As filed with the Securities and Exchange Commission on November 5, 2003
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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VISHAY INTERTECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 38-1686453
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
63 Lincoln Highway
Malvern, Pennsylvania 19355-2120
(610) 644-1300
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
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Richard N. Grubb
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, Pennsylvania 19355-2120
(610) 644-1300
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
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Copy to:
Abbe L. Dienstag, Esq.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
(212) 715-9100
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Approximate Date of Commencement of Proposed Sale to the Public: From time to
time after the effective date of this Registration Statement.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
|-|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
Proposed
Maximum
Title of each class of Offering Aggregate Amount of
securities to be Amount to Price Offering Registration
registered be Registered Per Unit Price(1) Fee
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3 5/8% Convertible
Subordinated Notes
Due 2023 $500,000,000(2) 100% $500,000,000(2) $40,450
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Common Stock, par
value $0.10 per
share 23,496,250(3) -- (4) -- (4) -- (4)
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) of the Securities Act of 1933, as amended (the
"Securities Act"), and exclusive of any accrued interest.
(2) Represents the aggregate outstanding principal amount of 3 5/8% Convertible
Subordinated Notes Due 2023 (the "Notes").
(3) Represents the number of shares of our common stock that are initially
issuable upon conversion of the Notes at a rate of 46.9925 shares of common
stock per $1,000 principal amount at maturity of the Notes, and an initial
conversion price of $21.28 per share of common stock. Pursuant to Rule 416
of the Securities Act, this registration statement also covers such
additional shares that may be issued as a result of a change in the amount
of securities being offered or issued to prevent dilution resulting from
stock splits, stock dividends or similar transactions.
(4) Pursuant to Rule 457(i) under the Securities Act, there is no filing fee
with respect to shares of common stock issuable upon conversion of the
Notes because no additional consideration will be received in connection
with the exercise of the conversion privilege.
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The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Preliminary Prospectus, Subject to Completion, dated November 4, 2003
(Vishay logo)
$500,000,000 Principal Amount of
3 5/8% Convertible Subordinated Notes Due 2023
and
Shares of Common Stock Issuable Upon Conversion of the Notes
We originally issued $500 million aggregate principal amount of our 3 5/8%
Convertible Subordinated Notes due 2023 in a private placement in August 2003.
This prospectus will be used by selling securityholders to resell their notes
and the common stock issuable upon conversion of the notes.
Holders may convert the notes into our common stock prior to stated
maturity if: (1) the sale price of our common stock reaches specified
thresholds; (2) the trading price of the notes falls below specified thresholds;
(3) the notes have been called for redemption; (4) rating assigned to the notes
by either one of two rating agencies is lowered by two or more rating levels,
the credit rating assigned to the notes is suspended or withdrawn, or neither
rating agency is rating the notes; or (5) specified corporate transactions
occur.
The initial conversion rate is 46.9925 shares of our common stock per
$1,000 principal amount, which is equivalent to a conversion price of $21.28 per
share of common stock. The conversion rate is subject to adjustment upon the
occurrence of specified events. Upon conversion, we will have the right to
deliver, in lieu of shares of our common stock, cash or a combination of cash
and shares of our common stock.
We may not redeem the notes before August 1, 2010. On or after that date,
we may redeem all or part of the notes for cash at a price equal to 100% of the
principal amount of the notes to be redeemed plus any accrued and unpaid
interest.
Holders may require us to purchase all or a portion of their notes on
August 1, 2008, August 1, 2010, August 1, 2013 and August 1, 2018. Holders may
also require us to purchase all or a portion of their notes, subject to
specified exceptions, upon the occurrence of a fundamental change specified in
this prospectus.
The notes will rank junior in right of payment to all of our existing and
future senior indebtedness.
Since their initial issuance, the notes have been eligible for trading on
the PORTAL Market of the New York Stock Exchange. However, notes sold by means
of this prospectus are not expected to remain eligible for trading on the PORTAL
Market. We do not intend to list the notes for trading on any other automated
interdealer quotation system or any securities exchange.
