on Rule 144A under the Securities Act.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Security, in each case to the extent
applicable to such transaction and as in effect from time to time.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of such board.
"Business Day" means each day of the year other than a Saturday or a Sunday
or other day on which banking institutions in The City of New York are required
or authorized to close.
"Capital Stock" for any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation.
"Certificated Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A-2.
1
"Common Stock" shall mean the shares of Common Stock, $0.01 par value, of
the Company as it exists on the date of this Indenture or any other shares of
Capital Stock of the Company into which the Common Stock shall be reclassified
or changed.
"Company" means the party named as the "Company" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any two Officers.
"Corporate Trust Office" means the principal office of the Trustee at which
at any time its corporate trust business shall be administered, which office at
the date hereof is located at 450 West 33rd Street, New York, NY 10001,
Attention: Institutional Trust Services, or such other address as the Trustee
may designate from time to time by notice to the Holders and the Company, or the
principal corporate trust office of any successor Trustee (or such other address
as a successor Trustee may designate from time to time by notice to the Holders
and the Company).
"Debt" means with respect to the Company at any date, without duplication,
obligations (other than nonrecourse obligations) for borrowed money or evidenced
by bonds, debentures, notes or similar instruments.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Global Securities" means Securities that are in the form of the Securities
attached hereto as Exhibit A-1, and to the extent that such Securities are
required to bear the Legend required by Section 2.06, such Securities will be in
the form of a 144A Global Security.
"Holder" or "Securityholder" means a person in whose name a Security is
registered on the Registrar's books.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"Institutional Accredited Investor Security" means a Security in the form
of the Security attached hereto as Exhibit A-2, representing Securities sold to
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) and
(7) under the Securities Act).
"Interest Payment Date" means each date specified as such in section 11(d)
of the Securities.
"Issue Date" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
2
"Issue Price" of any Security means, in connection with the original
issuance of such Security, the initial issue price at which the Security is sold
as set forth on the face of the Security.
"Officer" means the Chairman of the Board, the Vice Chairman, the Chief
Executive Officer, the President, any Executive Vice President, any Senior Vice
President, any Vice President, the Treasurer or the Secretary or any Assistant
Treasurer or Assistant Secretary of the Company.
"Officers' Certificate" means a written certificate containing the
information specified in Sections 13.04 and 13.05, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.03 shall be signed by an authorized
financial or accounting Officer of the Company but need not contain the
information specified in Sections 13.04 and 13.05.
"Opinion of Counsel" means a written opinion containing the information
specified in Sections 13.04 and 13.05, from legal counsel who is acceptable to
the Trustee. The counsel may be an employee of, or counsel to, the Company or
the Trustee.
"Original Issue Discount" of any Security means the difference between the
Issue Price and the Principal Amount at Maturity of the Security as set forth on
the face of the Security.
"person" or "Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Principal Amount at Maturity" of a Security means the Principal Amount at
Maturity as set forth on the face of the Security.
"Purchase Date" means each date specified as such in section 7(a) of the
Securities.
"Purchase Price" means, with respect to any Purchase Date, the applicable
amount specified as such in section 7(a) of the Securities.
"Redemption Date" or "redemption date" means the date specified for
redemption of the Securities in accordance with the terms of the Securities and
this Indenture.
"Redemption Price" or "redemption price" shall have the meaning set forth
in section 6 of the Securities.
"Regular Record Date" means, with respect to any Interest Payment Date, the
date specified in section 11(d) of the Securities.
"Responsible Officer" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, trust officer or any
other officer of the Trustee who customarily
3
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person's knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Indenture.
"Required Rating" shall have the meaning set forth in section 11(c) of the
Securities.
"Restricted Security" means a Security required to bear the restrictive
legend set forth in the form of Security set forth in Exhibits A-1 and A-2 of
this Indenture.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities" means any of the Company's Liquid Yield Option Notes due 2031
(Zero Coupon-Senior), as amended or supplemented from time to time, issued under
this Indenture.
"Securityholder" or "Holder" means a person in whose name a Security is
registered on the Registrar's books.
"Significant Subsidiary", as such term is defined in Rule 1-02 of
Regulation S-X under the Securities Act of 1933, as amended.
"Special Record Date" means for the payment of any Defaulted Interest, the
date fixed by the Trustee pursuant to Section 12.02.
"Stated Maturity", when used with respect to any Security or any
installment of semiannual or contingent interest thereon, means the date
specified in such Security as the fixed date on which an amount equal to the
Principal Amount at Maturity of such Security or such installment of semiannual
or contingent interest is due and payable.
"Subsidiary" means (i) a corporation, a majority of whose Capital Stock
with voting power, under ordinary circumstances, to elect directors is, at the
date of determination, directly or indirectly owned by the Company, by one or
more Subsidiaries of the Company or by the Company and one or more Subsidiaries
of the Company, (ii) a partnership in which the Company or a Subsidiary of the
Company holds a majority interest in the equity capital or profits of such
partnership, or (iii) any other person (other than a corporation) in which the
Company, a Subsidiary of the Company or the Company and one or more Subsidiaries
of the Company, directly or indirectly, at the date of determination, has (x) at
least a majority ownership interest or (y) the power to elect or direct the
election of a majority of the directors or other governing body of such person.
"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 April 30, 2001, as a result of (a) any amendment to, or change (including
any announced prospective change) in,
4
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 April 30, 2001, there is more than an insubstantial risk that amounts that
are treated as interest on the Securities for United States federal income tax
purposes including amounts that are so treated based on the comparable yield and
the projected payment schedule set forth in Annex C hereof and any "net positive
adjustments", as defined in Treasury Regulation Section 1.1275-4(b)(6),
resulting from any interest described in Article 12 hereof and from amounts of
liquidated damages payable pursuant to the registration rights agreement but
excluding any other "net positive adjustments" 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.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.
"trading day" means a day during which trading in securities generally
occurs on the New York Stock Exchange or, if the Common Stock is not listed on
the New York Stock Exchange, on the principal other national or regional
securities exchange on which the Common Stock is then listed or, if the Common
Stock is not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock is then traded.
"Trustee" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
SECTION 1.02 Other Definitions.
Defined in
Term Section
"Act"................................................................................................. 1.05(a)
"Agent Members"....................................................................................... 2.12(e)
"Associate"........................................................................................... 3.09(a)
"Average Sale Price".................................................................................. 11.01
"Bankruptcy Law"...................................................................................... 6.01
"beneficial owner".................................................................................... 3.09(a)
"Bid Solicitation Agent'.............................................................................. 2.03
"cash"................................................................................................ 3.08(b)
"Change in Control"................................................................................... 3.09(a)
5
"Change in Control Purchase Date"..................................................................... 3.09(a)
"Change in Control Purchase Notice"................................................................... 3.09(c)
"Change in Control Purchase Price".................................................................... 3.09(a)
"Company Notice"...................................................................................... 3.08(e)
"Company Notice Date"................................................................................. 3.08(c)
"Conversion Agent".................................................................................... 2.03
"Conversion Date"..................................................................................... 11.02
"Conversion Rate"..................................................................................... 11.01
"Custodian"........................................................................................... 6.01
"Defaulted Interest".................................................................................. 12.03
"Depositary".......................................................................................... 2.01(a)
"DTC"................................................................................................. 2.01(a)
"Event of Default".................................................................................... 6.01
"Exchange Act"........................................................................................ 3.08(d)
"Ex-Dividend Date".................................................................................... 11.08(b)
"Ex-Dividend Time".................................................................................... 11.01
"Extraordinary Cash Dividend"......................................................................... 11.08
"Institutional Accredited Investors".................................................................. 2.01(b)
"Legal Holiday"....................................................................................... 13.08
"Legend".............................................................................................. 2.06(f)
"LYON Market Price"................................................................................... Exhibit A-1
"Market Price"........................................................................................ 3.08(d)
"Measurement Period".................................................................................. 11.08(a)
"noncontingent Bond Method"........................................................................... 4.07
"Notice of Default"................................................................................... 6.01
"Option Exercise Date"................................................................................ 10.01
"Paying Agent"........................................................................................ 2.03
"Protected Purchaser.................................................................................. 2.07(a)
"Post-Distribution Price"............................................................................. 11.08(b)
"Purchase Notice"..................................................................................... 3.08(a)
"QIB"................................................................................................. 2.01(a)
"Registrar"........................................................................................... 2.03
"Regular Record Date"................................................................................. 10.01
"Relevant Cash Dividends"............................................................................. 11.08(a)
"Restated Principal Amount"........................................................................... 10.01
"Rights".............................................................................................. 11.19
"Rights Agreement".................................................................................... 11.19
"Rule 144A Information"............................................................................... 4.06
"Sale Price".......................................................................................... 3.08(d)
"Securities Act"...................................................................................... 3.08(d)
"Special Record Date"................................................................................. 12.02
"Tax Event Date"...................................................................................... 10.01
"Time of Determination"............................................................................... 11.01
6
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles as in
effect from time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the plural
include the singular.
SECTION 1.05 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments (which may take the form
of an electronic writing or messaging or otherwise be in accordance with
customary procedures of the Depositary or the Trustee) of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing
(which may be in electronic form); and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein
7
sometimes referred to as the "Act" of Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent (either of which may be in electronic form) shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution (or electronic delivery) or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing or delivering such instrument or writing
acknowledged to such officer the execution (or electronic delivery) thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority. The fact and date of the
execution of any such instrument or writing electronic or otherwise, or the
authority of the Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the register maintained
by the Registrar.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a resolution of the Board of Directors, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than six months
after the record date.
8
ARTICLE 2
THE SECURITIES
SECTION 2.01 Form and Dating.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibits A-1 and A-2, which are a part of this
Indenture. The Securities may have notations, legends or endorsements required
by law, stock exchange rule or usage (provided that any such notation, legend or
endorsement required by usage is in a form acceptable to the Company). The
Company shall provide any such notations, legends or endorsements to the Trustee
in writing. Each Security shall be dated the date of its authentication.
(a) 144A Global Securities. Securities offered and sold within the
United States to qualified institutional buyers as defined in Rule 144A
("QIBs") in reliance on Rule 144A shall be issued, initially in the form of
a 144A Global Security, which shall be deposited with the Trustee at its
Corporate Trust Office, as custodian for the Depositary and registered in
the name of The Depository Trust Company ("DTC") or the nominee thereof
(such depositary, or any successor thereto, and any such nominee being
hereinafter referred to as the "Depositary"), duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
Principal Amount at Maturity of the 144A Global Securities may from time to
time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary as hereinafter provided.
(b) Institutional Accredited Investor Securities. Except as provided
in this Section 2.01, 2.06 or 2.12, owners of beneficial interests in
Global Securities will not be entitled to receive physical delivery of
Certificated Securities. Securities offered and sold within the United
States to institutional accredited investors as defined in Rule 501(a)(1),
(2) (3) and (7) under the Securities Act ("Institutional Accredited
Investors") shall be issued, initially in the form of an Institutional
Accredited Investor Security, duly executed by the Company and
authenticated by the Trustee as hereinafter provided.
(c) Global Securities in General. Each Global Security shall represent
such of the outstanding Securities as shall be specified therein and each
shall provide that it shall represent the aggregate Principal Amount at
Maturity of outstanding Securities from time to time endorsed thereon and
that the aggregate Principal Amount at Maturity of outstanding Securities
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions and conversions.
Any adjustment of the aggregate Principal Amount at Maturity of a Global
Security to reflect the amount of any increase or decrease in the Principal
Amount at Maturity of outstanding Securities represented thereby shall be made
by the Trustee in accordance with instructions given by the Holder thereof as
required by Section 2.12 hereof and shall be made on the records of the Trustee
and the Depositary.
9
(d) Book-Entry Provisions. This Section 2.01(d) shall apply only to
Global Securities deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(d), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary, (b) shall
be delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall bear legends substantially to the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS, IN WHOLE
BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF."
(e) Certificated Securities. Securities not issued as interests in the
Global Securities will be issued in certificated form substantially in the
form of Exhibit A-2 attached hereto.
SECTION 2.02 Execution and Authentication.
The Securities shall be executed on behalf of the Company by any Officer.
The signature of the Officer on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of an individual who
was at the time of the execution of the Securities the proper Officer of the
Company shall bind the Company, notwithstanding that such individual has ceased
to hold such office prior to the authentication and delivery of such Securities
or did not hold such office at the date of authentication of such Securities.
10
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer of the
Trustee, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder.
The Trustee shall authenticate and deliver Securities for original issue in
an aggregate Principal Amount at Maturity of up to $930,709,000 upon a Company
Order without any further action by the Company. The aggregate Principal Amount
at Maturity of Securities outstanding at any time may not exceed the amount set
forth in the foregoing sentence, except as provided in Section 2.07.
The Securities shall be issued only in registered form without coupons and
only in denominations of $1,000 of Principal Amount at Maturity and any integral
multiple thereof.
SECTION 2.03 Registrar, Paying Agent, Conversion Agent and Bid Solicitation
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
("Conversion Agent"). The Company shall also appoint a bid solicitation agent
(the "Bid Solicitation Agent") to act pursuant to section 5 of the Securities.
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, including any named pursuant to
Section 4.05. The term Conversion Agent includes any additional conversion
agent, including any named pursuant to Section 4.05.
The Company shall enter into an appropriate agency agreement with any
Registrar or co-registrar, Paying Agent, Conversion Agent or Bid Solicitation
Agent (other than the Trustee). The agreement shall implement the provisions of
this Indenture that relate to such agent. 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, Conversion Agent or Bid Solicitation Agent, the Trustee
shall act as such and shall be entitled to appropriate compensation therefor
pursuant to Section 7.07. The Company or any Subsidiary or an Affiliate of
either of them may act as Paying Agent, Registrar, Conversion Agent or co-
registrar. None of the Company or any Subsidiary or any Affiliate of either of
them may act as Bid Solicitation Agent.
The Company initially appoints the Trustee as Registrar, Conversion Agent,
Paying Agent and Bid Solicitation Agent in connection with the Securities.
SECTION 2.04 Paying Agent to Hold Money and Securities in Trust.
Except as otherwise provided herein, by no later than 10 a.m., New York
City time, on or prior to each due date of payments in respect of any Security,
the Company shall
11
deposit with the Paying Agent a sum of money (in immediately available funds if
deposited on the due date) or Common Stock sufficient to make such payments when
so becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money and Common Stock held by the
Paying Agent for the making of payments in respect of the Securities and shall
notify the Trustee of any default by the Company in making any such payment. At
any time during the continuance of any such default, the Paying Agent shall,
upon the written request of the Trustee, forthwith pay to the Trustee all money
and Common Stock so held in trust. If the Company, a Subsidiary or an Affiliate
of either of them acts as Paying Agent, it shall segregate the money and Common
Stock held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money and Common Stock
held by it to the Trustee and to account for any funds and Common Stock
disbursed by it. Upon doing so, the Paying Agent shall have no further liability
for the money or Common Stock.
SECTION 2.05 Securityholder Lists.
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
Securityholders. If the Trustee is not the Registrar, the Company shall cause to
be furnished to the Trustee at least semiannually on May 1 and November 1 a
listing of Securityholders 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 Securityholders.
SECTION 2.06 Transfer and Exchange.
Subject to Section 2.12 hereof,
(a) upon surrender for registration of transfer of any Security, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by the Securityholder or such Securityholder's attorney duly authorized
in writing, at the office or agency of the Company designated as Registrar or
co-registrar pursuant to Section 2.03, the Company shall execute, and the
Trustee upon receipt of a Company Order shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
any authorized denomination or denominations, of a like aggregate Principal
Amount at Maturity. The Company shall not charge a service charge for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to pay all taxes, assessments or other governmental charges that
may be imposed in connection with the registration of transfer or exchange of
the Securities from the Securityholder requesting such registration of transfer
or exchange.
At the option of the Holder, Certificated Securities may be exchanged for
other Securities of any authorized denomination or denominations, of a like
aggregate Principal Amount at Maturity, upon surrender of the Securities to be
exchanged, together with a written instrument of transfer satisfactory to the
Registrar duly executed by the Securityholder or such Securityholder's attorney
duly authorized in writing, at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee upon
12
receipt of a Company Order shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given and not withdrawn by the Holder thereof
in accordance with the terms of this Indenture (except, in the case of
Securities to be purchased in part, the portion thereof not to be purchased) or
any Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed.
(b) Notwithstanding any provision to the contrary herein, so long as a
Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.12 and this Section 2.06(b). Transfers of a
Global Security shall be limited to transfers of such Global Security in whole,
or in part, to nominees of the Depositary or to a successor of the Depositary or
such successor's nominee.
(c) Successive registrations and registrations of transfers and exchanges
as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.
(d) Any Registrar appointed pursuant to Section 2.03 hereof shall provide
to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon registration
of transfer or exchange of Securities.
(e) No Registrar shall be required to make registrations of transfer or
exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
(f) If Securities are issued upon the registration of transfer, exchange
or replacement of Securities subject to restrictions on transfer and bearing the
legends set forth on the form of Security attached hereto as Exhibits A-1 and
A-2 setting forth such restrictions (collectively, the "Legend"), or if a
request is made to remove the Legend on a Security, the Securities so issued
shall bear the Legend, or the Legend shall not be removed, as the case may be,
unless there is delivered to the Company and the Registrar such satisfactory
evidence, which shall include an Opinion of Counsel, as may be reasonably
required by the Company and the Registrar, that neither the Legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A or Rule 144 under the Securities
Act or that such Securities are not "restricted" within the meaning of Rule 144
under the Securities Act. Upon (i) provision of such satisfactory evidence, or
(ii) notification by the Company to the Trustee and Registrar of the sale of
such Security pursuant to a registration statement that is effective at the time
of such sale, the Trustee, at the written direction of the Company, shall
authenticate and deliver a Security that does not bear the Legend. If the Legend
is removed from the face of a Security and the Security is subsequently held by
an Affiliate of the Company, the Legend shall be reinstated by the Company.
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The Trustee and the Registrar shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Depositary
participants or beneficial owners of interests in any Global Security) other
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
SECTION 2.07 Replacement Securities.