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Our shares of common stock trade on the New York Stock Exchange under the
symbol "VSH". On November 3, 2003, the last sale price of the shares as reported
on the New York Stock Exchange was $19.01 per share.
Investing in our securities involves risks that are described in the "Risk
Factors" section beginning on page 7 of this prospectus.
The selling securityholders will receive all of the net proceeds from the
sale of the securities and will pay all underwriting discounts and selling
commissions. We are responsible for the payment of other expenses incident to
the registration of the securities.
Neither the Securities and Exchange Commission, any state securities
commission nor any other regulatory body has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus is November , 2003.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Important Notice about the Information Presented in this Prospectus
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not making an offer
to sell these securities in any jurisdiction where the offer or sale is not
permitted.
You should assume that the information appearing in this prospectus is
accurate as of the date on the front cover of this prospectus only. The
business, financial condition, results of operations and prospects of Vishay may
have changed since that date.
TABLE OF CONTENTS
PROSPECTUS SUMMARY...........................................................1
RATIO OF EARNINGS TO FIXED CHARGES...........................................5
FORWARD LOOKING INFORMATION..................................................6
RISK FACTORS.................................................................7
RECENT DEVELOPMENTS.........................................................15
USE OF PROCEEDS.............................................................16
DESCRIPTION OF NOTES........................................................16
DESCRIPTION OF CAPITAL STOCK................................................42
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS............................44
SELLING SECURITYHOLDERS.....................................................51
PLAN OF DISTRIBUTION........................................................61
LEGAL MATTERS...............................................................63
EXPERTS.....................................................................63
WHERE YOU CAN FIND MORE INFORMATION.........................................64
i
PROSPECTUS SUMMARY
You should read this entire prospectus, including the information set
forth under "Risk Factors" and the information incorporated by reference in this
prospectus. As used in this prospectus, "Vishay," "company," "we," "us" and
"our" refer to Vishay Intertechnology, Inc. and its consolidated subsidiaries,
unless otherwise specified.
Vishay Intertechnology, Inc.
Vishay Intertechnology, Inc. is a leading international manufacturer and
supplier of passive and active electronic components. Passive components include
resistors, capacitors, transducers and inductors. Our offering of active
components includes discrete semiconductors, diodes, rectifiers, infrared data
communications devices and power and analog switching circuits. Passive
electronic components and discrete active electronic components, together with
integrated circuits, are the primary elements of almost every electronic
circuit. We offer our customers "one-stop" access to one of the most
comprehensive electronic component lines of any manufacturer in the United
States, Europe and Asia. Our components are used in virtually all types of
electronic products, including those in the industrial, automotive, consumer
electronics, telecommunications, electronics manufacturing services, computer
and military/aerospace markets. We had total net sales of $1.82 billion in 2002
and total net sales of $1.6 billion for the nine months ended September 30,
2003.
In the past two years, we have taken advantage of the downturn in the
electronics industry and the strength of our balance sheet to acquire businesses
at prices that we believe would not have been available in other economic
environments. In December 2002, we acquired BCcomponents Holdings, a leading
manufacturer of passive components in Europe, India and the People's Republic of
China, with a broad portfolio of products. Also in 2002, our Measurements Group
acquired five manufacturers of transducers and related products that are used in
the measurement of stresses, loads, forces and pressure. In November 2001, we
acquired General Semiconductor, Inc., a manufacturer of rectifiers, power
management devices and other discrete semiconductor components. These
acquisitions have broadened our product lines, cushioned the effects of the
current downturn and, we believe, helped position our company for growth.
Our long-term objective is to expand our position as a low-cost producer
of a comprehensive line of electronic components. We are led by our founder, Dr.
Felix Zandman, and senior executives who collectively have over 150 years of
service to Vishay. This management team is focused on continued implementation
of our growth strategy, through which we intend to:
o expand within the electronic components industry, primarily through
the acquisition of other manufacturers of electronic components that
have established positions in major markets, reputations for product
quality and reliability, and product lines with which we have
substantial marketing and technical expertise;
o achieve a leading position in the market for each of our major
product lines;
o reduce selling, general and administrative expenses through the
integration or elimination of redundant sales offices and
administrative functions at acquired companies;
o achieve significant production cost savings through the transfer to
and expansion of manufacturing operations in regions such as Israel,
Mexico, Portugal, the Czech Republic, Malaysia, the Republic of
China (Taiwan) and the People's Republic of China, which offer lower
labor costs and tax and other government-sponsored incentives;
o maintain significant production facilities in those regions where we
market our products to service our customers;
o consistently develop, introduce and market new and innovative
products; and
o strengthen our relationships with customers.
We were incorporated in Delaware in 1962 and maintain our principal
executive offices at 63 Lincoln Highway, Malvern, Pennsylvania 19355-2143. Our
telephone number is (610) 644-1300.
We have two classes of stock: common stock that has one vote per share and
Class B common stock that has 10 votes per share. Only the common stock is
publicly traded. The Class B common stock is privately held. All references in
this prospectus to common stock are to our publicly traded common stock and not
to the Class B common stock.
The Offering
The following summary contains basic information about the notes and is
not intended to be complete. It does not contain all the information that is
important to you. For a more complete understanding of the notes, please refer
to the section of this prospectus entitled "Description of Notes." For purposes
of the description of the notes included in this prospectus, references to "the
company," "issuer," "us," "Vishay," "we" and "our" refer only to Vishay
Intertechnology, Inc. and do not include our subsidiaries.
Securities Offered $500,000,000 aggregate principal amount of 3 5/8%
Convertible Subordinated Notes due 2023.
Maturity August 1, 2023, unless earlier redeemed, repurchased or
converted.
Interest 3 5/8% per year on the principal amount, payable
semiannually in arrears on each February 1 and August 1,
beginning on February 1, 2004.
Conversion Rights The notes are convertible at the option of the holder,
prior to the close of business on the maturity date,
under any of the following circumstances:
(i) during any calendar quarter after the quarter ending
September 30, 2003, if the last reported sale price
of our common stock for at least 20 trading days
during the period of 30 consecutive trading days
ending on the last trading day of the immediately
preceding calendar quarter is greater than or equal
to 130% of the conversion price per share of our
common stock;
(ii) during the five-business-day period following any
ten consecutive trading days in which the average of
the trading prices for the notes was less than 98%
of the average last reported sale price of our
common stock multiplied by the conversion rate;
(iii) if we have called the notes for redemption;
(iv) during any period that the credit rating assigned to
the notes by either Moody's Investors Service, Inc.
or Standard & Poor's Rating Group is
2
reduced by two or more ratings levels from the
rating initially assigned by such rating agency to
the notes, if the credit rating assigned to the
notes is suspended or withdrawn by both such rating
agencies or if neither rating agency is rating the
notes; or
(v) upon the occurrence of specified corporate
transactions described under "Description of
Notes-Conversion Rights-Conversion Upon Specified
Corporate Transactions."
For each $1,000 original principal amount of notes
surrendered for conversion, holders will receive 46.9925
shares of our common stock. This represents an initial
conversion price of $21.28 per share of common stock. As
described in this prospectus, the conversion rate may be
adjusted for certain reasons, but it will not be adjusted
for accrued and unpaid interest. Except as otherwise
described in this prospectus, holders will not receive
any payment representing accrued and unpaid interest upon
conversion of a note; however, we will continue to pay
additional amounts, if any, on the notes and the common
stock issued upon conversion thereof to the holder in
accordance with the registration rights agreement.
Upon conversion, we will have the right to deliver, in
lieu of shares of our common stock, cash or a combination
of cash and shares of our common stock. See "Description
of Notes--Conversion Rights."
Optional Redemption On or after August 1, 2010, upon at least 30 days'
notice, we may redeem for cash all or a portion of the
notes at any time for a price equal to 100% of the
principal amount of the notes to be redeemed, plus any
accrued and unpaid interest, including additional amounts
owed, if any, to but excluding the redemption date. See
"Description of Notes--Optional Redemption."