If (a) any mutilated Security is surrendered to the Trustee, or (b) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a protected purchaser within the
meaning of Article 8 of the Uniform Commercial Code as in effect from time to
time in the State of New York (a "Protected Purchaser"), the Company shall
execute and upon its written request the Trustee shall authenticate and deliver,
in exchange for any such mutilated Security or in lieu of any such destroyed,
lost or stolen Security, a new Security of like tenor and Principal Amount at
Maturity, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.08 Outstanding Securities; Determinations of Holders' Action.
Securities outstanding at any time are all the Securities authenticated by
the Trustee except for those cancelled by it, those paid pursuant to Section
2.07 delivered to it for cancellation and those described in this Section 2.08
as not outstanding. A Security does not
14
cease to be outstanding because the Company or an Affiliate thereof holds the
Security; provided, however, that in determining whether the Holders of the
requisite Principal Amount at Maturity of Securities have given or concurred in
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Subject to the foregoing, only Securities outstanding at the time
of such determination shall be considered in any such determination (including,
without limitation, determinations pursuant to Articles 6 and 9).
If a Security is replaced pursuant to Section 2.07, the replaced Security
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to each of them that the replaced Security is held by a Protected
Purchaser unaware that such Security has been replaced.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following the Purchase Date or a Change
in Control Purchase Date, or on Stated Maturity, money or securities, if
permitted hereunder, sufficient to pay Securities payable on that date, then
immediately after such Redemption Date, Purchase Date, Change in Control
Purchase Date or Stated Maturity, as the case may be, such Securities shall
cease to be outstanding and Original Issue Discount and interest (including
contingent interest), if any, on such Securities shall cease to accrue;
provided, that if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture.
If a Security is converted in accordance with Article 11, then from and
after the time of conversion on the Conversion Date, such Security shall cease
to be outstanding and Original Issue Discount and interest (including contingent
interest), if any, shall cease to accrue on such Security.
SECTION 2.09 Temporary Securities.
Pending the preparation of definitive Securities, the Company may execute,
and the Trustee upon receipt of a Company Order shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as conclusively evidenced
by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee upon receipt of
15
a Company Order shall authenticate and deliver in exchange therefor a like
Principal Amount at Maturity of definitive Securities of authorized
denominations. Until so exchanged the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.
SECTION 2.10 Cancellation.
All Securities surrendered for payment, purchase by the Company pursuant to
Article 3, conversion, redemption or registration of transfer or exchange shall,
if surrendered to any person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. The Company may not issue new Securities to replace Securities it has
paid or delivered to the Trustee for cancellation or that any Holder has
converted pursuant to Article 11. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of by the Trustee in accordance with the
Trustee's customary procedure.
SECTION 2.11 Persons Deemed Owners.
Prior to due presentment of a 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 such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of the Security or the payment
of any Redemption Price, Purchase Price or Change in Control Purchase Price in
respect thereof, and interest (including contingent interest, if any) thereon,
for the purpose of conversion and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 2.12 Global Securities.
(a) Notwithstanding any other provisions of this Indenture or the
Securities, (A) transfers of a Global Security, in whole or in part, shall be
made only in accordance with Section 2.06 and Section 2.12(a)(i), (B) transfer
of a beneficial interest in a Global Security for a Certificated Security shall
comply with Section 2.06 and Section 2.12(a)(ii) below, and (C) transfers of a
Certificated Security shall comply with Section 2.06 and Section 2.12(a)(iii)
and (iv) below.
(i) Transfer of Global Security. A Global Security may not be
transferred, in whole or in part, to any Person other than the Depositary
or a nominee or any successor thereof, and no such transfer to any such
other Person may be registered; provided that this clause (i) shall not
prohibit any transfer of a Security that is issued in exchange for a Global
Security but is not itself a Global Security. No transfer of a Security to
any Person shall be effective under this Indenture or the Securities unless
and until such Security has been registered in the name of
16
such Person. Nothing in this Section 2.12(a)(i) shall prohibit or render
ineffective any transfer of a beneficial interest in a Global Security
effected in accordance with the other provisions of this Section 2.12(a).
(ii) Restrictions on Transfer of a Beneficial Interest in a Global
Security for a Certificated Security. A beneficial interest in a Global
Security may not be exchanged for a Certificated Security except upon
satisfaction of the requirements set forth below. Upon receipt by the
Trustee of a request for transfer of a beneficial interest in a Global
Security in accordance with Applicable Procedures for a Certificated
Security in the form satisfactory to the Trustee, together with:
(a) so long as the Securities are Restricted Securities, certification, in
the form set forth in Exhibit B-1, and, if requested by the Company or the
Registrar, certification in the form set forth in Exhibit B-2, that such
beneficial interest in the Global Security is being transferred to an
Institutional Accredited Investor in accordance with subparagraphs (a)(1), (2),
(3) or (7) of Rule 501 under the Securities Act;
(b) written instructions to the Trustee to make, or direct the Registrar to
make, an adjustment on its books and records with respect to such Global
Security to reflect a decrease in the aggregate Principal Amount at Maturity of
the Securities represented by the Global Security, such instructions to contain
information regarding the Depositary account to be credited with such decrease;
and
(c) if the Company or Registrar so requests, an Opinion of Counsel or other
evidence reasonably satisfactory to them as to the compliance with the
restrictions set forth in the Legend,
then the Trustee shall cause, or direct the Registrar to cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Registrar, the aggregate Principal Amount at Maturity of Securities
represented by the Global Security to be decreased by the aggregate Principal
Amount at Maturity of the Certificated Security to be issued, shall authenticate
and deliver such Certificated Security and shall debit or cause to be debited to
the account of the Person specified in such instructions a beneficial interest
in the Global Security equal to the Principal Amount at Maturity of the
Certificated Security so issued.
(iii) Transfer and Exchange of Certificated Securities. When
Certificated Securities are presented to the Registrar with a request:
(x) to register the transfer of such Certificated Securities; or
(y) to exchange such Certificated Securities for an equal
Principal Amount at Maturity of Certificated Securities of other
authorized denominations,
17
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Certificated Securities surrendered for registration of transfer or
exchange:
(a) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing; and
(b) so long as such Securities are Restricted Securities, such
Securities are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act or pursuant to clause (A),
(B) or (C) below, and are accompanied by the following additional
information and documents, as applicable:
(A) if such Certificated Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect; or
(B) if such Certificated Securities are being transferred to the
Company, a certification to that effect; or
(C) if such Certificated Securities are being transferred
pursuant to an exemption from registration (i) a certification to that
effect (in the form set forth in Exhibit B-1 and B-2, if applicable)
and (ii) if the Company or Registrar so requests, an Opinion of
Counsel or other evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the Legend.
(iv) Restrictions on Transfer of a Certificated Security for a
Beneficial Interest in a Global Security. A Certificated Security may not
be exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Certificated Security, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:
(a) so long as the Securities are Restricted Securities,
certification, in the form set forth in Exhibit B-1, that such
Certificated Security is being transferred to a QIB in accordance with
Rule 144A; and
(b) written instructions directing the Trustee to make, or to
direct the Registrar to make, an adjustment on its books and records
with respect to such Global Security to reflect an increase in the
aggregate Principal Amount at Maturity of the Securities represented
by the Global Security, such instructions to contain information
regarding the Depositary account to be credited with such increase,
18
then the Trustee shall cancel such Certificated Security and cause, or
direct the Registrar to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Registrar, the aggregate Principal Amount at Maturity of Securities
represented by the Global Security to be increased by the aggregate
Principal Amount at Maturity of the Certificated Security to be
exchanged, and shall credit or cause to be credited to the account of
the Person specified in such instructions a beneficial interest in the
Global Security equal to the Principal Amount at Maturity of the
Certificated Security so cancelled. If no Global Securities are then
outstanding, the Company shall issue and the Trustee upon receipt of a
Company Order shall authenticate a new Global Security in the
appropriate Principal Amount at Maturity.
(b) Subject to the succeeding paragraph, every Security shall be subject
to the restrictions on transfer provided in the Legend including the delivery of
an Opinion of Counsel, if so provided. Whenever any Restricted Security is
presented or surrendered for registration of transfer or for exchange for a
Security registered in a name other than that of the Holder, such Security must
be accompanied by a certificate in substantially the form set forth in Exhibit
B-1, dated the date of such surrender and signed by the Holder of such Security,
as to compliance with such restrictions on transfer. The Registrar shall not be
required to accept for such registration of transfer or exchange any Security
not so accompanied by a properly completed certificate.
(c) The restrictions imposed by the Legend upon the transferability of any
Security shall cease and terminate when such Security has been sold pursuant to
an effective registration statement under the Securities Act or transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by an Opinion of Counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company, the Trustee and
the Registrar and in form acceptable to the Company, to the effect that the
transfer of such Security has been made in compliance with Rule 144 or such
successor provision), be exchanged for a new Security, of like tenor and
aggregate Principal Amount at Maturity, which shall not bear the restrictive
Legend. The Company shall inform the Trustee of the effective date of any
registration statement registering the Securities under the Securities Act. The
Trustee and the Registrar shall not be liable for any action taken or omitted to
be taken by it in good faith in accordance with the aforementioned Opinion of
Counsel or registration statement.
(d) As used in the preceding two paragraphs of this Section 2.12, the term
"transfer" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Security.
19
(e) The provisions of clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:
(1) Notwithstanding any other provisions of this Indenture or the
Securities, except as provided in Section 2.12(a)(ii), a Global
Security shall not be exchanged in whole or in part for a
Security registered in the name of any Person other than the
Depositary or one or more nominees thereof, provided that a
Global Security may be exchanged for Securities registered in the
names of any person designated by the Depositary in the event
that (i) the Depositary has notified the Company that it is
unwilling or unable to continue as Depositary for such Global
Security or such Depositary has ceased to be a "clearing agency"
registered under the Exchange Act, and a successor Depositary is
not appointed by the Company within 90 days, (ii) the Company
decides to discontinue use of the system of book-entry transfer
through DTC (or any successor depositary); or (iii) an Event of
Default has occurred and is continuing with respect to the
Securities. Any Global Security exchanged pursuant to clause (i)
or (ii) above shall be so exchanged in whole and not in part, and
any Global Security exchanged pursuant to clause (iii) above may
be exchanged in whole or from time to time in part as directed by
the Depositary. Any Security issued in exchange for a Global
Security or any portion thereof shall be a Global Security;
provided that any such Security so issued that is registered in
the name of a Person other than the Depositary or a nominee
thereof shall not be a Global Security.
(2) Securities issued in exchange for a Global Security or any
portion thereof shall be issued in definitive, fully registered
form, without interest coupons, shall have an aggregate Principal
Amount at Maturity equal to that of such Global Security or
portion thereof to be so exchanged, shall be registered in such
names and be in such authorized denominations as the Depositary
shall designate and shall bear the applicable legends provided
for herein. Any Global Security to be exchanged in whole shall be
surrendered by the Depositary to the Trustee, as Registrar. With
regard to any Global Security to be exchanged in part, either
such Global Security shall be so surrendered for exchange or, if
the Trustee is acting as custodian for the Depositary or its
nominee with respect to such Global Security, the Principal
Amount at Maturity thereof shall be reduced, by an amount equal
to the portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the Trustee. Upon
any such surrender or adjustment, the Trustee shall authenticate
and deliver the Security issuable on such exchange to or upon the
order of the Depositary or an authorized representative thereof.
(3) Subject to the provisions of clause (5) below, the registered
Holder may grant proxies and otherwise authorize any Person,
including Agent Members (as defined below) and persons that may
hold interests through
20
Agent Members, to take any action which a holder is entitled
totake under this Indenture or the Securities.
(4) In the event of the occurrence of any of the events specified in
clause (1) above, the Company will promptly make available to the
Trustee a reasonable supply of Certificated Securities in
definitive, fully registered form, without interest coupons.
(5) Neither any members of, or participants in, the Depositary
(collectively, the "Agent Members") nor any other Persons on
whose behalf Agent Members may act shall have any rights under
this Indenture with respect to any Global Security registered in
the name of the Depositary or any nominee thereof, or under any
such Global Security, and the Depositary or such nominee, as the
case may be, may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner and
holder of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or such nominee, as the
case may be, or impair, as between the Depositary, its Agent
Members and any other person on whose behalf an Agent Member may
act, the operation of customary practices of such Persons
governing the exercise of the rights of a holder of any Security.
SECTION 2.13 CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01 Right to Redeem; Notices to Trustee.
The Company, at its option, may redeem the Securities in accordance with
the provisions of sections 6 and 8 of the Securities. If the Company elects to
redeem Securities pursuant to section 6 of the Securities, it shall notify the
Trustee in writing of the Redemption Date, the Principal Amount at Maturity of
Securities to be redeemed, the Redemption Price and the amount of semiannual and
contingent interest, if any, payable on the Redemption Date.
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The Company shall give the notice to the Trustee provided for in this
Section 3.01 by a Company Order, at least 20 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee).
SECTION 3.02 Selection of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed pro rata or by lot or by any other method
the Trustee considers fair and appropriate (so long as such method is not
prohibited by the rules of any stock exchange on which the Securities are then
listed). The Trustee shall make the selection at least 15 days but not more than
60 days before the Redemption Date from outstanding Securities not previously
called for redemption.
Securities and portions of them the Trustee selects shall be in Principal
Amounts at Maturity of $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly of the Securities or portions of Securities to be redeemed.
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 (so far as
may be) to be 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.
SECTION 3.03 Notice of Redemption.
At least 15 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 and, to the extent known at the time of such
notice, the amount of semiannual and contingent interest, if any,
payable on the Redemption Date;
(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 second Business Day
immediately preceding the Redemption Date;
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(6) that Holders who want to convert Securities must satisfy the
requirements set forth in section 9 of the Securities;
(7) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price and semiannual and
contingent interest, if any;
(8) if fewer than all the outstanding Securities are to be redeemed,
the certificate number and Principal Amounts at Maturity of the
particular Securities to be redeemed;
(9) that, unless the Company defaults in making payment of such
Redemption Price and semiannual and contingent interest, if any,
Original Issue Discount and interest (including semiannual and
contingent interest), if any, on Securities called for redemption
will cease to accrue on and after the Redemption Date; and
(10) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense, provided that the Company
makes such request at least five Business Days (unless a shorter period shall be
satisfactory to the Trustee) prior to the date such notice of redemption must be
mailed.
SECTION 3.04 Effect of Notice of Redemption.
Once notice of redemption is given, Securities called for redemption become
due and payable on the Redemption Date and at the Redemption Price (together
with accrued semiannual and contingent interest, if any, to but not including
the date of redemption) stated in the notice except for Securities which are
converted in accordance with the terms of this Indenture. Upon surrender to the
Paying Agent, such Securities shall be paid at the Redemption Price (together
with accrued semiannual and contingent interest, if any, to but not including
the date of redemption) stated in the notice.
SECTION 3.05 Deposit of Redemption Price.
Prior to 10:00 a.m. (New York City time) on any Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company or a Subsidiary
or an Affiliate of either of them is the Paying Agent, shall segregate and hold
in trust) money sufficient to pay the Redemption Price of, and any accrued and
unpaid semiannual and contingent interest to but not including the date of
redemption with respect to, all Securities to be redeemed on that date other
than Securities or portions of Securities called for redemption which on or
prior thereto have been delivered by the Company to the Trustee for cancellation
or have been converted. The Paying Agent shall as promptly as practicable return
to the Company any money, not required for that purpose because of conversion of
Securities pursuant to Article 11. 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.
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SECTION 3.06 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 Amount at Maturity to
the unredeemed portion of the Security surrendered.
SECTION 3.07 Conversion Arrangement on Call for Redemption.
In connection with any redemption of Securities, the Company may arrange at
or shortly before the time of the redemption for the purchase and conversion of
any Securities called for redemption by an agreement with one or more investment
banks or other purchasers to purchase such Securities by paying to the Trustee
in trust for the Securityholders, on or prior to 10:00 a.m. New York City time
on the Redemption Date, an amount that, together with any amounts deposited with
the Trustee by the Company for the redemption of such Securities, is not less
than the Redemption Price of, and any accrued and unpaid semiannual and
contingent interest with respect to, such Securities. Notwithstanding anything
to the contrary contained in this Article 3, the obligation of the Company to
pay the Redemption Prices 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 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 as of immediately prior to the close of
business on the Business Day prior to the Redemption Date, subject to payment of
the above amount as aforesaid. The Trustee shall hold and pay to the Holders
whose Securities are selected for redemption any such amount paid to it for
purchase and conversion in the same manner as it would moneys deposited with it
by the Company for the redemption of Securities. Without the Trustee'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 Trustee as set
forth in this Indenture, and the Company agrees to indemnify the Trustee 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 Trustee 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 3.08 Purchase of Securities at Option of the Holder.
(a) General. Securities shall be purchased by the Company pursuant to
section 7(a) of the Securities 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 at least 20 Business Days prior to a Purchase Date until
the close of business on such Purchase Date stating:
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(A) the certificate number of the Security which the Holder will
deliver to be purchased,
(B) the portion of the Principal Amount at Maturity of the
Security which the Holder will deliver to be purchased, which portion
must be a Principal Amount at Maturity of $1,000 or an integral
multiple thereof,
(C) that such Security shall be purchased as of the Purchase Date
pursuant to the terms and conditions specified in section 7 of the
Securities and in this Indenture, and
(D) in the event the Company elects, pursuant to Section 3.08(b),
to pay the Purchase Price to be paid as of such Purchase Date, in
whole or in part, in shares of Common Stock but such portion of the
Purchase Price shall ultimately be payable to such Holder entirely in
cash because any of the conditions to payment of the Purchase Price in
Common Stock is not satisfied prior to the close of business on such
Purchase Date, as set forth in Section 3.08(d), whether such Holder
elects (i) to withdraw such Purchase Notice as to some or all of the
Securities to which such Purchase Notice relates (stating the
Principal Amount at Maturity and certificate numbers of the Securities
as to which such withdrawal shall relate), or (ii) 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 3.08 only if the
Security so delivered to the Paying Agent shall conform in all respects to
the description thereof in the related Purchase Notice, as determined by
the Company.
If a Holder, in such Holder's Purchase Notice and in any written notice of
withdrawal delivered by such Holder pursuant to the terms of Section 3.10, fails
to indicate such Holder's choice with respect to the election set forth in
clause (D) of Section 3.08(a)(1), such Holder shall be deemed to have elected to
receive cash in respect of the 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 3.08, a portion of a Security if the Principal Amount at Maturity 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 3.08 shall be consummated by the delivery of the consideration to be
received by the Holder (including accrued and unpaid semiannual and contingent
interest, if any) promptly following the later of the Purchase Date and the time
of delivery of the Security.