Purchase of Notes by Holders of the notes will have the right to require us
us at the Option of to purchase all or a portion of their notes on August 1,
the Holder 2008, August 1, 2010, August 1, 2013 and August 1, 2018,
each of which we refer to as a purchase date. In each
case, we will pay a purchase price equal to 100% of the
principal amount of notes to be purchased, plus any
accrued and unpaid interest, to but excluding the
purchase date. We may elect to pay the purchase price in
cash, shares of common stock or any combination of cash
and common stock. See "Description of Notes-Purchase of
Notes by Us at the Option of the Holders."
Repurchase at the If we undergo a Fundamental Change (as defined under
Option of Holders "Description of Notes-Fundamental Change Permits Holders
Upon a Fundamental to Require Us to Purchase Notes") prior to maturity,
Change holders will have the right, at their option, to require
us to purchase all of their notes or any portion of the
principal amount thereof that is equal to $1,000 or an
integral multiple of $1,000. We will pay the following
purchase prices expressed as a percentage of the
principal amount of the notes plus accrued and unpaid
interest and additional amounts, if any, to but excluding
the purchase date:
3
Period Purchase Price
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Beginning on August 6, 2003 and ending
on July 31, 2008....................... 105.0%
August 1, 2008 and thereafter.......... 100.0%
See "Description of Notes--Fundamental Change Permits
Holders to Require Us to Purchase Notes."
We may choose to pay the purchase price in cash, shares
of our common stock or a combination of cash and shares
of the common stock. If we elect to pay all or a portion
of the purchase price in shares of common stock, the
shares of common stock will be valued at 98% of the
market price (as defined herein) of the common stock.
Subordination The notes are junior in right of payment to all of our
existing and future senior indebtedness. As of
September 30, 2003, we had $336 million of indebtedness
outstanding other than the notes, $105 million of which
was senior to the notes. As of September 30, 2003, our
subsidiaries had approximately $1,381 million of
liabilities outstanding which would effectively rank
senior to the notes. The indenture under which the notes
are issued does not limit our ability and the ability of
our subsidiaries to incur additional indebtedness. See
"Description of Notes-Subordination of Notes."
Events of Default The following are events of default under the indenture
for the notes:
o we fail to pay principal of any note when due;
o we fail to pay interest, including additional
amounts, if any, on any note when due and that
default continues for 30 days or more;
o we fail to comply with or observe any other
covenant or warranty in the indenture or in the
notes and that failure continues for 60 days or
more after written notice as provided in the
indenture;
o we fail to convert notes into shares of common
stock upon exercise of a holder's conversion right
and that default continues for 10 days or more;
o we or any of our material subsidiaries fail to pay
when due, either at its final stated maturity or
upon acceleration thereof, any indebtedness (other
than indebtedness which is non-recourse to us or
any subsidiary) for money borrowed equal to $25
million or more and such failure is not cured, or
the acceleration is not rescinded or annulled,
within 30 days after written notice as provided in
the indenture; and
4
o certain events of bankruptcy, insolvency or
reorganization involving us or our material
subsidiaries. See "Description of Notes--Events of
Default and Remedies."
Registration Rights We have entered into a registration rights agreement with
the initial purchasers of the notes in which we agreed to
file the shelf registration statement of which this
prospectus is a part with the SEC.
Book-Entry Form The notes have been issued in book-entry form and are
represented by one or more permanent global certificates
deposited with, or on behalf of, The Depository Trust
Company and registered in the name of a nominee of DTC.
Beneficial interests in any of the notes are shown on,
and transfers of the notes may be effected only through,
records maintained by DTC or its nominee and any such
interest may not be exchanged for certificated
securities, except under limited circumstances.
Use of Proceeds We will not receive any proceeds from the sale of the
notes or the shares of common stock offered by this
prospectus.
Trading Since their initial issuances the notes have been
eligible for trading in the PORTAL Market. However, notes
sold by means of this prospectus are not expected to
remain eligible for trading on the PORTAL Market.
We do not intend to apply for a listing of the notes on
any securities exchange or any automated dealer quotation
system, and we cannot assure you about the liquidity of
or the development of any trading market for the notes.