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Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Purchase Notice contemplated by this Section 3.08(a) shall
have the right to withdraw such Purchase Notice at any time prior to the close
of business on the Purchase Date 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
Securities to be purchased pursuant to Section 3.08(a) may be paid for, at the
election of the Company, 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 3.08(c) and (d). The Company shall designate, in the Company Notice
delivered pursuant to Section 3.08(e), whether the Company will purchase the
Securities for cash or Common Stock, or, if a combination thereof, the
percentages or amounts of the Purchase Price of Securities in respect of which
it will pay in cash or Common Stock; provided that the Company will pay cash for
fractional interests in 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 3.08 shall receive the same percentage of
cash or Common Stock in payment of the Purchase Price for such Securities,
except (i) as provided in Section 3.08(d) with regard to the payment of cash in
lieu of fractional shares of 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 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
Securityholders except pursuant to this Section 3.08(b) or pursuant to Section
3.08(d) in the event of a failure to satisfy, prior to the close of business on
the Purchase Date, any condition to the payment of the Purchase Price, in whole
or in part, in Common Stock.
At least three Business Days before the Company Notice Date, 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 3.08(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 3.08(d) have been or will be complied with,
and
(iv) whether the Company desires the Trustee to give the Company Notice
required by Section 3.08(e).
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(c) Purchase with Cash. On each Purchase Date, at the option of the
Company, the Purchase Price of Securities in respect of which a Purchase Notice
pursuant to Section 3.08(a) has been given, or a specified percentage thereof,
may be paid by the Company with cash equal to the aggregate Purchase Price of
such Securities. If the Company elects to purchase Securities with cash, the
Company Notice, as provided in Section 3.08(e), shall be sent to Holders (and to
beneficial owners as required by applicable law) not less than 20 Business Days
prior to such Purchase Date (the "Company Notice Date").
(d) Payment by Issuance of Common Stock. On each Purchase Date, at the
option of the Company, the Purchase Price of Securities in respect of which a
Purchase Notice pursuant to Section 3.08(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 Securityholders would have 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, the Company Notice, as provided in Section 3.08(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 3.08 through the issuance of shares of Common Stock shall be
conditioned upon:
(i) the Company's not having given its Company Notice of an election
to pay entirely in cash and its giving of timely Company Notice of election
to purchase all or a specified percentage of the Securities with Common
Stock as provided herein;
(ii) the shares of Common Stock having been admitted for listing or
admitted for listing subject to notice of issuance on the principal United
States securities exchange on which the Common Stock is then listed or, if
the Common Stock is not then listed on a national or regional securities
exchange, as quoted on the National Association of Securities Dealers
Automated Quotation System;
(iii) the registration of the shares of Common Stock to be issued in
respect of the payment of the Purchase Price under the Securities Act of
1933, as amended (the "Securities Act"), or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), in each case, if required;
27
(iv) any necessary qualification or registration under applicable
state securities laws or the availability of an exemption from such
qualification and registration; and
(v) 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 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
Purchase Price in respect of the Securities, will be validly issued, fully
paid and non-assessable and, to the best of such counsel's knowledge, free
from preemptive rights, and, in the case of such Officers' Certificate,
stating that conditions (i), (ii), (iii) and (iv) above and the condition
set forth in the second succeeding sentence have been satisfied and, in the
case of such Opinion of Counsel, stating that conditions (ii), (iii) and
(iv) 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 Amount at Maturity of
Securities and the Sale Price of a share of Common Stock on each trading day
during the period for which the Market Price is calculated. The Company may pay
the Purchase Price (or any portion thereof) in Common Stock only if the
information necessary to calculate the Market Price is published in a daily
newspaper of national circulation. If the foregoing conditions are not satisfied
with respect to a Holder or Holders prior to the close of business on the
Purchase Date and the Company has elected to purchase the Securities pursuant to
this Section 3.08 through the issuance of shares of Common Stock, the Company
shall pay the entire Purchase Price of the 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 not, then on the last trading day prior to
such 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 11.06, 11.07 or 11.08; subject, however, to the
conditions set forth in Sections 11.09 and 11.10.
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 in the composite
transactions for the principal United States securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United States
national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System or by the National
Quotation Bureau Incorporated.
(e) Notice of Election. The Company's notice of election to purchase with
cash or Common Stock or any combination thereof shall be sent to the Holders
(and to beneficial
28
owners as required by applicable law) in the manner provided in Section 13.02 at
the time specified in Section 3.08(c) or (d), as applicable (the "Company
Notice"). Such Company Notice shall state the manner of payment elected and
shall contain the following information:
In the event the Company has elected to pay the 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
shares);
(2) set forth the method of calculating the Market Price of the Common
Stock; and
(3) state that because the Market Price of Common Stock will be
determined prior to the Purchase Date, 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 PurchaseNotice to
be completed by a Securityholder and shall state:
(i) the Purchase Price, the Conversion Rate and, to the extent known
at the time of such notice, the amount of semiannual and contingent
interest, if any, that will be accrued and payable with respect to the
Securities as of the Purchase Date;
(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 pursuant to Article 11 hereof 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 of the Purchase Price and semiannual and contingent
interest, if any;
(v) that the Purchase Price for any Security as to which a Purchase
Notice has been given and not withdrawn, together with any accrued
semiannual and contingent interest payable with respect thereto, 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 to exercise rights under
Section 3.08 and a brief description of those rights;
(vii) briefly, the conversion rights of the Securities;
29
(viii) the procedures for withdrawing a Purchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms
of Section 3.08(a)(1)(D) or Section 3.10);
(ix) that, unless the Company defaults in making payment of
suchPurchase Price and semiannual and contingent interest, if any,
Original Issue Discount and interest (including semiannual and
contingent interest), if any, on Securities surrendered for purchase
will cease to accrue on and after the Purchase Date; and
(x)the CUSIP number of the Securities.
At the Company's request, the Trustee shall give such Company Notice in the
Company's name and at the Company's expense; provided, however, that, in all
cases, the text of such Company Notice shall be prepared by the Company.
Upon determination of the actual number of shares of Common Stock to be
delivered for each $1,000 Principal Amount at Maturity of Securities, the
Company will issue a press release and publish such determination on the
Company's web site.
(f) Covenants of the Company. All shares of Common Stock delivered upon
purchase of the Securities shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and nonassessable and shall
be free from preemptive rights and free of any lien or adverse claim created by
or arising through the Company.
(g) Procedure upon Purchase. The Company shall deposit cash (in respect of
a cash purchase under Section 3.08(c) or for fractional interests or for any
accrued and unpaid semiannual or contingent interest, as applicable) or shares
of Common Stock, or a combination thereof, as applicable, at the time and in the
manner as provided in Section 3.11, sufficient to pay the aggregate Purchase
Price of, and any accrued and unpaid semiannual and contingent interest with
respect to, all Securities to be purchased pursuant to this Section 3.08. As
soon as practicable after the Purchase Date, the Company shall deliver to each
Holder entitled to receive Common Stock through the Paying Agent, a certificate
for the number of full shares of Common Stock issuable in payment of the
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 of shares of Common Stock on the Business Day following the Purchase
Date. 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.
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SECTION 3.09 Purchase of Securities at Option of the Holder upon Change in
Control.
(a) If on or prior to the date specified in section 7(b) of the Securities,
there shall have occurred a Change in Control, Securities shall be purchased by
the Company, at the option of the Holder thereof, at a purchase price specified
in section 7(b) of the Securities (the "Change in Control Purchase Price"), as
of the date that is no later than 35 Business Days after the occurrence of the
Change in Control but in no event prior to the date on which such Change in
Control occurs (the "Change in Control Purchase Date"), subject to satisfaction
by or on behalf of the Holder of the requirements set forth in Section 3.09(c).
A "Change in Control" shall be deemed to have occurred at such time as
either of the following events shall occur:
(i) There shall be consummated any share exchange, consolidation or
merger of the Company pursuant to which the Common Stock would be
converted into cash, securities or other property, in each case other
than a share exchange, consolidation or merger of the Company in which
the holders of the Common Stock immediately prior to the share
exchange, consolidation or merger have, directly or indirectly, at
least a majority of the total voting power in the aggregate of all
classes of Capital Stock of the continuing or surviving corporation
immediately after the share exchange, consolidation or merger; or
(ii) There is a report filed on Schedule 13D or TO (or any successor
schedule, form or report) pursuant to the Exchange Act, disclosing
that any person (for the purposes of this Section 3.09 only, as the
term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act) or any such person's Affiliates or Associates has become
the beneficial owner (as the term "beneficial owner" is defined under
Rule 13d-3 or any successor rule or regulation promulgated under the
Exchange Act) of 50% or more of the voting power of the Common Stock
then outstanding; provided, however, that a person shall not be deemed
beneficial owner of, or to own beneficially, (A) any securities
tendered pursuant to a tender or exchange offer made by or on behalf
of such person or any of such person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange
thereunder, or (B) any securities if such beneficial ownership (1)
arises solely as a result of a revocable proxy delivered in response
to a proxy or consent solicitation made pursuant to the applicable
rules and regulations under the Exchange Act, and (2) is not also then
reportable on Schedule 13D (or any successor schedule) under the
Exchange Act.
Notwithstanding the foregoing provisions of this Section 3.09, a Change in
Control shall not be deemed to have occurred by virtue of the Company, any
Subsidiary, any employee stock ownership plan or any other employee benefit plan
of the Company or any Subsidiary, or any person holding Common Stock for or
pursuant to the terms of any such employee benefit plan, filing or becoming
obligated to file a report under or in response to Schedule 13D or Schedule TO
(or any successor schedule, form or report) under the Exchange Act disclosing
beneficial ownership by it of shares of Common Stock, whether in excess of 50%
31
or otherwise. Further, for the avoidance of doubt, a Change in Control shall not
be deemed to have occurred by virtue solely of Thomas H. Bailey ceasing at any
time to have the contractual right to nominate a majority of the board of
directors of Janus Capital Corporation.
"Associate" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.
(b) Within 15 Business Days after the occurrence of a Change in Control,
the Company shall mail a written notice of Change in Control by first- class
mail to the Trustee and to each Holder (and to beneficial owners as required by
applicable law). The notice shall include a form of Change in Control Purchase
Notice to be completed by the Securityholder and shall state:
(1) briefly, the events causing a Change in Control and the date of
such Change in Control;
(2) the date by which the Change in Control Purchase Notice pursuant
to this Section 3.09 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price and, to the extent known at
the time of such notice, the amount of semiannual and contingent
interest, if any, that will be accrued and payable with respect to the
Securities as of the Change in Control Purchase Date;
(5) the name and address of the Paying Agent and the Conversion Agent;
(6) the Conversion Rate and any adjustments thereto;
(7) that Securities as to which a Change in Control Purchase Notice
has been given may be converted pursuant to Article 11 hereof only if
the Change in Control Purchase Notice has been withdrawn in accordance
with the terms of this Indenture;
(8) that Securities must be surrendered to the Paying Agent to collect
payment of the Change in Control Purchase Price and semiannual and
contingent interest, if any;
(9) that the Change in Control Purchase Price for any Security as to
which a Change in Control Purchase Notice has been duly given and not
withdrawn, together with any accrued semiannual and contingent
interest payable with respect thereto, will be paid promptly following
the later of the Change in Control Purchase Date and the time of
surrender of such Security as described in (8);
(10) briefly, the procedures the Holder must follow to exercise rights
under this Section 3.09;
32
(11) briefly, the conversion rights of the Securities;
(12) the procedures for withdrawing a Change in Control Purchase
Notice;
(13) that, unless the Company defaults in making payment of such
Change in Control Purchase Price and semiannual and contingent
interest, if any, Original Issue Discount and interest (including
semiannual and contingent interest), if any, on Securities surrendered
for purchase will cease to accrue on and after the Change in Control
Purchase Date; and
(14) the CUSIP number of the Securities.
(c) A Holder may exercise its rights specified in Section 3.09(a) upon
delivery of a written notice of purchase (a "Change in Control Purchase Notice")
to the Paying Agent at any time prior to the close of business on the Change in
Control Purchase Date, stating:
(1) the certificate number of the Security which the Holder will
deliver to be purchased;
(2) the portion of the Principal Amount at Maturity of the Security
which the Holder will deliver to be purchased, which portion must be
$1,000 or an integral multiple thereof; and
(3) that such Security shall be purchased pursuant to the terms and
conditions specified in section 7 of the Securities.
The delivery of such Security to the Paying Agent prior to, on or after the
Change in Control Purchase Date (together with all necessary endorsements) at
the offices of the Paying Agent shall be a condition to the receipt by the
Holder of the Change in Control Purchase Price therefor; provided, however, that
such Change in Control Purchase Price shall be so paid pursuant to this Section
3.09 only if the Security so delivered to the Paying Agent shall conform in all
respects to the description thereof set forth in the related Change in Control
Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Security if the Principal Amount at Maturity 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 3.09 shall be consummated by the delivery of the consideration to be
received by the Holder (together with accrued and unpaid semiannual and
contingent interest, if any) promptly following the later of the Change in
Control Purchase Date and the time of delivery of the Security to the Paying
Agent in accordance with this Section 3.09.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 3.09(c) shall have the right to withdraw such Change in Control Purchase
Notice at any time prior to the close
33
of business on the Change in Control Purchase Date 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 Change in Control Purchase Notice or written withdrawal thereof.
The Company shall not be required to comply with this Section 3.09 if a
third party mails a written notice of Change in Control in the manner, at the
times and otherwise in compliance with this Section 3.09 and repurchases all
Securities for which a Change in Control Purchase Notice shall be delivered and
not withdrawn.
SECTION 3.10 Effect of Purchase Notice or Change in Control Purchase
Notice.
Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 3.08(a) or Section 3.09(c), as
applicable, the Holder of the Security in respect of which such Purchase Notice
or Change in Control Purchase Notice, as the case may be, was given shall
(unless such Purchase Notice or Change in Control Purchase Notice is withdrawn
as specified in the following two paragraphs) thereafter be entitled to receive
solely the Purchase Price or Change in Control Purchase Price, as the case may
be, and any accrued and unpaid semiannual and contingent interest, with respect
to such Security. Such Purchase Price or Change in Control Purchase Price and
semiannual and contingent interest, if any, shall be paid to such Holder,
subject to receipt of funds and/or securities by the Paying Agent, promptly
following the later of (x) the Purchase Date or the Change in Control Purchase
Date, as the case may be, with respect to such Security (provided the conditions
in Section 3.08(a) or Section 3.09(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 3.08(a) or Section 3.09(c), as
applicable. Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice, as the case may be, has been given by the Holder
thereof may not be converted pursuant to Article 11 hereof on or after the date
of the delivery of such Purchase Notice or Change in Control Purchase Notice, as
the case may be, unless such Purchase Notice or Change in Control Purchase
Notice, as the case may be, has first been validly withdrawn as specified in the
following two paragraphs.
A Purchase Notice or Change in Control Purchase 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 in accordance with the Purchase Notice or Change in
Control Purchase Notice, as the case may be, at any time prior to the close of
business on the Purchase Date or the Change in Control Purchase Date, as the
case may be, specifying:
(1) the certificate number of the Security in respect of which such notice
of withdrawal is being submitted,
(2) the Principal Amount at Maturity of the Security with respect to which
such notice of withdrawal is being submitted, and
34
(3) the Principal Amount at Maturity, if any, of such Security which
remains subject to the original Purchase Notice or Change in Control
Purchase Notice, as the case may be, and which has been or will be
delivered for purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the form set
forth in the preceding paragraph or may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of Section
3.08(a)(1)(D) or (ii) a conditional withdrawal containing the information set
forth in Section 3.08(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 3.08
(other than through the issuance of Common Stock in payment of the Purchase
Price, including cash in lieu of fractional shares) or 3.09 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 Change in Control
Purchase 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 Change in Control
Purchase Price, as the case may be, and any accrued and unpaid semiannual and
contingent interest with respect to such Securities). The Paying Agent will
promptly return to the respective Holders thereof any Securities (x) with
respect to which a Purchase Notice or Change in Control Purchase Notice, as the
case may be, has been withdrawn in compliance with this Indenture, or (y) held
by it during the continuance of an Event of Default (other than a default in the
payment of the Purchase Price or Change in Control Purchase Price, as the case
may be, and any accrued and unpaid semiannual and contingent interest with
respect to such Securities) in which case, upon such return, the Purchase Notice
or Change in Control Purchase Notice with respect thereto shall be deemed to
have been withdrawn.
SECTION 3.11 Deposit of Purchase Price or Change in Control Purchase Price.
Prior to 10:00 a.m. (local time in The City of New York) on the Business
Day following the Purchase Date or the Change in Control Purchase Date, as the
case may be, the Company shall deposit with the Trustee or with the Paying Agent
(or, if the Company or a Subsidiary or an Affiliate of either of them is acting
as the Paying Agent, shall segregate and hold in trust as provided in Section
2.04) an amount of money (in immediately available funds if deposited on such
Business Day) or Common Stock, if permitted hereunder, sufficient to pay the
aggregate Purchase Price or Change in Control Purchase Price, as the case may
be, of, and any accrued and unpaid semiannual and contingent interest with
respect to, all the Securities or portions thereof which are to be purchased as
of the Purchase Date or Change in Control Purchase Date, as the case may be.
SECTION 3.12 Securities Purchased in Part.
Any Security which is to be purchased 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
35
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 Amount at Maturity equal to, and in exchange for, the
portion of the Principal Amount at Maturity of the Security so surrendered which
is not purchased.
SECTION 3.13 Covenant to Comply With Securities Laws Upon Purchase of
Securities.
In connection with any offer to purchase or purchase of Securities under
Section 3.08 or 3.09 hereof (provided that such offer or purchase constitutes an
"issuer tender offer" for purposes of Rule 13e-4 (which term, as used herein,
includes any successor provision thereto) under the Exchange Act at the time of
such offer or purchase), the Company shall to the extent applicable (i) comply
with Rule 13e-4 and Rule 14e-1 under the Exchange Act, (ii) file the related
Schedule TO (or any successor schedule, form or report) under the Exchange Act,
and (iii) otherwise comply with all Federal and state securities laws so as to
permit the rights and obligations under Sections 3.08 and 3.09 to be exercised
in the time and in the manner specified in Sections 3.08 and 3.09.
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 that remain unclaimed as provided in section 15 of the
Securities, together with interest or dividends, if any, thereon (subject to the
provisions of Section 7.01(f)), held by them for the payment of the Purchase
Price or Change in Control Purchase Price, as the case may be, or semiannual and
contingent interest, if any; 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 Change in
Control Purchase Price, as the case may be, of, and the accrued and unpaid
semiannual and contingent interest, if any, with respect to, the Securities or
portions thereof which the Company is obligated to purchase as of the Purchase
Date or Change in Control Purchase Date, as the case may be, whether as a result
of withdrawal or otherwise, then promptly after the Business Day following the
Purchase Date or Change in Control Purchase Date, as the case may be, the
Trustee shall return any such excess to the Company together with interest or
dividends, if any, thereon (subject to the provisions of Section 7.01(f)).
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall promptly make all payments in respect of the Securities
on the dates and in the manner provided in the Securities or pursuant to this
Indenture. Any amounts to be given to the Trustee or Paying Agent, shall be
deposited with the Trustee or Paying Agent by 10:00 a.m., New York City time, by
the Company. Principal Amount at
36
Maturity, Restated Principal Amount, Issue Price plus accrued Original Issue
Discount, Redemption Price, Purchase Price, Change in Control Purchase Price,
semiannual and contingent interest, if any, shall be considered paid on the
applicable date due if on such date (or, in the case of a Purchase Price or
Change in Control Purchase Price, on the Business Day following the applicable
Purchase Date or Change in Control Purchase Date, as the case may be) the
Trustee or the Paying Agent holds, in accordance with this Indenture, money or
securities, if permitted hereunder, sufficient to pay all such amounts then due.
The Company shall, to the extent permitted by law, pay interest on overdue
amounts at the rate per annum set forth in section 1 of the Securities,
compounded semiannually, which interest shall accrue from the date such overdue
amount was originally due to the date payment of such amount, including interest
thereon, has been made or duly provided for. All such interest shall be payable
on demand.
SECTION 4.02 SEC and Other Reports.
The Company shall file with the Trustee, within 15 days after it files such
annual and quarterly reports, information, documents and other reports with the
SEC, copies of its annual report and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act. In the event the
Company is at any time no longer subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, it shall continue to provide the
Trustee with reports containing substantially the same information as would have
been required to be filed with the SEC had the Company continued to have been
subject to such reporting requirements. In such event, such reports shall be
provided at the times the Company would have been required to provide reports
had it continued to have been subject to such reporting requirements. The
Company also shall comply with the other provisions of TIA Section 314(a).
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of the same shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.03 Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the end of
each fiscal year of the Company (beginning with the fiscal year ending on
December 31, 2001) an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which they may have knowledge.
37
SECTION 4.04 Further Instruments and Acts.
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
SECTION 4.05 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency of the Trustee, Registrar, Paying Agent and Conversion
Agent where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer, exchange, purchase,
redemption or conversion and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The office of The
Chase Manhattan Bank, located at 450 West 33rd Street, New York, NY, 10001
(Attention: Institutional Trust Services) shall initially be such office or
agency for all of the aforesaid purposes. The Company shall give prompt written
notice to the Trustee of the location, and of any change in the location, of any
such office or agency (other than a change in the location of the office of the
Trustee). If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 13.02.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes.
SECTION 4.06 Delivery of Certain Information.
At any time when the Company is not subject to Section 13 or 15(d) of the
Exchange Act, upon the request of a Holder or any beneficial holder of
Securities or shares of Common Stock, which are restricted securities issued
upon conversion thereof, the Company will promptly furnish or cause to be
furnished Rule 144A Information (as defined below) to such Holder or any
beneficial holder of Securities or holder of shares of Common Stock issued upon
conversion of Securities, or to a prospective purchaser of any such security
designated by any such holder, as the case may be, to the extent required to
permit compliance by such Holder or holder with Rule 144A under the Securities
Act in connection with the resale of any such security. "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act.
SECTION 4.07 Calculation of Original Issue Discount.
The Company agrees, and each Holder and any beneficial owner of a Security
by its purchase thereof shall be deemed to agree, to treat, for United States
federal income tax purposes, the Securities as debt instruments that are subject
to Section 1.1275-4(b) of the treasury regulations promulgated by the Department
of Treasury pursuant to the Internal
38
Revenue Code of 1986, as amended (the "Treasury Regulations"). For United States
federal income tax purposes, the Company shall accrue interest with respect to
outstanding Securities as original issue discount according to the
"noncontingent bond method," set forth in section 1.1275-4(b) of the Treasury
Regulations, using the comparable yield set forth in Annex C to this Indenture
compounded semiannually and the projected payment schedule attached as Annex C
to this Indenture. The Company shall file with the Trustee promptly at the end
of each calendar year (i) a written notice specifying the amount of original
issue discount for United States federal income tax purposes (including daily
rates and accrual periods) accrued on outstanding Securities as of the end of
such year and (ii) such other specific information relating to such original
issue discount as may then be relevant under the Internal Revenue Code of 1986,
as amended from time to time, including the amount of any adjustment made under
the noncontingent bond method to account for the amount of any difference
between the amount of an actual payment and the amount of a projected payment.
The Company acknowledges and agrees, and each Holder and any beneficial
holder of a Security by its purchase thereof shall be deemed to acknowledge and
agree, that (i) the comparable yield means the annual yield the Company would
pay, as of the Issue Date, on a fixed-rate nonconvertible debt security with no
contingent payments, but with terms and conditions otherwise comparable to those
of the LYONs, (ii) the schedule of projected payments is determined on the basis
of an assumption of linear growth of the stock price and a constant dividend
yield and is not determined for any purpose other than for the determination of
interest accruals and adjustments thereof in respect of the Securities for
United States federal income tax purposes and (iii) the comparable yield and the
schedule of projected payments do not constitute a projection or representation
regarding the amounts payable on the Securities.
SECTION 4.08 Rating.
The Company will use its best reasonable efforts to obtain a credit rating
on the Securities from Moody's Investors Service, Inc. or from Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When Company May Merge or Transfer Assets.
The Company shall not consolidate with or merge with or into any other
person or convey, transfer or lease all or substantially all of its properties
and assets to any person, unless:
(a) either (1) the Company shall be the continuing corporation or (2) the
person (if other than the Company) formed by such consolidation or into which
the Company is merged or the person which acquires by conveyance, transfer or
lease the properties and assets of the Company substantially as an entirety (i)
shall be organized and validly existing under the laws of the United States or
any State thereof or the District of Columbia and (ii) shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the Trustee, in
form
39
satisfactory to the Trustee, all of the obligations of the Company under the
Securities and this Indenture;
(b) immediately after giving effect to such transaction, no Default shall
have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article 5 and that all conditions precedent herein provided for
relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of the properties and assets of one or more Subsidiaries (other than
to the Company or another Subsidiary), which, if such assets were owned by the
Company, would constitute all or substantially all of the properties and assets
of the Company, shall be deemed to be the transfer of all or substantially all
of the properties and assets of the Company.
The successor person formed by such consolidation or into which the Company
is merged or the successor person to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor had been named as the Company herein; and thereafter, except in the
case of a lease and any obligations the Company may have under a supplemental
indenture pursuant to Section 11.14, the Company shall be discharged from all
obligations and covenants under this Indenture and the Securities. Subject to
Section 9.06, the Company, the Trustee and the successor person shall enter into
a supplemental indenture to evidence the succession and substitution of such
successor person and such discharge and release of the Company.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in payment of any contingent interest or of any
semiannual interest which becomes payable pursuant to Section 10.01
following the occurrence of a Tax Event or pursuant to Section 10.02 as a
result of the Company's failure to obtain a Required Rating, which default,
in any case, continues for 30 days;
(2) the Company defaults in the payment of the Principal Amount at Maturity
(or, if the Securities have been converted to semiannual coupon notes
following a Tax Event pursuant to Article 10, the Restated Principal
Amount), Issue Price plus accrued Original Issue Discount, Redemption
Price, Purchase Price or
40
Change in Control Purchase 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;
(3) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in clauses (1)
and (2) above) and such failure continues for 60 days after receipt by the
Company of a Notice of Default;
(4) (a) the Company fails to make any payment by the end of any applicable
grace period after maturity of Debt in an amount in excess of $10,000,000
and continuance of such failure, or (b) the acceleration of Debt has
occurred in an amount in excess of $10,000,000 because of a default with
respect to such Debt without such Debt having been discharged or such
acceleration having been cured, waived, rescinded or annulled, in the case
of (a) or (b) above, for a period of 30 days after receipt by the Company
of a Notice of Default; provided, however, that if any such failure or
acceleration referred to in (a) or (b) above shall cease or be cured,
waived, rescinded or annulled, then the Event of Default by reason thereof
shall be deemed not to have occurred; or
(5) the Company or any Significant Subsidiary pursuant to or under or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it in an
involuntary case or proceeding or the commencement of any case against
it;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its creditors;
(E) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or
(F) consents to the filing of such petition or the appointment of or
taking possession by a Custodian; or
(6) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company or any Significant Subsidiary in
an involuntary case or proceeding, or adjudicates the Company or any
Significant Subsidiary insolvent or bankrupt;
41
(B) appoints a Custodian of the Company or any Significant Subsidiary
or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 days.
"Bankruptcy Law" means Title 11, United States Code, or any similar Federal
or state law for the relief of debtors.
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (3) or clause (4) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate Principal Amount at Maturity 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 (3) or clause (4) above after actual receipt of such notice. Any such
notice must specify the Default, demand that it be remedied and state that such
notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after it becomes
aware of the occurrence thereof, written notice of any event which with the
giving of notice or the lapse of time, or both, would become an Event of Default
under clause (3) or clause (4) above, its status and what action the Company is
taking or proposes to take with respect thereto.
SECTION 6.02 Acceleration.
If an Event of Default (other than an Event of Default specified in Section
6.01(5) or (6) in respect of the Company) occurs and is continuing, the Trustee
by Notice to the Company, or the Holders of at least 25% in aggregate Principal
Amount at Maturity of the Securities at the time outstanding by notice to the
Company and the Trustee, may declare the Issue Price plus accrued Original Issue
Discount through the date of declaration, and any accrued and unpaid interest
(including semiannual and contingent interest) through the date of such
declaration, on all the Securities to be immediately due and payable. Upon such
a declaration, such Issue Price plus accrued Original Issue Discount, and such
accrued and unpaid interest (including semiannual and contingent interest), if
any, shall be due and payable immediately. If an Event of Default specified in
Section 6.01(5) or (6) in respect of the Company occurs and is continuing, the
Issue Price plus accrued Original Issue Discount plus accrued and unpaid
interest (including semiannual and contingent 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 Securityholders. The
Holders of a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding, by notice to the Trustee (and without notice
to any other Securityholder) 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 plus accrued Original Issue Discount plus accrued
42
and unpaid interest that have become due solely as a result of acceleration and
if all amounts due to the Trustee under Section 7.07 have been paid. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of the Issue Price plus accrued Original
Issue Discount plus any accrued and unpaid interest (including semiannual
interest and contingent interest), if any, on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not possess
any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.04 Waiver of Past Defaults.
Subject to Section 6.02, the Holders of a majority in aggregate Principal
Amount at Maturity of the Securities at the time outstanding, by notice to the
Trustee (and without notice to any other Securityholder), may waive an existing
Default and its consequences except (1) an Event of Default described in Section
6.01(1) or (2), (2) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Securityholder affected or (3) a
Default which constitutes a failure to convert any Security in accordance with
the terms of Article 11. When a Default is waived, it is deemed cured, but no
such waiver shall extend to any subsequent or other Default or impair any
consequent right. This Section 6.04 shall be in lieu of Section 316(a)1(B) of
the TIA and such Section 316(a)1(B) is hereby expressly excluded from this
Indenture, as permitted by the TIA.
SECTION 6.05 Control by Majority.
The Holders of a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or that
the Trustee determines in good faith is unduly prejudicial to the rights of
other Securityholders or would involve the Trustee in personal liability unless
the Trustee is offered indemnity satisfactory to it. This Section 6.05 shall be
in lieu of Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is hereby
expressly excluded from this Indenture, as permitted by the TIA.
SECTION 6.06 Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this Indenture
or the Securities unless:
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(1) the Holder gives to the Trustee written notice stating that an Event of
Default is continuing;
(2) the Holders of at least 25% in aggregate Principal Amount at Maturity
of the Securities at the time outstanding make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee security or indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of such notice, request and offer of security or indemnity; and
(5) the Holders of a majority in aggregate Principal Amount at Maturity of
the Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of any
other Securityholder or to obtain a preference or priority over any other
Securityholder.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of the Principal Amount at Maturity (or if the
Securities have been converted to semiannual coupon notes following a Tax Event
pursuant to Article 10, the Restated Principal Amount), Issue Price plus accrued
Original Issue Discount, Redemption Price, Purchase Price, Change in Control
Purchase Price as the case may be, and contingent interest or semiannual
interest, if any, in respect of the Securities held by such Holder, on or after
the respective due dates expressed in the Securities or any Redemption Date, and
to convert the Securities in accordance with Article 11, or to bring suit for
the enforcement of any such payment on or after such respective dates or the
right to convert, shall not be impaired or affected adversely without the
consent of such Holder.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default described in Section 6.01(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount owing with respect to
the Securities and the amounts provided for in Section 7.07.
SECTION 6.09 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the Principal Amount at
Maturity, Issue Price plus accrued Original Issue Discount, Redemption Price,
Purchase Price, Change in Control Purchase Price as the case may be, and
contingent interest or semiannual
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interest, if any, in respect of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of any such
amount) shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(a) to file and prove a claim for the whole amount of the Principal Amount
at Maturity, Issue Price plus accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price as the case may be,
and contingent interest or semiannual interest, if any, and to file such
other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel or any other amounts due the Trustee under Section 7.07)
and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the Securities for
the Principal Amount at Maturity, Issue Price plus accrued Original Issue
Discount, Redemption Price, Purchase Price, Change in Control Purchase Price, as
the case may be, and contingent interest or semiannual interest, if any,
ratably, without preference or priority of any kind, according to such amounts
due and payable on the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date,
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the Trustee shall mail to each Securityholder and the Company a notice that
states the record date, the payment date and the amount to be paid.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
(other than the Trustee) in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10%
in aggregate Principal Amount at Maturity of the Securities at the time
outstanding. This Section 6.11 shall be in lieu of Section 315(e) of the TIA and
such Section 315(e) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
SECTION 6.12 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, which would
prohibit or forgive the Company from paying all or any portion of the Principal
Amount at Maturity, Issue Price plus accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price, as the case may be, and
contingent interest or semiannual interest, if any, in respect of Securities, or
any interest on such amounts, as contemplated herein, or which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent person would exercise
or use under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others; and
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(2) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture, but in case of any
such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture, but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein.
This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) this paragraph (c) does not limit the effect of paragraph (b) of this
Section 7.01;
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05.
Subparagraphs (c)(1), (2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee (acting in
any capacity hereunder) shall be under no liability for interest on any money
received by it hereunder unless otherwise agreed in writing with the Company.
SECTION 7.02 Rights of Trustee.
Subject to its duties and responsibilities under the provisions of Section
7.01, and, except as expressly excluded from this Indenture pursuant to said
Section 7.01, under the TIA,
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(a) the Trustee may conclusively rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(c) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(d) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith which it believes to be authorized or
within its rights or powers conferred under this Indenture;
(e) the Trustee may consult with counsel selected by it and any advice or
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;
(f) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Holders, pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity satisfactory to
it against the costs, expenses and liabilities which may be incurred therein or
thereby;
(g) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a resolution of the
Board of Directors;
(h) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation;
(i) the Trustee shall not be deemed to have notice of any Default or Event
of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless
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written notice of any event which is in fact such a default is received by the
Trustee at the Corporate Trust Office of the Trustee, and such notice references
the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder; and
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee. Any Paying Agent,
Registrar, Conversion Agent or co-registrar may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities, it shall not be accountable for the Company's use
or application of the proceeds from the Securities, it shall not be responsible
for any statement in the registration statement for the Securities under the
Securities Act or in the Indenture or the Securities (other than its certificate
of authentication), or the determination as to which beneficial owners are
entitled to receive any notices hereunder.
SECTION 7.05 Notice of Defaults.
If a Default occurs and if it is known to the Trustee, the Trustee shall
give to each Securityholder notice of the Default within 90 days after it occurs
unless such Default shall have been cured or waived before the giving of such
notice. Except in the case of a Default described in Section 6.01(1) or (2), the
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Securityholders. The second sentence of this Section 7.05 shall be
in lieu of the proviso to Section 315(b) of the TIA and such proviso is hereby
expressly excluded from this Indenture, as permitted by the TIA.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to each Securityholder a brief
report dated as of such
49
May 15 that complies with TIA Section 313(a), if required by such Section
313(a). The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be filed with the SEC and each securities exchange, if any, on which the
Securities are listed. The Company agrees to promptly notify the Trustee
whenever the Securities become listed on any securities exchange and of any
delisting thereof.
SECTION 7.07 Compensation and Indemnity.
The Company agrees:
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited
(to the extent permitted by law) by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable compensation
and the expenses, advances and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(c) to indemnify the Trustee or any predecessor Trustee and their agents
for, and to hold them harmless against, any loss, damage, claim, liability,
cost or expense (including reasonable attorney's fees and taxes (other than
taxes based upon, measured by or determined by the income of the Trustee))
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this trust, including
the reasonable costs and expenses of defending itself against any claim
(whether asserted by the Company or any Holder or any other Person) or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
To secure the Company's payment obligations in this Section 7.07, Holders
shall have been deemed to have granted to the Trustee a lien prior to the
Securities on all money or property held or collected by the Trustee, except
that held in trust to pay the Principal Amount at Maturity, Issue Price plus
accrued Original Issue Discount, Redemption Price, Purchase Price, Change in
Control Purchase Price, contingent interest or interest, if any, as the case may
be, on particular Securities.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture and the resignation or removal of the
Trustee. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.01(5) or (6), the expenses including the reasonable
charges and expenses of its counsel, are intended to constitute expenses of
administration under any Bankruptcy Law.
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SECTION 7.08 Replacement of Trustee.