Our common stock is listed on the New York Stock Exchange
under the symbol "VSH."
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the six months ended June 30, 2003 and for each of the preceding five fiscal
years. In calculating these ratios, earnings include pre-tax income before
adjustment for minority interest in consolidated subsidiaries plus fixed charges
and exclude equity in net income of our affiliates. Fixed charges include gross
interest expense, amortization of deferred financing expenses and an amount
equivalent to interest included in rental charges. We have assumed that
one-third of rental expense is representative of the interest factor.
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Six Months Year Ended December 31
Ended --------------------------------------
June 30, 2003 2002(1) 2001 2000 1999 1998
Ratio of earnings to fixed charges.... 1.71 -- 1.39 21.35 3.16 1.72
- ----------------------
(1) Earnings were insufficient to cover fixed charges by $61,674,000.
5
FORWARD LOOKING INFORMATION
Some of the statements in this prospectus and in documents incorporated by
reference constitute forward-looking statements. These forward-looking
statements reflect our current views with respect to future events or our
financial performance, and involve certain known and unknown risks,
uncertainties and other factors, including those identified below, which may
cause our or our industry's actual or future results, levels of activity,
performance or achievements to differ materially from those expressed or implied
by any forward-looking statements or from historical results. In some cases, you
can identify forward-looking statements by terminology such as "may," "will,"
"could," "would," "should," "believe," "expect," "plan," "anticipate," "intend,"
"estimate," "predict," "potential" and other expressions which indicate future
events and trends. We have no duty to update or revise any forward-looking
statements after the date of this prospectus or to conform them to actual
results, new information, future events or otherwise.
The following factors, among others, could cause our or our industry's
future results to differ materially from historical results or those
anticipated:
o overall economic and business conditions;
o competitive factors in the industries in which we conduct our
business;
o changes in governmental regulation;
o the demand for our goods and services;
o the fact that our customers may cancel orders they have placed with
us, in whole or in part, without advance notice;
o changes in tax requirements, including tax rate changes, new tax
laws and revised tax law interpretations;
o changes in generally accepted accounting principles or
interpretations of those principles by governmental agencies and
self-regulatory groups;
o developments in and results of litigation;
o interest rate fluctuations, foreign currency rate fluctuations and
other capital market conditions;
o economic and political conditions in international markets,
including governmental changes and restrictions on the ability to
transfer capital across borders;
o changes in the cost of raw materials used in our business;
o the timing, impact and other uncertainties of acquisitions that we
may consider or consummate; and
o our ability to achieve anticipated synergies and other cost savings
in connection with such acquisitions.
6
These factors and the risk factors described in this document are all of
the important factors of which we are aware that could cause actual results,
performance or achievements to differ materially from those expressed in any of
our forward-looking statements. We operate in a continually changing business
environment, and new risk factors emerge from time to time. Other unknown or
unpredictable factors also could have material adverse effects on our future
results, performance or achievements. We cannot assure you that projected
results or events will be achieved or will occur.
RISK FACTORS
You should carefully consider the following information with the other
information contained or incorporated by reference in this prospectus.
Risk factors related to our business generally
Our business is cyclical and the current decline in demand in the electronic
component industry may continue and may become more pronounced.
We and others in the electronic and semiconductor component industry have
experienced in the past two years a decline in product demand on a global basis,
resulting in order cancellations and deferrals, lower average selling prices,
and a material and adverse impact on our results of operations. This decline has
been primarily attributable to a slowing of growth in the personal computer and
cellular telephone product markets. If the decrease in the demand for our
products continues or becomes more pronounced, or overall supply increases
because we or our competitors expand production capacity, our average sales
prices could decline further, causing a reduction in our gross margins and
operating profits. In addition, the combination of a decline in demand, together
with recessionary trends in the global economy makes it difficult for us to
predict our future sales, which also makes it more difficult to manage our
operations.
We have incurred and may continue to incur restructuring costs.