The Trustee may resign by so notifying the Company; provided, however, no
such resignation shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 7.08. The Holders of a majority in
aggregate Principal Amount at Maturity of the Securities at the time outstanding
may remove the Trustee by so notifying the Trustee and the Company. The Company
shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint, by resolution of
its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company satisfactory in form and substance to
the retiring Trustee and the Company. Thereupon the resignation or removal of
the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.07.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
SECTION 7.09 Successor Trustee by Merger.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
SECTION 7.10 Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA Sections
310(a)(1) and 310(b). The Trustee (or its parent holding company) shall have a
combined capital and
51
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. Nothing herein contained shall prevent the Trustee from
filing with the Commission the application referred to in the penultimate
paragraph of TIA Section 310(b).
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Liability on Securities.
When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancellation or
(ii) all outstanding Securities have become due and payable and the Company
deposits with the Trustee, the Paying Agent (if the Paying Agent is not the
Company or any Subsidiary or any Affiliate of either of them) or the Conversion
Agent cash or, if expressly permitted by the terms of the Securities or the
Indenture, Common Stock sufficient to pay all amounts due and owing on all
outstanding Securities (other than Securities replaced pursuant to Section
2.07), and if in either case the Company pays all other sums payable hereunder
by the Company, then this Indenture shall, subject to Section 7.07, cease to be
of further effect. The Trustee shall join in the execution of a document
prepared by the Company acknowledging satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
Opinion of Counsel and at the cost and expense of the Company.
SECTION 8.02 Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, subject to
applicable unclaimed property law. After return to the Company, Holders entitled
to the money or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another person
and the Trustee and the Paying Agent shall have no further liability to the
Securityholders with respect to such money or securities for that period
commencing after the return thereof.
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ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders.
The Company and the Trustee may amend this Indenture or the Securities
without the consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5 or Section 11.14;
(3) to secure the Company's obligations under the Securities and this
Indenture;
(4) to add to the Company's covenants for the benefit of the
Securityholders or to surrender any right or power conferred upon the
Company;
(5) to make any change to comply with the TIA, or any amendment thereto, or
to comply with any requirement of the SEC in connection with the
qualification of the Indenture under the TIA, or as necessary in connection
with the registration of the Securities under the Securities Act; or
(6) to make any change that does not adversely affect the rights of any
Holders.
Notwithstanding the foregoing, no amendment contemplated pursuant to clause
(1), (3), (4) or (5) of the preceding paragraph may be made without the written
consent of the Holders of at least a majority in aggregate Principal Amount at
Maturity of Securities at the time outstanding if such amendment may materially
and adversely affect the interests of the Holders.
SECTION 9.02 With Consent of Holders.
With the written consent of the Holders of at least a majority in aggregate
Principal Amount at Maturity of the Securities at the time outstanding, the
Company and the Trustee may amend this Indenture or the Securities. However,
without the consent of each Securityholder affected, an amendment to this
Indenture or the Securities may not:
(1) change the provisions of this Indenture that relate to modifying or
amending this Indenture;
(2) make any change in the manner or rate of accrual in connection with
Original Issue Discount, make any change in the manner of calculation of,
or that adversely affects the right to receive, semiannual or contingent
interest, reduce the rate of interest referred to in section 1 of the
Securities, reduce the rate of interest referred to in Section 10.01 upon
the occurrence of a Tax Event, or extend the
53
time for payment of Original Issue Discount, semiannual or contingent
interest or interest, if any, on any Security;
(3) reduce the Principal Amount at Maturity, Restated Principal
Amount or the Issue Price of or extend the Stated Maturity of any Security;
(4) reduce the Redemption Price, Purchase Price or Change in Control
Purchase Price of any Security;
(5) make any Security payable in money or securities other than that stated
in the Security;
(6) make any change in Section 6.04, Section 6.07 or this Section 9.02,
except to increase any percentage set forth therein;
(7) make any change that adversely affects the right to convert any
Security;
(8) make any change that adversely affects the right to require the Company
to purchase the Securities in accordance with the terms thereof and this
Indenture; or
(9) impair the right to convert, or receive payment with respect to, a
Security, or right to institute suit for the enforcement of any payment
with respect to, or conversion of, the Securities.
It shall not be necessary for the consent of the Holders under this Section
9.02 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 9.02 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.
SECTION 9.03 Compliance with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall comply
with the TIA.
SECTION 9.04 Revocation and Effect of Consents, Waivers and Actions.
Until an amendment, waiver or other action by Holders becomes effective, a
consent thereto by a Holder of a Security hereunder is a continuing consent by
the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same obligation as the consenting Holder's Security,
even if notation of the consent, waiver or action is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent, waiver or
action as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment, waiver or
action becomes effective. After an amendment, waiver or action becomes
effective, it shall bind every Securityholder.
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SECTION 9.05 Notation on or Exchange of Securities.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.
SECTION 9.06 Trustee to Sign Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized pursuant to
this Article 9 if the amendment contained therein does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign such supplemental indenture. In signing such
supplemental indenture the Trustee shall receive, and (subject to the provisions
of Section 7.01) shall be fully protected in relying upon, in addition to the
documents required by Section 13.04, an Officers' Certificate and an Opinion of
Counsel stating that such amendment is authorized or permitted by this
Indenture.
SECTION 9.07 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
ARTICLE 10
SPECIAL TAX EVENT CONVERSION; PAYMENT OF INTEREST ON FAILURE TO OBTAIN RATING
SECTION 10.01 Optional Conversion to Semiannual Coupon Note Upon Tax Event.
From and after (i) the date (the "Tax Event Date") of the occurrence of a
Tax Event and (ii) the date the Company exercises the option provided for in
this Section 10.01, whichever is later (the later of such dates, the "Option
Exercise Date"), at the option of the Company, interest in lieu of future
Original Issue Discount shall accrue at the rate per annum specified in section
11(a) of the Securities on a restated principal amount per $1,000 original
Principal Amount at Maturity (the "Restated Principal Amount") equal to the
Issue Price plus Original Issue Discount accrued through the Option Exercise
Date and shall be payable semiannually each Interest Payment Date to holders of
record at the close of business on the related "Regular Record 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 on which interest has been paid
or, if no interest has been paid, from the Option Exercise Date. Within 15 days
of the occurrence of a Tax Event, the Company shall mail a written notice of
such Tax Event by facsimile and first-class mail to the Trustee and within 15
days of its exercise of such option the
55
Company shall mail a written notice of the Option Exercise Date by facsimile and
first-class mail to the Trustee and by first class mail to 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 Principal Amount at Maturity
of a Security, the Restated Principal Amount thereof plus accrued and unpaid
interest with respect to any Security, (ii) "Issue Price and accrued Original
Issue Discount," "Issue Price plus Original Issue Discount" or similar words, as
used herein, shall mean Restated Principal Amount plus accrued and unpaid
interest with respect to any Security and (iii) contingent interest shall cease
to accrue on the Securities. 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 notes. No other changes to the Indenture shall result as a
result of the events described in Section 10.01.
SECTION 10.02 Payment of Interest on Failure to Obtain Rating.
If by the close of business on the 150/th/ day following the issuance of
the Securities (or if such 150/th/ day is not a Business Day, the next
succeeding Business Day) the Company has not obtained at least one of the
Required Ratings and furnished to the Trustee written evidence of such rating
from the applicable credit rating agency, then from and after such 150/th/ day,
semiannual interest shall accrue at a rate of 0.50% per annum on the Issue Price
of the Securities and shall be payable in cash on each Interest Payment Date to
holders of record at the close of business on the related Regular Record Date.
Such 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 on which interest
has been paid or, if no interest has been paid, from the 150/th/ day following
the issuance of the Securities. Interest payable pursuant to this Section 10.02
shall be in addition to any accrued Original Issue Discount, contingent interest
payable pursuant to section 5 of the Securities or semiannual interest payable
pursuant to Section 10.01, and shall continue to accrue and be payable on each
Security for so long as it remains outstanding, whether or not the Company
subsequently obtains any Required Rating on the Securities.
ARTICLE 11
CONVERSION
SECTION 11.01 Conversion Privilege.
A Holder of a Security may convert such Security into Common Stock at any
time during the period stated in section 9 of the Securities. Upon determination
that Holders are or will be entitled to convert their Securities into Common
Stock in accordance with section 9 of the Securities, the Company will issue a
press release and publish such determination on the Company's web site. The
number of shares of Common Stock issuable upon conversion of a Security per
$1,000 of Principal Amount at Maturity thereof (the "Conversion Rate") shall be
that set forth in section 9 in the Securities, subject to adjustment as herein
set forth.
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A Holder may convert a portion of the Principal Amount at Maturity 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.
"Average Sale Price" means the average of the Sale Prices of the Common
Stock for the shorter of
(i) 30 consecutive trading days ending on the last full trading day prior
to the Time of Determination with respect to the rights, warrants or
options or distribution in respect of which the Average Sale Price is being
calculated, or
(ii) the period (x) commencing on the date next succeeding the first public
announcement of (a) the issuance of rights, warrants or options or (b) the
distribution, in each case, in respect of which the Average Sale Price is
being calculated and (y) proceeding through the last full trading day prior
to the Time of Determination with respect to the rights, warrants or
options or distribution in respect of which the Average Sale Price is being
calculated (excluding days within such period, if any, which are not
trading days), or
(iii) the period, if any, (x) commencing on the date next succeeding the
Ex-Dividend Time with respect to the next preceding (a) issuance of rights,
warrants or options or (b) distribution, in each case, for which an
adjustment is required by the provisions of Section 11.06(4), 11.07 or
11.08 and (y) proceeding through the last full trading day prior to the
Time of Determination with respect to the rights, warrants or options or
distribution in respect of which the Average Sale Price is being calculated
(excluding days within such period, if any, which are not trading days).
In the event that the Ex-Dividend Time (or in the case of a subdivision,
combination or reclassification, the effective date with respect thereto) with
respect to a dividend, subdivision, combination or reclassification to which
Section 11.06(1), (2), (3) or (5) applies occurs during the period applicable
for calculating "Average Sale Price" pursuant to the definition in the preceding
sentence, "Average Sale Price" shall be calculated for such period in a manner
determined by the Board of Directors to reflect the impact of such dividend,
subdivision, combination or reclassification on the Sale Price of the Common
Stock during such period.
"Time of Determination" means the time and date of the earlier of (i) the
determination of stockholders entitled to receive rights, warrants or options or
a distribution, in each case, to which Section 11.07 or 11.08 applies and (ii)
the time ("Ex-Dividend Time") immediately prior to the commencement of
"ex-dividend" trading for such rights, warrants or options or distribution on
the New York Stock Exchange or such other national or regional exchange or
market on which the Common Stock is then listed or quoted.
SECTION 11.02 Conversion Procedure.
To convert a Security a Holder must satisfy the requirements in section 9
of the Securities. The date on which the Holder satisfies all those requirements
is the conversion date
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(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 11.03. The
person in whose name the certificate is registered shall be treated as a
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 or adjustment 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 (or interest, if the Company has exercised its option provided for in
Section 10.01) attributable to the period from the Issue Date (or, if the
Company has exercised the option provided for in Section 10.01, the later of (x)
the date of such exercise and (y) the date on which interest was last paid) of
the Security through but not including the Conversion Date and accrued
semiannual and contingent interest with respect to the converted Security shall
not be cancelled, 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
(except to the extent that interest in lieu of Original Issue Discount and
semiannual and contingent interest are paid in cash as provided in section 9 of
the Securities); and the fair market value of such shares of Common Stock
(together with any such cash payment in lieu of fractional shares) shall be
treated as issued, to the extent thereof, first in exchange for Original Issue
Discount (or interest, if the Company has exercised its option provided for in
Section 10.01) accrued through the Conversion Date and accrued semiannual and
contingent interest, and the balance, if any, of such fair market value of such
Common Stock (and any such cash payment) shall be treated as issued in exchange
for the Issue Price of the Security being converted pursuant to the provisions
hereof.
If the 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 Amount at Maturity of the Securities converted.
If the last day on which a Security may be converted is a Legal Holiday,
the Security may be surrendered on the next succeeding day that is not a Legal
Holiday.
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 Amount at Maturity to
the unconverted portion of the Security surrendered.
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SECTION 11.03 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 1/1,000th of a share, by multiplying
the Sale Price of the Common Stock, 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 11.04 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 11.05 Company to Provide Stock.
The Company shall, prior to issuance of any Securities under this Article
11, 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 will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or in the
over-the-counter market or such other market on which the Common Stock is then
principally listed or quoted.
SECTION 11.06 Adjustment for Change In Capital Stock.
If, after the Issue Date of the Securities, the Company:
(1) pays a dividend or makes a distribution on its Common Stock in shares
of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a greater number
of shares;
(3) combines its outstanding shares of Common Stock into a smaller number
of shares;
59
(4) pays a dividend or makes a distribution on its Common Stock in shares
of its Capital Stock (other than Common Stock or rights, warrants or
options for its Capital Stock); or
(5) issues by reclassification of its Common Stock any shares of its
Capital Stock (other than rights, warrants or options for its Capital
Stock), then the conversion privilege and the Conversion Rate in effect
immediately prior to such action shall be adjusted so that the Holder of a
Security thereafter converted may receive the number of shares of Capital
Stock of the Company which such Holder would have owned immediately
following such action if such Holder had converted the Security immediately
prior to such action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security upon conversion of such
Security may receive shares of two or more classes of Capital Stock of the
Company, the Conversion Rate shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated by this Article 11 with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article 11.
SECTION 11.07 Adjustment for Rights Issue.
If after the Issue Date of the Securities, the Company distributes any
rights, warrants or options to all holders of its Common Stock entitling them,
for a period expiring within 60 days after the record date for such
distribution, to purchase shares of Common Stock at a price per share less than
the Sale Price of the Common Stock as of the Time of Determination, the
Conversion Rate shall be adjusted in accordance with the formula:
R' = R x (O + N)
-------
(O + (N x P)/M)
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
O = the number of shares of Common Stock outstanding on the record date
for the distribution to which this Section 11.07 is being applied.
N = the number of additional shares of Common Stock offered pursuant to
the distribution.
P = the offering price per share of the additional shares.
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M = the Average Sale Price, minus, in the case of (i) a distribution to
which Section 11.06(4) applies or (ii) a distribution to which Section 11.08
applies, for which, in each case, (x) the record date shall occur on or before
the record date for the distribution to which this Section 11.07 applies and (y)
the Ex-Dividend Time shall occur on or after the date of the Time of
Determination for the distribution to which this Section 11.07 applies, the fair
market value (on the record date for the distribution to which this Section
11.07 applies) of the
(1) Capital Stock of the Company distributed in respect of each share of
Common Stock in such Section 11.06(4) distribution and
(2) assets of the Company or debt securities or any rights, warrants or
options to purchase securities of the Company distributed in respect of
each share of Common Stock in such Section 11.08 distribution.
The Board of Directors shall determine fair market values for the purposes
of this Section 11.07.
The adjustment shall become effective immediately after the record date for
the determination of shareholders entitled to receive the rights, warrants or
options to which this Section 11.07 applies. If all of the shares of Common
Stock subject to such rights, warrants or options have not been issued when such
rights, warrants or options expire, then the Conversion Rate shall promptly be
readjusted to the Conversion Rate which would then be in effect had the
adjustment upon the issuance of such rights, warrants or options been made on
the basis of the actual number of shares of Common Stock issued upon the
exercise of such rights, warrants or options.
No adjustment shall be made under this Section 11.07 if the application of
the formula stated above in this Section 11.07 would result in a value of R'
that is equal to or less than the value of R.
SECTION 11.08 Adjustment for Other Distributions.
(a) If, after the Issue Date of the Securities, the Company distributes to
all holders of its Common Stock any of its assets excluding distributions of
Capital Stock or equity interests referred to in Section 11.08(b), or debt
securities or any rights, warrants or options to purchase securities of the
Company (including securities or cash, but excluding (x) distributions of
Capital Stock referred to in Section 11.06 and distributions of rights, warrants
or options referred to in Section 11.07 and (y) cash dividends or other cash
distributions that are paid out of consolidated current net earnings or earnings
retained in the business as shown on the books of the Company unless such cash
dividends or other cash distributions are Extraordinary Cash Dividends), the
Conversion Rate shall be adjusted, subject to the provisions of Section
11.08(c), in accordance with the formula:
61
R' = R x M
----------
M-F
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, minus, in the case of a distribution to
which Section 11.06(4) applies, for which (i) the record date shall occur on or
before the record date for the distribution to which this Section 11.08(a)
applies and (ii) the Ex-Dividend Time shall occur on or after the date of the
Time of Determination for the distribution to which this Section 11.08(a)
applies, the fair market value (on the record date for the distribution to which
this Section 11.08(a) applies) of any Capital Stock of the Company distributed
in respect of each share of Common Stock in such Section 11.06(4) distribution.
F = the fair market value (on the record date for the distribution to
which this Section 11.08(a) applies) of the assets, securities, rights, warrants
or options to be distributed in respect of each share of Common Stock in the
distribution to which this Section 11.08(a) is being applied (including, in the
case of cash dividends or other cash distributions giving rise to an adjustment,
all such cash distributed concurrently).
The Board of Directors shall determine fair market values for the purposes
of this Section 11.08(a).
The adjustment shall become effective immediately after the record date for
the determination of shareholders entitled to receive the distribution to which
this Section 11.08(a) applies.
For purposes of this Section 11.08(a), the term "Extraordinary Cash
Dividend" shall mean any cash dividend with respect to the Common Stock the
amount of which, together with the aggregate amount of cash dividends on the
Common Stock to be aggregated with such cash dividend in accordance with the
provisions of this paragraph, equals or exceeds the threshold percentage set
forth in item (i) below. For purposes of item (i) below, the "Measurement
Period" with respect to a cash dividend on the Common Stock shall mean the 365
consecutive day period ending on the date prior to the Ex-Dividend Time with
respect to such cash dividend, and the "Relevant Cash Dividends" with respect to
a cash dividend on the Common Stock shall mean the cash dividends on the Common
Stock with Ex-Dividend Times occurring in the Measurement Period.