To remain competitive, particularly when business conditions are
difficult, we attempt to reduce our cost structure through restructuring
activities. This includes acquisition-related restructuring, where we attempt to
streamline the operations of companies we acquire and achieve synergies between
our acquisitions and our existing business. It also includes restructuring our
existing businesses, where we seek to eliminate redundant facilities and staff
positions and move operations, where possible, to jurisdictions with lower labor
costs. In 2002, we recorded restructuring costs of approximately $48 million
related to acquisitions and $31 million related to our existing businesses. We
have incurred $19 million of additional restructuring expenses in the first nine
months of 2003 and expect to continue to incur such expenses for the remainder
of 2003.
In the past we have grown through acquisitions but this may not continue.
Our long-term historical growth in revenues and net earnings has resulted
in large part from our strategy of expansion through acquisitions. We cannot
assure you, however, that we will identify or successfully complete transactions
with suitable acquisition candidates in the future. We also cannot assure you
that acquisitions that we complete in the future will be successful. If an
acquired business fails to operate as anticipated or cannot be successfully
integrated with our other businesses, our results of operations, enterprise
value, market value and prospects could all be materially and adversely
affected.
7
Our debt levels have recently increased, which could adversely affect the
perception in the financial markets of our financial condition.
Our outstanding debt increased from approximately $141 million at the end
of 2000 to approximately $836 million at September 30, 2003. This increase
reflects the issuance of the notes, net of debt repaid with the proceeds of this
issuance. It also reflects our acquisition activity, particularly the
acquisition of General Semiconductor, Inc. in November 2001, in which we assumed
approximately $170 million in convertible notes issued by General Semiconductor
and $85 million in bank debt, and the acquisition of BCcomponents in December
2002, in which we issued or assumed indebtedness of approximately $275 million.
The increase in indebtedness was offset somewhat by the repayment of outstanding
debt with cash from operations. The marketplace could react negatively to our
current debt levels which in turn could affect our share price and also make it
more difficult for us to obtain financing in the future. Our higher debt level
was one of the factors cited by Moody's Investor Services, Inc. when it
announced in April 2003 that it had lowered our debt ratings. On July 31, 2003,
Moody's announced that it had upwardly revised its ratings of our debt based on
its belief that the restructuring of our credit facility and the issuance of the
notes alleviates short term liquidity concerns. On October 31, 2003, Moody's
announced that it had downgraded our ratings, citing what it termed the
continuing weakness in our business, particularly our passives business, and the
possibility of further special charges, particularly in connection with our
tantalum purchase commitments.
In June 2004, holders of our Liquid Yield Option(TM) Notes (LYONs) will
have the right to "put" these notes to us at an aggregate price of approximately
$235 million, giving effect to our repurchase of a portion of the LYONs with
proceeds from our sale of the notes. We believe that, if necessary, we will have
adequate cash resources to finance the purchase of any LYONs that are put to us.
Also, we may elect to pay all or part of the purchase price for the LYONs that
are put to us in shares of our common stock. Nevertheless, our obligation to
purchase the LYONs in June 2004 could be a cause of concern in the financial
markets and was another factor cited by Moody's when it downgraded our debt.
To remain successful, we must continue to innovate.
Our future operating results are dependent on our ability to continually
develop, introduce and market new and innovative products, to modify existing
products, to respond to technological change and to customize certain products
to meet customer requirements. There are numerous risks inherent in this
process, including the risks that we will be unable to anticipate the direction
of technological change or that we will be unable to develop and market new
products and applications in a timely fashion to satisfy customer demands. If
this occurs, we could lose customers and experience adverse effects on our
financial condition and results of operations.
Future acquisitions could require us to issue additional indebtedness or equity.
If we were to undertake a substantial acquisition for cash, the
acquisition would likely need to be financed in part through bank borrowings or
the issuance of public or private debt. This acquisition financing would likely
decrease our ratio of earnings to fixed charges and adversely affect other
leverage criteria. Under our existing credit facility, we are required to obtain
the lenders' consent for certain additional debt financing and to comply with
other covenants including the application of specific financial ratios. We are
also restricted from paying cash dividends on our capital stock. We cannot
assure you that the necessary acquisition financing would be available to us on
acceptable terms when required. If we were to undertake an acquisition for
equity, the acquisition may have a dilutive effect on the interests of the
holders of our common stock.