(i) If, upon the date prior to the Ex-Dividend Time with respect to a cash
dividend on the Common Stock, the aggregate amount of such cash dividend
together with the amounts of all Relevant Cash Dividends equals or exceeds
on a per share basis 5% of the Sale Price of the Common Stock on the last
trading day preceding the date of declaration by the Board of Directors of
the cash dividend with respect to which this provision is being applied,
then such cash dividend
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together with all Relevant Cash Dividends, shall be deemed to be an
Extraordinary Cash Dividend and for purposes of applying the formula set
forth above in this Section 11.08(a), the value of "F" shall be equal to
(y) the aggregate amount of such cash dividend together with the amount of
all Relevant Cash Dividends, minus (z) the aggregate amount of all Relevant
Cash Dividends for which a prior adjustment in the Conversion Rate was
previously made under this Section 11.08(a).
In making the determinations required by item (i) above, the amount of cash
dividends paid on a per share basis and the amount of any Relevant Cash
Dividends specified in item (i) above, shall be appropriately adjusted to
reflect the occurrence during such period of any event described in Section
11.06.
(b) If, after the Issue Date of the Securities, the Company pays a dividend
or makes a distribution to all holders of its Common Stock consisting of Capital
Stock of any class or series, or similar equity interests, of or relating to a
Subsidiary or other business unit of the Company, the Conversion Rate shall be
adjusted in accordance with the formula:
R' = R x (1 + F/M)
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the average of the Post-Distribution Prices of the Common Stock for
the 10 trading days commencing on and including the fifth trading day after the
date on which "ex-dividend trading" commences for such dividend or distribution
on the principal United States exchange or market which such securities are then
listed or quoted (the "Ex-Dividend Date").
F = the fair market value of the securities distributed in respect of each
share of Common Stock for which this Section 11.08(b) shall mean the number of
securities distributed in respect of each share of Common Stock multiplied by
the average of the Post-Distribution Prices of those securities distributed for
the 10 trading days commencing on and including the fifth trading day after the
Ex-Dividend Date.
"Post-Distribution Price" of Capital Stock or any similar equity interest
on any date means the closing per unit 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 the average ask prices) on such
date for trading of such units on a "when issued" basis without due bills (or
similar concept) as reported in the composite transactions for the principal
United States securities exchange on which such Capital Stock or equity interest
is traded or, if the Capital Stock or equity interest, as the case may be, is
not listed on a United States national or regional securities exchange, as
reported by the National Association of Securities Dealers Automated Quotation
System or by the National Quotation Bureau Incorporated; provided that if on any
date such units have not traded on a "when issued" basis, the Post-Distribution
Price shall be the
63
closing per unit 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 the average ask prices) on such date for trading
of such units on a "regular way" basis without due bills (or similar concept) as
reported in the composite transactions for the principal United States
securities exchange on which such Capital Stock or equity interest is traded or,
if the Capital Stock or equity interest, as the case may be, is not listed on a
United States national or regional securities exchange, as reported by the
National Association of Securities Dealers Automated Quotation System or by the
National Quotation Bureau Incorporated. In the absence of such quotation, the
Company shall be entitled to determine the Post-Distribution Price on the basis
of such quotations which reflect the post-distribution value of the Capital
Stock or equity interests as it considers appropriate.
(c) In the event that, with respect to any distribution to which Section
11.08(a) would otherwise apply, the difference "M-F" as defined in the formula
set forth in Section 11.08(a) is less than $1.00 or "F" is equal to or greater
than "M", then the adjustment provided by Section 11.08(a) shall not be made and
in lieu thereof the provisions of Section 11.14 shall apply to such
distribution.
SECTION 11.09 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 not made shall be carried forward and taken into account in
any subsequent adjustment.
All calculations under this Article 11 shall be made to the nearest cent or
to the nearest 1/1,000th of a share, as the case may be.
SECTION 11.10 When No Adjustment Required.
No adjustment need be made for a transaction referred to in Section 11.06,
11.07, 11.08 or 11.14 if Securityholders are to participate in the transaction
on a basis and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common Stock
participate in the transaction. Such participation by Securityholders may
include participation upon conversion provided that an adjustment shall be made
at such time as the Securityholders are no longer entitled to participate.
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 or no par value of
the Common Stock.
To the extent the Securities become convertible pursuant to this Article 11
into cash, no adjustment need be made thereafter as to the cash. Interest will
not accrue on the cash.
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SECTION 11.11 Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company shall promptly mail
to Securityholders a notice of the adjustment. The Company shall file with the
Trustee and the Conversion Agent such notice and a certificate from the
Company's independent public accountants briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall 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 11.12 Voluntary Increase.
The Company from time to time may increase the Conversion Rate by any
amount for any period of time. Whenever the Conversion Rate is increased, the
Company shall mail to Securityholders and file with the Trustee and the
Conversion Agent a notice of the increase. The Company shall mail the notice at
least 15 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.
A voluntary increase of the Conversion Rate does not change or adjust the
Conversion Rate otherwise in effect for purposes of Section 11.06, 11.07 or
11.08.
SECTION 11.13 Notice of Certain Transactions.
If:
(1) the Company takes any action that would require an adjustment in the
Conversion Rate pursuant to Section 11.06, 11.07 or 11.08 (unless no
adjustment is to occur pursuant to Section 11.10); or
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 11.14; or
(3) there is a liquidation or dissolution of the Company;
then the Company shall mail to Securityholders 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, binding share exchange,
transfer, liquidation or dissolution. The Company shall file and 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 11.14 Reorganization of Company; Special Distributions.
If the Company is a party to a transaction subject to Section 5.01 (other
than a sale of all or substantially all of the assets of the Company in a
transaction in which the holders of Common Stock immediately prior to such
transaction do not receive securities, cash or other assets of the Company or
any other person) or a merger or binding share exchange which
65
reclassifies or changes the outstanding Common Stock of the Company, the person
obligated to deliver securities, cash or other assets upon conversion of
Securities shall enter into a supplemental indenture. If the issuer of
securities deliverable upon conversion of Securities is an Affiliate of the
successor Company, that issuer shall join in the supplemental indenture.
The supplemental indenture shall provide that the Holder of a Security may
convert it into the kind and amount of securities, cash or other assets which
such Holder would have received immediately after the consolidation, merger,
binding share exchange or transfer if such Holder had converted the Security
immediately before the effective date of the transaction, assuming (to the
extent applicable) that such Holder (i) was not a constituent person or an
Affiliate of a constituent person to such transaction; (ii) made no election
with respect thereto; and (iii) was treated alike with the plurality of non-
electing Holders. The supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practical to the adjustments provided
for in this Article 11. The successor Company shall mail to Securityholders a
notice briefly describing the supplemental indenture.
If this Section applies, neither Section 11.06 nor 11.07 applies.
If the Company makes a distribution to all holders of its Common Stock of
any of its assets, or debt securities or any rights, warrants or options to
purchase securities of the Company that, but for the provisions of Section
11.08(c), would otherwise result in an adjustment in the Conversion Rate
pursuant to the provisions of Section 11.08, then, from and after the record
date for determining the holders of Common Stock entitled to receive the
distribution, a Holder of a Security that converts such Security in accordance
with the provisions of this Indenture shall upon such conversion be entitled to
receive, in addition to the shares of Common Stock into which the Security is
convertible, the kind and amount of securities, cash or other assets comprising
the distribution that such Holder would have received if such Holder had
converted the Security immediately prior to the record date for determining the
holders of Common Stock entitled to receive the distribution.
SECTION 11.15 Company Determination Final.
Any determination that the Company or the Board of Directors must make
pursuant to Section 11.03, 11.06, 11.07, 11.08, 11.09, 11.10, 11.14 or 11.17 is
conclusive.
SECTION 11.16 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 11.14 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 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. Each Conversion Agent shall have the same
protection under this Section 11.16 as the Trustee.
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SECTION 11.17 Simultaneous Adjustments.
In the event that this Article 11 requires adjustments to the Conversion
Rate under more than one of Sections 11.06(4), 11.07 or 11.08, 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 11.06, second, the provisions of Section 11.08 and, third,
the provisions of Section 11.07.
SECTION 11.18 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 11.19 Rights Issued in Respect of Common Stock Issued Upon
Conversion.
Each share of Common Stock issued upon conversion of Securities pursuant to
this Article 11 shall be entitled to receive the appropriate number of common
stock or preferred stock purchase rights, as the case may be (the "Rights"), if
any, that all shares of Common Stock are entitled to receive, and the
certificates representing the Common Stock issued upon such conversion shall
bear such legends, if any, in each case as may be provided by the terms of any
shareholder rights agreement adopted by the Company, as the same may be amended
from time to time (in each case, a "Rights Agreement"). Provided that such
Rights Agreement requires that each share of Common Stock issued upon conversion
of Securities at any time prior to the distribution of separate certificates
representing the Rights be entitled to receive such Rights, then,
notwithstanding anything else to the contrary in this Article 11, there shall
not be any adjustment to the conversion privilege or Conversion Rate as a result
of the issuance of Rights, the distribution of separate certificates
representing the Rights, the exercise or redemption of such Rights in accordance
with any such Rights Agreement, or the termination or invalidation of such
Rights.
ARTICLE 12
PAYMENT OF INTEREST
SECTION 12.01 Interest Payments.
Semiannual or contingent interest on any Security that is payable in cash,
and is punctually paid or duly provided for, on any applicable 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 or accrual date, as the case may
be, for such interest at the office or agency of the Company maintained for such
purpose. Each installment of semiannual or contingent 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, if the Trustee shall have received
proper wire transfer instructions from such payee not later than the related
Regular Record Date or accrual date, as the case may be, or, if no such
instructions have been received by check drawn on a bank in The
67
City of New York mailed to the payee at its address set forth on the Registrar's
books. In the case of a permanent Global Security, semiannual or contingent
interest payable on any applicable payment date will be paid to the Depositary,
with respect to that portion of such permanent Global Security held for its
account by Cede & Co. for the purpose of permitting such party to credit the
interest received by it in respect of such permanent Global Security to the
accounts of the beneficial owners thereof.
SECTION 12.02 Defaulted Interest.
Except as otherwise specified with respect to the Securities, any
semiannual or contingent interest on any Security that is payable, but is not
punctually paid or duly provided for, within 30 days following any applicable
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 section 1 of the Securities), shall forthwith cease to be
payable to the registered Holder thereof on the relevant Regular Record Date or
accrual date, as the case may be, 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 "Special Record Date"). 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 2.05 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
68
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.
SECTION 12.03 Interest Rights Preserved.
Subject to the foregoing provisions of this Article 12 and Section 2.06,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
semiannual and contingent interest accrued and unpaid, and to accrue, which were
carried by such other Security.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
SECTION 13.02 Notices; Address of Agency in Manhattan.
Any request, demand, authorization, notice, waiver, consent or
communication shall be in writing and delivered in person or mailed by first-
class mail, postage prepaid, addressed as follows or transmitted by facsimile
transmission (confirmed by guaranteed overnight courier) to the following
facsimile numbers:
if to the Company:
Stilwell Financial Inc.
920 Main Street, 21/st/ flr.
Kansas City, MO 64105-2008
Telephone No.
Facsimile No.
Attention: Chief Financial Officer
if to the Trustee:
The Chase Manhattan Bank
450 West 33/rd/ Street
New York, NY 10001
Telephone No.: (212) 946-7550
Facsimile No.: (212) 946-8162
Attention: Institutional Trust Services
69
The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Securityholder shall be mailed to
the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.
If the Company mails a notice or communication to the Securityholders, it
shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
SECTION 13.03 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.
SECTION 13.05 Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a covenant or condition provided for in this Indenture shall include:
(1) a statement that each person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
70
(3) a statement that, in the opinion of each such person, he has made such
examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement that, in the opinion of such person, such covenant or
condition has been complied with.
SECTION 13.06 Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 13.07 Rules by Trustee, Paying Agent, Conversion Agent and
Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, Conversion Agent and the Paying Agent may make
reasonable rules for their functions.
SECTION 13.08 Calculations.
The calculation of the Purchase Price, Change in Control Purchase Price,
Conversion Rate, Market Price, Sale Price of the Common Stock and each other
calculation to be made hereunder (other than the LYON Market Price) shall be the
obligation of the Company. All calculations made by the Company as contemplated
pursuant to this Section 13.08 shall be final and binding on the Company and the
Holders absent manifest error. The Trustee, Paying Agent, Conversion Agent and
Bid Solicitation Agent shall not be obligated to recalculate, recompute or
confirm any such calculations.
SECTION 13.09 Legal Holidays.
A "Legal Holiday" is any day other than a Business Day. If any specified
date (including a date for giving notice) is a Legal Holiday, the action shall
be taken on the next succeeding day that is not a Legal Holiday, and, if the
action to be taken on such date is a payment in respect of the Securities, no
Original Issue Discount or interest, if any, shall accrue for the intervening
period.
SECTION 13.10 GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THIS INDENTURE AND THE SECURITIES.
SECTION 13.11 No Recourse Against Others.
A director, officer, employee, agent, representative, or stockholder or
equity holder, as such, of the Company shall not have any liability for any
obligations of the Company
71
under the Securities or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 13.12 Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 13.13 Multiple Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
72
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
above written.
STILWELL FINANCIAL INC.
By:
---------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Trustee
By:
---------------------------
Name:
Title:
73
EXHIBIT A-1
[FORM OF FACE OF GLOBAL SECURITY]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THIS
SECURITY IS ISSUED WITH AN INDETERMINATE AMOUNT OF ORIGINAL ISSUE DISCOUNT FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE DATE IS APRIL 30, 2001, AND
THE YIELD TO MATURITY FOR PURPOSES OF ACCRUING ORIGINAL ISSUE DISCOUNT IS 7.51%
PER ANNUM.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH STILWELL FINANCIAL INC.
(THE "COMPANY" OR THE "ISSUER") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR
ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
1
RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2),(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH
OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF
THE CONDITIONS SPECIFIED IN THE INDENTURE.
2
STILWELL FINANCIAL INC.
Liquid Yield Option(TM) Note due 2031
(Zero Coupon-Senior)
No. R-
CUSIP: 860831 AA4
Issue Date: April 30, 2001 Original Issue Discount: $258.63
Issue Price: $741.37 (for each $1,000 Principal
(for each $1,000 Principal Amount at Maturity)
Amount at Maturity)
STILWELL FINANCIAL INC., a Delaware corporation, promises to pay to Cede &
Co. or registered assigns, the Principal Amount at Maturity of DOLLARS
($--------) on April 30, 2031.
This Security shall not bear interest except as specified on the other side
of this Security. Original Issue Discount will accrue as specified on the other
side of this Security. This Security is convertible as specified on the other
side of this Security.
Additional provisions of this Security are set forth on the other side of
this Security.
Dated: April 30, 2001 STILWELL FINANCIAL INC.
By
-------------------------
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Chase Manhattan Bank
as Trustee, certifies that this
is one of the
Securities referred
to in the within-mentioned Indenture.
By --------------------------
Authorized Officer
3
[FORM OF REVERSE SIDE OF LYON]
Liquid Yield Option(TM) Note due 2031
(Zero Coupon-Senior)
1. Interest.
This Security shall not bear interest, except as specified in this section
or in sections 5 and 11 hereof. If the Principal Amount at Maturity hereof or
any portion of such Principal Amount at Maturity is not paid when due (whether
upon acceleration pursuant to Section 6.02 of the Indenture, upon the date set
for payment of the Redemption Price pursuant to section 6 hereof, upon the date
set for payment of the Purchase Price or Change in Control Purchase Price
pursuant to section 7 hereof or upon the Stated Maturity of this Security) or if
interest (including semiannual or contingent interest, if any) due hereon or any
portion of such interest is not paid when due in accordance with section 5 or 11
hereof, then in each such case the overdue amount shall, to the extent permitted
by law, bear interest at the rate of 1.00% per annum, compounded semiannually,
which interest shall accrue from the date such overdue amount was originally due
to the date payment of such amount, including interest thereon, has been made or
duly provided for. All such interest shall be payable on demand.
Original Issue Discount (the difference between the Issue Price and the
Principal Amount at Maturity of the Security), in the period during which a
Security remains outstanding, shall accrue at 1.00% per annum, on a semiannual
bond equivalent basis using a 360-day year composed of twelve 30-day months,
from the Issue Date of this Security.
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of Redemption Prices, Purchase Prices, Change in Control
Purchase Prices and at Stated Maturity to Holders who surrender Securities to a
Paying Agent to collect such payments in respect of the Securities. The Company
will pay any cash amounts in money of the United States that at the time of
payment is legal tender for payment of public and private debts. However, the
Company may make such cash payments by check payable in such money.
3. Paying Agent, Conversion Agent, Registrar and Bid Solicitation Agent.
Initially, The Chase Manhattan Bank, a New York banking corporation (the
"Trustee"), will act as Paying Agent, Conversion Agent, Registrar and Bid
Solicitation Agent. The Company may appoint and change any Paying Agent,
Conversion Agent, Registrar or co-registrar or Bid Solicitation Agent without
notice, other than notice to the Trustee except that the Company will maintain
at least one Paying Agent in the State of New York, The City of New York,
Borough of Manhattan, which shall initially be an office or agency of the
Trustee. The Company or any of its Subsidiaries or any of their Affiliates may
act as Paying Agent, Conversion Agent, Registrar or co-registrar. None of the
Company, any of its Subsidiaries or any of their Affiliates shall act as Bid
Solicitation Agent.
4
4. Indenture.
The Company issued the Securities under an Indenture dated as of April 30,
2001 (the "Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as in effect from
time to time (the "TIA"). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the TIA
for a statement of those terms.
The Securities are general unsecured and unsubordinated obligations of the
Company limited to $930,709,000 aggregate Principal Amount at Maturity (subject
to Section 2.07 of the Indenture). The Indenture does not limit other
indebtedness of the Company, secured or unsecured.
5. Contingent Interest.
Subject to the accrual and record date provisions specified in this section
5, the Company shall pay contingent interest to the Holders during any six-month
period (a "Contingent Interest Period") from May 1 to October 30 and from
October 31 to April 30, commencing May 1, 2006, if the average LYON Market Price
for the Five-Day Period with respect to such Contingent Interest Period equals
120% or more of the sum of the Issue Price of a Security and Original Issue
Discount accrued thereon to the day immediately preceding the first day of the
relevant Contingent Interest Period.
The amount of contingent interest payable per $1,000 Principal Amount at
Maturity hereof in respect of any Quarterly Period within a Contingent Interest
Period shall equal the greater of (x) Regular Cash Dividends paid by the Company
per share of Common Stock during that Quarterly Period multiplied by the number
of shares of Common Stock into which $1,000 Principal Amount at Maturity hereof
is convertible pursuant to section 9 hereof as of the accrual date for such
contingent interest and (y) 0.0625% of the average LYON Market Price for the
Five-Day Period with respect to such Contingent Interest Period.
Contingent interest, if any, will accrue and be payable to Holders as of
the record date for the related Regular Cash Dividend or, if no Regular Cash
Dividend is paid by the Company during a Quarterly Period, to Holders as of the
15th day preceding the last day of the relevant Contingent Interest Period. Such
payments shall be paid on the payment date of the related Regular Cash Dividend
or, if no Regular Cash Dividend is paid by the Company during any Quarterly
Period, on the last day of the relevant Contingent Interest Period. Original
Issue Discount will continue to accrue at 1.00 % per annum whether or not
contingent interest is paid.
"Five-Day Period" means, with respect to any Contingent Interest Period,
the five trading days ending on the second trading day immediately preceding the
first day of such Contingent Interest Period; provided, however, if the Company
shall have declared a Regular Cash Dividend on its Common Stock that is payable
during such Contingent Interest Period but for which the record date for
determining stockholders entitled thereto precedes the first day of such
Contingent Interest Period, then "Five-Day Period" shall mean, with respect to
such Contingent
5
Interest Period, the five trading days ending on the second trading day
immediately preceding such record date.
"Regular Cash Dividends" means quarterly or other periodic cash dividends
on the Company's Common Stock as declared by the Company's Board of Directors as
part of its cash dividend payment practices and that are not designated by them
as extraordinary or special or other nonrecurring dividends.
"LYON Market Price" means, as of any date of determination, the average of
the secondary market bid quotations per $1,000 Principal Amount at Maturity
obtained by the Bid Solicitation Agent for $10 million Principal Amount at
Maturity of Securities at approximately 4:00 p.m., New York City time, on such
determination date from three recognized securities dealers in The City of New
York (none of which shall be an Affiliate of the Company) selected by the
Company; provided, however, if (a) at least three such bids are not obtained by
the Bid Solicitation Agent or (b) in the Company's reasonable judgment, the bid
quotations are not indicative of the secondary market value of the Securities as
of such determination date, then the LYON Market Price for such determination
date shall equal (i) the Conversion Rate in effect as of such determination date
multiplied by (ii) the average Sale Price of the Common Stock for the five
trading days ending on such determination date, 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
determination date, of any event described in Section 11.06, 11.07 or 11.08
(subject to the conditions set forth in Sections 11.09 and 11.10) of the
Indenture.
The term "Quarterly Period" shall mean, with respect to any Contingent
Interest Period, any quarterly period within such Contingent Interest Period
extending from May 1 to July 31, from August 1 to October 30, from October 31 to
January 31 or from February 1 to April 30.
Upon determination that Holders will be entitled to receive contingent
interest which may become payable during a Contingent Interest Period, on or
prior to the first day of such Contingent Interest Period, the Company shall
promptly notify the Trustee of such determination and shall issue a press
release and publish such information on its web site. The Company shall also
notify the Trustee of the declaration of any Regular Cash Dividends and the
related record and payment dates.
6. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the option
of the Company for cash in accordance with the Indenture at the Redemption
Prices set forth below, provided that the Securities are not redeemable prior to
April 30, 2006.
The table below shows Redemption Prices of a Security per $1,000 Principal
Amount at Maturity on the dates shown below and at Stated Maturity, which prices
reflect accrued Original Issue Discount calculated to each such date. The
Redemption Price of a Security redeemed between such dates shall include an
additional amount reflecting the additional Original Issue Discount accrued
since the preceding date in the table but not including the Redemption Date.
6
(1) (2) (3)
Accrued Redemption
LYON Original Issue Price
Redemption Date Issue Price Discount (1) + (2)
- - --------------- ----------- -------- ---------
April 30
2006........................................... $741.37 $37.91 $779.28
2007........................................... 741.37 45.73 787.10
2008........................................... 741.37 53.62 794.99
2009........................................... 741.37 61.59 802.96
2010........................................... 741.37 69.64 811.01
2011........................................... 741.37 77.77 819.14
2012........................................... 741.37 85.98 827.35
2013........................................... 741.37 94.27 835.64
2014........................................... 741.37 102.65 844.02
2015........................................... 741.37 111.11 852.48
2016........................................... 741.37 119.66 861.03
2017........................................... 741.37 128.29 869.66
2018........................................... 741.37 137.01 878.38
2019........................................... 741.37 145.81 887.18
2020........................................... 741.37 154.71 896.08
2021........................................... 741.37 163.69 905.06
2022........................................... 741.37 172.76 914.14
2023........................................... 741.37 181.93 923.30
2024........................................... 741.37 191.18 932.56
2025........................................... 741.37 200.53 941.90
2026........................................... 741.37 209.98 951.35
2027........................................... 741.37 219.51 960.88
2028........................................... 741.37 229.15 970.52
2029........................................... 741.37 238.88 980.25
2030........................................... 741.37 248.70 990.07
At Stated Maturity............................. 741.37 258.63 1,000.00
If this Security has been converted to a semiannual coupon note following
the occurrence of a Tax Event, the Redemption Price will be equal to the
Restated Principal Amount plus accrued and unpaid interest from the date of such
conversion to but not including the Redemption Date.
In addition to the Redemption Price payable with respect to all Securities
or portions thereof to be redeemed as of a Redemption Date, the Holders of such
Securities (or portions thereof) shall be entitled to receive accrued and unpaid
semiannual and contingent interest, if any, with respect thereto, which interest
shall be paid in cash on the Redemption Date.
7
7. Purchase by the Company at the Option of the Holder.
(a) Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Securities held
by such Holder on the following Purchase Dates and at the following Purchase
Prices per $1,000 Principal Amount at Maturity, upon delivery of a Purchase
Notice containing the information set forth in the Indenture, at any time from
the opening of business on the date that is 20 Business Days prior to such
Purchase Date until the close of business on such Purchase Date and upon
delivery of the Securities to the Paying Agent by the Holder as set forth in the
Indenture.
Purchase Date Purchase Price
April 30, 2002............................. $748.80
April 30, 2004............................. $763.89
April 30, 2006............................. $779.28
April 30, 2011............................. $819.14
April 30, 2016............................. $861.03
April 30, 2021............................. $905.06
April 30, 2026............................. $951.35
The Purchase Price (equal to the Issue Price plus accrued Original Issue
Discount to the Purchase Date) may be paid, at the option of the Company, in
cash or by the issuance and delivery of shares of Common Stock of the Company,
or in any combination thereof.
If prior to a Purchase Date this Security has been converted to a
semiannual coupon note following the occurrence of a Tax Event, the Purchase
Price will be equal to the Restated Principal Amount plus accrued and unpaid
interest from the date of conversion to the Purchase Date.
(b) At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase the Securities
held by such Holder no later than 35 Business Days after the occurrence of a
Change in Control of the Company but in no event prior to the date on which such
Change in Control occurs occurring on or prior to April 30, 2006 for a Change in
Control Purchase Price equal to the Issue Price plus accrued Original Issue
Discount to the Change in Control Purchase Date, which Change in Control
Purchase Price shall be paid in cash. If prior to a Change in Control Purchase
Date this Security has been converted to a semiannual coupon note following the
occurrence of a Tax Event, the Change in Control Purchase Price shall be equal
to the Restated Principal Amount plus accrued and unpaid interest from the date
of conversion to the Change in Control Purchase Date.
A third party may make the offer and purchase of the Securities in lieu of
the Company in accordance with the Indenture.
(c) In addition to the Purchase Price or Change in Control Purchase Price,
as the case may be, payable with respect to all Securities or portions thereof
to be purchased as of the Purchase Date or the Change in Control Purchase Date,
as the case may be, the Holders of such
8
Securities (or portions thereof) shall be entitled to receive accrued and unpaid
semiannual and contingent interest, if any, with respect thereto, which interest
shall be paid in cash promptly following the later of the Purchase Date or the
Change in Control Purchase Date, as the case may be, and the time of delivery of
such Securities to the Paying Agent pursuant to the Indenture.
Holders have the right to withdraw any Purchase Notice or Change in Control
Purchase Notice, as the case may be, by delivering to the Paying Agent a written
notice of withdrawal in accordance with the provisions of the Indenture.
If cash (and/or securities if permitted under the Indenture) sufficient to
pay the Purchase Price or Change in Control Purchase Price, as the case may be,
of, together with any accrued and unpaid semiannual and contingent interest with
respect to, all Securities or portions thereof to be purchased as of the
Purchase Date or the Change in Control Purchase Date, as the case may be, is
deposited with the Paying Agent on the Business Day following the Purchase Date
or the Change in Control Purchase Date, as the case may be, Original Issue
Discount and interest (including semiannual and contingent interest), if any,
shall cease to accrue on such Securities (or portions thereof) immediately after
such Purchase Date or Change in Control Purchase Date, as the case may be, and
the Holder thereof shall have no other rights as such (other than the right to
receive the Purchase Price or Change in Control Purchase Price, as the case may
be, and accrued and unpaid semiannual and contingent interest, if any, upon
surrender of such Security).
8. Notice of Redemption.
Notice of redemption will be mailed at least 15 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
the Holder's registered address. If money sufficient to pay the Redemption Price
of, and accrued and unpaid semiannual and contingent interest, if any, with
respect to, all Securities (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent prior to or on the Redemption
Date, on such Redemption Date, Original Issue Discount and interest (including
semiannual and contingent interest), if any, shall cease to accrue on such
Securities or portions thereof. Securities in denominations larger than $1,000
of Principal Amount at Maturity may be redeemed in part but only in integral
multiples of $1,000 of Principal Amount at Maturity.
9. Conversion.
Subject to the provisions of this section 9 and notwithstanding the fact
that any other condition to conversion has not been satisfied, Holders may
convert the Securities into Common Stock on a Conversion Date in any calendar
quarter commencing after June 30, 2001, if, as of the last day of the preceding
calendar quarter, the Sale Price of the Common Stock for at least 20 trading
days in a period of 30 consecutive trading days ending on the last trading day
of such preceding calendar quarter is greater than the conversion trigger price.
The "conversion trigger price" for any calendar quarter shall be a reference
percentage, beginning at 120%, and declining 0.084% per quarter thereafter, of
the accreted conversion price per share of Common Stock on the last trading day
of such preceding calendar quarter.
The "accreted conversion price" per share of Common Stock as of any day
equals the quotient of:
9
o the Issue Price and accrued Original Issue Discount to that day, divided
by
o the number of shares of Common Stock issuable upon conversion of $1,000
Principal Amount at Maturity of Securities on that day.
For illustrative purposes only, the table below shows the conversion
trigger price per share of Common Stock in respect of each of the first 20
calendar quarters. These prices reflect the accreted conversion price per share
of Common Stock (assuming that no events occurred requiring an adjustment to the
initial Conversion Rate of 17.1544 shares of Common Stock per $1,000 Principal
Amount of Maturity) multiplied by the applicable percentage for the respective
calendar quarter. Thereafter, the accreted conversion price per share of Common
Stock increases each calendar quarter by the accrued Original Issue Discount for
the quarter and the applicable percentage declines by 0.084% per quarter.
(1) (2) (3)
Accreted Applicable Conversion
Conversion Reference Trigger Price
Quarter Price Percentage (1)x(2)
------- ----- ---------- -------
2001
Third Quarter........................................ $43.30 120.00% $51.95
Fourth Quarter....................................... 43.40 119.92% 52.05
2002
First Quarter........................................ 43.51 119.83% 52.14
Second Quarter....................................... 43.62 119.75% 52.23
Third Quarter........................................ 43.73 119.66% 52.33
Fourth Quarter....................................... 43.84 119.58% 52.42
2003
First Quarter........................................ 43.95 119.50% 52.52
Second Quarter....................................... 44.06 119.41% 52.61
Third Quarter........................................ 44.17 119.33% 52.70
Fourth Quarter....................................... 44.28 119.24% 52.80
2004
First Quarter........................................ 44.39 119.16% 52.89
Second Quarter....................................... 144.50 119.08% 52.99
Third Quarter........................................ 44.61 118.99% 53.08
Fourth Quarter....................................... 44.72 118.91% 53.18
2005
First Quarter........................................ 44.83 118.82% 53.27
Second Quarter....................................... 44.95 118.74% 53.37
Third Quarter........................................ 45.06 118.66% 53.46
Fourth Quarter....................................... 45.17 118.57% 53.56
2006
First Quarter........................................ 45.28 118.49% 53.66
Second Quarter....................................... 45.40 118.40% 53.75
Subject to the provisions of this section 9 and notwithstanding the fact
any other condition to conversion has not been satisfied, Holders may convert
the Securities into Common Stock on a Conversion Date during any period in which
the credit rating assigned to the
10
Securities by a Rating Agency is at or below the Applicable Rating. "Rating
Agency" means (1) Moody's Investors Service, Inc. and its successors
("Moody's"), or (2) Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies Inc., and its successors ("Standard & Poor's").
"Applicable Rating" means a credit rating that is more than three rating
subcategories below the initial credit rating assigned to the LYONs.
Subject to the provisions of this section 9 and notwithstanding the fact
that any other condition to conversion has not been satisfied, a Holder may
convert into Common Stock a Security or portion of a Security which has been
called for redemption pursuant to section 6 hereof but such Securities may be
surrendered for conversion until the close of business on the second Business
Day immediately preceding the Redemption Date.
Subject to the provisions of this section 9 and notwithstanding the fact
that any other condition to conversion has not been satisfied, in the event that
the Company declares a dividend or distribution described in Section 11.07 of
the Indenture, or a dividend or a distribution described in Section 11.08 of the
Indenture where the fair market value of such dividend or distribution per share
of Common Stock, as determined in the Indenture, exceeds 15% of the Sale Price
of the Common Stock on the Business Day immediately preceding the date of
declaration for such dividend or distribution, the Company will be required to
give notice to the Holders of the Securities at least 20 days prior to the Ex-
Dividend Time for such dividend or distribution, and Securities may be
surrendered for conversion at any time thereafter until the close of business on
the Business Day prior to the Ex-Dividend Time or until the Company announces
that such dividend or distribution will not take place.
Subject to the provisions of this section 9 and notwithstanding the fact
that any other condition to conversion has not been satisfied, in the event the
Company is a party to a consolidation, merger or binding share exchange pursuant
to which the Common Stock would be converted into cash, securities or other
property as set forth in Section 11.14 of the Indenture, the Securities may be
surrendered for conversion at any time from and after the date which is 15 days
prior to the date the Company announces the anticipated effective time until 15
days after the actual effective date of such transaction, and at the effective
time of such transaction the right to convert a Security into Common Stock will
be deemed to have changed into a right to convert it into the kind and amount of
cash, securities or other property of the Company or another person which the
holder would have received if the holder had converted its Security immediately
prior to the transaction.
A Security in respect of which a Holder has delivered a Purchase Notice or
Change in Control Purchase Notice exercising the option of such Holder to
require the Company to purchase such Security may be converted only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 17.1544 shares of Common Stock per $1,000
Principal Amount at Maturity, subject to adjustment in certain events described
in the Indenture. The Company will deliver cash or a check in lieu of any
fractional share of Common Stock.
In the event the Company exercises its option pursuant to Section 10.01 of
the Indenture to have interest in lieu of Original Issue Discount accrue on the
Security following a Tax Event,
11
the Holder will be entitled on conversion to receive the same number of shares
of Common Stock such Holder would have received if the Company had not exercised
such option.
To convert a Security, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the
Security to the Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (4) pay any transfer or similar tax, if required.
Accrued and unpaid interest in lieu of Original Issue Discount and
semiannual and contingent interest will not be paid in cash on Securities that
are converted; provided, however that Securities surrendered for conversion
during the period, in the case of interest in lieu of Original Issue Discount
payable under section 11(a) or semiannual interest payable under section 11(c),
from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business on such Interest Payment Date
or, in the case of contingent interest, from the close of business on any date
on which contingent interest accrues to the opening of business on the date on
which such contingent interest is payable, shall be entitled to receive such
interest in lieu of Original Issue Discount or semiannual or contingent
interest, as the case may be, payable on such Securities on the corresponding
Interest Payment Date or the date on which such contingent interest is payable
and (except Securities with respect to which the Company has mailed a notice of
redemption) Securities surrendered for conversion during such periods must be
accompanied by payment of an amount equal to the interest in lieu of Original
Issue Discount or semiannual or contingent interest with respect thereto that
the registered Holder is to receive.
A Holder may convert a portion of a Security if the Principal Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. No payment
or adjustment will be made for dividends on the Common Stock except as provided
in the Indenture. On conversion of a Security, that portion of accrued Original
Issue Discount (or interest if the Company has exercised its option provided for
in section 11(a) hereof or is required to pay interest pursuant to section 11(c)
hereof) attributable to the period from the Issue Date (or, if the Company has
exercised the option referred to in section 11(a) hereof, the later of (w) the
date of such exercise and (x) the date on which interest was last paid and, if
the Company is required to pay interest pursuant to section 11(c) hereof, the
later of (y) 150 days after the issuance of the Securities and (z) the date on
which interest was last paid) through the Conversion Date and (except as
provided above) accrued contingent interest with respect to the converted
Security shall not be cancelled, extinguished or forfeited, but rather shall be
deemed to be paid in full to the Holder thereof through the 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 terms
hereof; and the fair market value of such shares of Common Stock (together with
any such cash payment in lieu of fractional shares) shall be treated as issued,
to the extent thereof, first in exchange for Original Issue Discount (or
interest, if the Company has exercised its option provided for in section 11(a)
hereof or is required to pay interest pursuant to section 11(c) hereof) accrued
through the Conversion Date and accrued contingent interest, and the balance, if
any, of such fair market value of such Common Stock (and any such cash payment)
shall be treated as issued in exchange for the Issue Price of the Security being
converted pursuant to the provisions hereof.
12
The Conversion Rate will be adjusted for dividends or distributions on
Common Stock payable in Common Stock or other Capital Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock for a period
expiring within 60 days of the record date for such distribution at less than
the Sale Price of the Common Stock at the Time of Determination; and
distributions to such holders of assets (including shares of Capital Stock of a
Subsidiary) or debt securities of the Company or certain rights to purchase
securities of the Company (excluding certain cash dividends or distributions).
However, no adjustment need be made if Securityholders may participate in the
transaction or in certain other cases. The Company from time to time may
voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a
Security into Common Stock may be changed into a right to convert it into
securities, cash or other assets of the Company or another person.
In the event that the Company pays a dividend of or makes a distribution on
shares of Common Stock of the Company consisting of Capital Stock of, or similar
equity interests in, a Subsidiary or other business unit of the Company, the
Conversion Rate will be adjusted based on the market value of the securities so
distributed relative to the market value of the Common Stock of the Company, in
each case based on the average closing prices of those securities for the ten
trading days commencing on and including the fifth trading day after the date on
which "ex-dividend" trading commences for such dividend or distribution on the
principal United States securities exchange or market on which the securities
are then listed or quoted.
10. Conversion Arrangement on Call for Redemption.
Any Securities called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such Securities at an amount not less than the
Redemption Price, by one or more investment bankers or other purchasers who may
agree with the Company to purchase such Securities from the Holders, to convert
them into Common Stock of the Company and to make payment for such Securities to
the Trustee in trust for such Holders.
11. Tax Event; Failure to Obtain Required Rating
(a) From and after (i) the date (the "Tax Event Date") of the occurrence of
a Tax Event and (ii) the date the Company exercises such option, whichever is
later (the later of such dates, the "Option Exercise Date"), at the option of
the Company, interest in lieu of future Original Issue Discount shall accrue at
the rate of 1.00% per annum on a principal amount per Security (the "Restated
Principal Amount") equal to the Issue Price plus Original Issue Discount accrued
through the Option Exercise Date.
(b) From and after the Option Exercise Date, contingent interest provided
for in section 5 hereof shall cease to accrue on this Security.
13
(c) If by the close of business on the 150/th/ day following the issuance
of the Securities (or if such 150th day is not a Business Day, the next
succeeding Business Day), the Company has not obtained at least one of (i) a
rating on the Securities, or a senior unsecured issuer rating on the Company, of
Baa2 or better by Moody's or (ii) a rating on the Securities, or a senior
unsecured issuer rating on the Company, of BBB or better by Standard & Poor's
(each, a "Required Rating"), then from and after such 150/th/ day, interest
shall accrue at the rate of 0.50% per annum on the Issue Price of the
Securities.
(d) Interest accrual on any Security under section 11(a) or 11(c) above
shall be payable semiannually on April 30 and October 30 of each year (each an
"Interest Payment Date") to holders of record at the close of business on April
15 or October 15 (each a "Regular Record Date") immediately preceding such
Interest Payment Date. Such 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 in the case of section 11(a) or the date that is 150 days
after the issuance of the Securities (in the case of section 11(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.
12. Defaulted Interest
Except as otherwise specified with respect to the Securities, any Defaulted
Interest on any Security shall forthwith cease to be payable to the registered
Holder thereof on the relevant Regular Record Date or accrual date, as the case
may be, by virtue of having been such Holder, and such Defaulted Interest may be
paid by the Company as provided for in Section 12.02(b) of the Indenture.
13. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount at Maturity and integral multiples
of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not transfer
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities in respect of which a Purchase Notice or Change in Control
Purchase Notice has been given and not withdrawn (except, in the case of a
Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.
14
14. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of this
Security for all purposes.
15. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, subject to
applicable unclaimed property laws. After return to the Company, Holders
entitled to the money or securities must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person.
16. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended with the written consent of the Holders of at
least a majority in aggregate Principal Amount at Maturity of the Securities at
the time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate Principal Amount at Maturity
of the Securities at the time outstanding. Subject to certain exceptions set
forth in the Indenture, without the consent of any Securityholder, the Company
and the Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 or Section 11.14
of the Indenture, to secure the Company's obligations under this Security or to
add to the Company's covenants for the benefit of the Securityholders or to
surrender any right or power conferred, or to comply with any requirement of the
SEC in connection with the qualification of the Indenture under the TIA, or as
necessary in connection with the registration of the Securities under the
Securities Act or to make any change that does not adversely affect the rights
of any Holders.
17. Defaults and Remedies.
Under the Indenture, Events of Default include (i) default in the payment
of contingent interest when the same becomes due and payable or of semiannual
interest which becomes due and payable upon exercise by the Company of its
option provided for in section 11(a) hereof or pursuant to section 11(c) hereof
which default in any such case continues for 30 days; (ii) default in payment of
the Principal Amount at Maturity (or, if the Securities have been converted to
semiannual coupon notes following a Tax Event, the Restated Principal Amount),
Issue Price plus accrued Original Issue Discount, Redemption Price, Purchase
Price or Change in Control Purchase Price, as the case may be, in respect of the
Securities when the same becomes due and payable; (iii) failure by the Company
to comply with other agreements in the Indenture or the Securities, subject to
notice and lapse of time; (iv) (a) failure of the Company to make any payment by
the end of any applicable grace period after maturity of Debt in an amount in
excess of $10,000,000, or (b) the acceleration of Debt in an amount in excess of
$10,000,000 because of a default with respect to such Debt without such Debt
having been discharged or such acceleration having been cured, waived, rescinded
or annulled, subject to notice and lapse of time; provided, however, that if any
such failure or acceleration referred to in (a) or (b) above
15
shall cease or be cured, waived, rescinded or annulled, then the Event of
Default by reason thereof shall be deemed not to have occurred; and (v) certain
events of bankruptcy or insolvency. If an Event of Default occurs and is
continuing, the Trustee, or the Holders of at least 25% in aggregate Principal
Amount at Maturity of the Securities at the time outstanding, may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities becoming
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security reasonably satisfactory
to it. Subject to certain limitations, Holders of a majority in aggregate
Principal Amount at Maturity of the Securities at the time outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default (except a Default
in payment of amounts specified in clause (i) or (ii) above) if it determines
that withholding notice is in their interests.
18. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
19. No Recourse Against Others.
A director, officer, employee, agent, representative, or stockholder or
equity holder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
20. Authentication.
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
21. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
22. Original Issue Discount Information Reporting Requirements.
In accordance with the United States Treasury Regulation Section 1.1275-3,
a Holder
16
may obtain the projected payment schedule by submitting a written request for
such information to the following representative of the Company: Gwen E. Royle,
c/o Stilwell Financial Inc., 920 Main Street, 21/st/ Floor, Kansas City, MO
64105.
23. GOVERNING LAW.
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
---------------
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
Stilwell Financial Inc.
920 Main Street, 21st flr
Kansas City, MO 64105-2008
Attention: Chief Financial Officer
17
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- - ------------------------------------------------------------------------
- - ------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax ID no.)
- - ------------------------------------------------------------------------
- - ------------------------------------------------------------------------
- - ------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
- - ------------------------ agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check the box:
To convert only part of this Security, state the Principal Amount at Maturity to
be converted (which must be $1,000 or an integral multiple of $1,000):
$
--------------------------
If you want the stock certificate made out in another person's name, fill in the
form below:
- - ------------------------------------------------------------------------
- - ------------------------------------------------------------------------
(Insert other person's soc. sec. or tax ID no.)
- - ------------------------------------------------------------------------
- - ------------------------------------------------------------------------
- - ------------------------------------------------------------------------
(Print or type other person's name, address and zip code)
Date: Your Signature:
---------------------------- --------------------
- - ------------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Security)
18
EXHIBIT A-2
[Form of Certificated Security]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THIS
SECURITY IS ISSUED WITH AN INDETERMINATE AMOUNT OF ORIGINAL ISSUE DISCOUNT FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE DATE IS APRIL 30, 2001, AND
THE YIELD TO MATURITY FOR PURPOSES OF ACCRUING ORIGINAL ISSUE DISCOUNT IS 7.51%
PER ANNUM.
[INCLUDE IF SECURITY IS A CERTIFICATED SECURITY TO BE HELD BY AN
INSTITUTIONAL ACCREDITED INVESTOR--IN CONNECTION WITH ANY TRANSFER, THE HOLDER
WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOLLOWING RESTRICTIONS.]
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH STILWELL FINANCIAL INC.
(THE "COMPANY" OR THE "ISSUER") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR
ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2),(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT,
A-2-1
(D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(C) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF
THE CONDITIONS SPECIFIED IN THE INDENTURE.
A-2-2
STILWELL FINANCIAL INC.
Liquid Yield Option(TM) Note due 2031
(Zero Coupon-Senior)
No. R- CUSIP: 860831 AA4
Issue Date: April 30, 2001 Original Issue Discount: $258.63
Issue Price: $741.37 (for each $1,000 Principal
(for each $1,000 Principal Amount at Maturity)
Amount at Maturity)
STILWELL FINANCIAL INC., a Delaware corporation, promises to pay to [----]
or registered assigns, the Principal Amount at Maturity of [----] DOLLARS
($[----]) on April 30, 2031.
This Security shall not bear interest except as specified on the other side
of this Security. Original Issue Discount will accrue as specified on the other
side of this Security. This Security is convertible as specified on the other
side of this Security.
Additional provisions of this Security are set forth on the other side of
this Security.
Dated: April 30, 2001 STILWELL FINANCIAL INC.
By
-----------------------
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Chase Manhattan Bank
as Trustee, certifies that this
is one of the Securities referred
to in the within-mentioned Indenture.
By
----------------------------
Authorized Officer
A-2-3
EXHIBIT B-1
Transfer Certificate
In connection with any transfer of any of the Securities within the period
prior to the expiration of the holding period applicable to the sales thereof
under Rule 144(k) under the Securities Act of 1933, as amended (the "Securities
Act") (or any successor provision), the undersigned registered owner of this
Security hereby certifies with respect to $[----] Principal Amount at Maturity
of the above-captioned securities presented or surrendered on the date hereof
(the "Surrendered Securities") for registration of transfer, or for exchange or
conversion where the securities issuable upon such exchange or conversion are to
be registered in a name other than that of the undersigned registered owner
(each such transaction being a "transfer"), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Securities for the
reason checked below:
o A transfer of the Surrendered Securities is made to the Company or any
subsidiaries; or
o The transfer of the Surrendered Securities complies with Rule 144A
under the U.S. Securities Act of 1933, as amended (the "Securities
Act"); or
o The transfer of the Surrendered Securities is to an institutional
accredited investor, as described in Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act; or
o The transfer of the Surrendered Securities is pursuant to an effective
registration statement under the Securities Act, or
o The transfer of the Surrendered Securities is pursuant to an offshore
transaction in accordance with Rule 904 of Regulation S under the
Securities Act; or
o The transfer of the Surrendered Securities is pursuant to another
available exemption from the registration requirement of the
Securities Act.
and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").
o The transferee is an Affiliate of the Company.
DATE:
----------------------- ---------------------------------
Signature(s)
B-1-1
(If the registered owner is a corporation, partnership or
fiduciary, the title of the Person signing on behalf of
such registered owner must be stated.)
B-1-2
EXHIBIT B-2
Form of Letter to be Delivered by Accredited Investors
Stilwell Financial Inc.
920 Main Street, 21/st/ flr.
Kansas City, MO 64105-2008
Attention: Chief Financial Officer
The Chase Manhattan Bank
450 West 33/rd/ Street
New York, NY 10001
Attention: Institutional Trust Services
Dear Sirs:
We are delivering this letter in connection with the proposed transfer of
$[-----] Principal Amount at Maturity of the Liquid Yield Option Notes due 2031
("LYONs") of Stilwell Financial Inc. (the "Company"), which are convertible into
shares of the Company's Common Stock, $0.01 par value per share (the "Common
Stock").
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a)(1), (2) or (3) under
the Securities Act (an "Institutional Accredited Investor");
(ii) the purchase of LYONs by us is for our own account or for the
account of one or more other Institutional Accredited Investors or as
fiduciary for the account of one or more trusts, each of which is an
"accredited investor" within the meaning of Rule 501(a)(7) under the
Securities Act and for each of which we exercise sole investment discretion
or (B) we are a "bank," within the meaning of Section 3(a)(2) of the
Securities Act, or a "savings and loan association" or other institution
described in Section 3(a)(5)(A) of the Securities Act that is acquiring
LYONs as fiduciary for the account of one or more institutions for which we
exercise sole investment discretion;
(iii) we will acquire LYONs having a minimum principal amount at
maturity of not less than $250,000 for our own account or for any separate
account for which we are acting;
C-1
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing LYONs; and
(v) we are not acquiring LYONs with a view to distribution thereof or
with any present intention of offering or selling LYONs or the Common Stock
issuable upon conversion thereof, except as permitted below; provided that
the disposition of our property and property of any accounts for which we
are acting as fiduciary shall remain at all times within our control.
We understand that the LYONs were originally offered and sold in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the LYONs and the shares of Common
Stock (the "Securities") issuable upon conversion thereof have not been
registered under the Securities Act, and we agree, on our own behalf and on
behalf of each account for which we acquire any LYONs, that if in the future we
decide to resell or otherwise transfer such Securities prior to the date (the
"Resale Restriction Termination Date") which is two years after the later of the
original issuance of the LYONs and the last date on which the Company or an
affiliate of the Company was the owner of the Security, such Securities may be
resold or otherwise transferred only (i) to Stilwell Financial Inc. or any
subsidiary thereof, or (ii) for as long as the LYONs are eligible for resale
pursuant to Rule 144A, to a person it reasonably believes is a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) that
purchases for its own account or for the account of a qualified institutional
buyer to which notice is given that the transfer is being made in reliance on
Rule 144A, or (iii) to an Institutional Accredited Investor that is acquiring
the Security for its own account, or for the account of such Institutional
Accredited Investor for investment purposes and not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act,
or (iv) pursuant to another available exemption from registration under the
Securities Act (if applicable), or (v) pursuant to a registration statement
which has been declared effective under the Securities Act and, in each case, in
accordance with any applicable securities laws of any State of the United States
or any other applicable jurisdiction and in accordance with the legends set
forth on the Securities. We further agree to provide any person purchasing any
of the Securities other than pursuant to clause (v) above from us a notice
advising such purchaser that resales of such securities are restricted as stated
herein. We understand that the trustee or the transfer agent, as the case may
be, for the Securities will not be required to accept for registration of
transfer any Securities pursuant to (iii) or (iv) above except upon presentation
of evidence satisfactory to the Company that the foregoing restrictions on
transfer have been complied with. We further understand that any Securities will
be in the form of definitive physical certificates and that such certificates
will bear a legend reflecting the substance of this section other than
certificates representing Securities transferred pursuant to clause (v) above.
We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
C-2
----------------------------
(Name of Purchaser)
By:
--------------------------
Name:
Title:
Address:
C-3
ANNEX C
Projected Payment Schedule*
Comparable Yield: 7.51% per annum
Quarterly Period Ending Projected Payment per LYON
June 1, 2006 0.00
September 1, 2006 0.00
December 1, 2006 0.00
March 1, 2007 0.00
June 1, 2007 0.00
September 1, 2007 0.00
December 1, 2007 0.00
March 1, 2008 0.00
June 1, 2008 0.00
September 1, 2008 0.00
December 1, 2008 0.00
March 1, 2009 0.00
June 1, 2009 0.61
September 1, 2009 0.62
December 1, 2009 0.64
March 1, 2010 0.65
June 1, 2010 0.67
September 1, 2010 0.67
December 1, 2010 0.70
March 1, 2011 0.70
June 1, 2011 0.73
September 1, 2011 0.73
December 1, 2011 0.76
March 1, 2012 0.76
June 1, 2012 0.79
(Continued)
- - ----------------------
* The comparable yield means the annual yield the Company would pay, as of the
Issue Date, on a fixed-rate nonconvertible debt security with no contingent
payments, but with terms and conditions otherwise comparable to those of the
LYONs, and the schedule of projected payments has been determined on the basis
of an assumption of linear growth of the stock price and a constant dividend
yield and has not been determined for any purpose other than for the
determination of interest accruals and adjustments thereof in respect of the
Securities for United States federal income tax purposes. The comparable yield
and the schedule of projected payments do not constitute a projection or
representation regarding the amounts payable on Securities.
C-1
Quarterly Period Ending Projected Payment per LYON
September 1, 2012 0.80
December 1, 2012 0.82
March 1, 2013 0.83
June 1, 2013 0.86
September 1, 2013 0.87
December 1, 2013 0.90
March 1, 2014 0.90
June 1, 2014 0.93
September 1, 2014 0.94
December 1, 2014 0.97
March 1, 2015 0.98
June 1, 2015 1.02
September 1, 2015 1.02
December 1, 2015 1.06
March 1, 2016 1.07
June 1, 2016 1.11
September 1, 2016 1.11
December 1, 2016 1.15
March 1, 2017 1.16
June 1, 2017 1.20
September 1, 2017 1.21
December 1, 2017 1.25
March 1, 2018 1.26
June 1, 2018 1.31
September 1, 2018 1.32
December 1, 2018 1.36
March 1, 2019 1.37
June 1, 2019 1.42
September 1, 2019 1.43
December 1, 2019 1.48
March 1, 2020 1.49
June 1, 2020 1.55
September 1, 2020 1.56
December 1, 2020 1.61
March 1, 2021 1.63
June 1, 2021 1.68
September 1, 2021 1.69
December 1, 2021 1.75
March 1, 2022 1.77
June 1, 2022 1.83
September 1, 2022 1.84
December 1, 2022 1.91
March 1, 2023 1.92
(Continued)
C-2
Quarterly Period Ending Projected Payment per LYON
June 1, 2023 1.99
September 1, 2023 2.00
December 1, 2023 2.07
March 1, 2024 2.09
June 1, 2024 2.16
September 1, 2024 2.18
December 1, 2024 2.25
March 1, 2025 2.27
June 1, 2025 2.35
September 1, 2025 2.37
December 1, 2025 2.45
March 1, 2026 2.47
June 1, 2026 2.56
September 1, 2026 2.58
December 1, 2026 2.66
March 1, 2027 2.69
June 1, 2027 2.78
September 1, 2027 2.80
December 1, 2027 2.90
March 1, 2028 2.92
June 1, 2028 3.02
September 1, 2028 3.05
December 1, 2028 3.15
March 1, 2029 3.18
June 1, 2029 3.29
September 1, 2029 3.31
December 1, 2029 3.43
March 1, 2030 3.46
June 1, 2030 3.57
September 1, 2030 3.60
December 1, 2030 3.73
March 1, 2031 3.76
April 30, 2031 6217.62
C-3