(TM)Trademark of Merrill Lynch & Co., Inc.
8
Our results are sensitive to raw material availability, quality and cost.
General: Many of our products require the use of raw materials that are
produced in only a limited number of regions around the world or are available
from only a limited number of suppliers. Our results of operations may be
materially and adversely affected if we have difficulty obtaining these raw
materials, the quality of available raw materials deteriorates or there are
significant price increases for these raw materials. For example, the prices for
tantalum and palladium, two raw materials that we use in our capacitors, are
subject to fluctuation. For periods in which the prices of these raw materials
are rising, we may be unable to pass on the increased cost to our customers
which would result in decreased margins for the products in which they are used.
For periods in which the prices are declining, we may be required to write down
our inventory carrying cost of these raw materials, since we record our
inventory at the lower of cost or market. Depending on the extent of the
difference between market price and our carrying cost, this write-down could
have a material adverse effect on our net earnings. As discussed below, we have
recorded substantial write-downs of tantalum and palladium in the current
economic downturn.
From time to time there have been short-term market shortages of raw
materials. While these shortages have not historically adversely affected our
ability to increase production of products containing tantalum and palladium,
they have historically resulted in higher raw material costs for us. We cannot
assure you that any of these market shortages in the future would not adversely
affect our ability to increase production, particularly during periods of
growing demand for our products.
Tantalum: We are a major consumer of the world's annual production of
tantalum. Tantalum, a metal purchased in powder or wire form, is the principal
material used in the manufacture of tantalum capacitors. There are currently
three major suppliers that process tantalum ore into capacitor grade tantalum
powder. Due to the strong demand for our tantalum capacitors and difficulty in
obtaining sufficient quantities of tantalum powder from our suppliers, we
stockpiled tantalum ore in 2000 and early 2001. During 2001, we experienced a
significant decrease in sales due to declining orders and the deferral or
cancellation of existing orders. Our tantalum capacitor business was
particularly impacted by the slowdown in sales. Prices for tantalum ore and
powder decreased during this period. As a result, we recorded write-downs of
$52,000,000 on tantalum during 2001.
In June 2002, we agreed with Cabot Corporation to amend our two tantalum
supply agreements for the supply by Cabot to us of tantalum powder and wire.
Pursuant to the amendments, we and Cabot agreed to reduce volumes, and starting
in 2003, prices of tantalum products under the agreements and to extend the term
of one of the agreements by one year. We also agreed to purchase tantalum
products at regular intervals over the term of the agreements. These amendments
require us to purchase tantalum products in excess of our current usage
requirements.
In the fourth quarter of 2002 we took charges of approximately $106
million against our contractual commitments to purchase tantalum powder and wire
from Cabot through 2006 and wrote-down approximately $25.7 million of our
existing inventory of tantalum ore, powder and wire to present market value. In
the third quarter of 2003, we took additional charges of approximately $11.4
million against our contractual commitments to purchase tantalum powder and wire
from Cabot, and wrote-down inventory on hand by approximately $4.2 million to
present market value. We did this because the current market prices of tantalum
are substantially below the prices at which we are committed to purchase
tantalum under our long-term contracts with Cabot and the prices at which we
were carrying our tantalum raw materials inventory. If market prices for
tantalum were to decline further, we could be required to record additional
write-downs on our tantalum purchase commitments and inventory.
Palladium: Palladium, a metal used to produce multi-layered ceramic
capacitors, is currently found primarily in South Africa and Russia. Palladium
is a commodity product subject to price volatility.
9
The price of palladium has fluctuated in the range of approximately $179 to
$1,090 per troy ounce during the last three years. As of September 30, 2003, the
price of palladium was approximately $213 per troy ounce. During 2001 and 2002,
we recorded write-downs on our palladium inventories of $18 million and $1.7
million respectively.
Our backlog is subject to customer cancellation.
As of September 30, 2003, our backlog was $434 million. Many of the orders
that comprise our backlog may be canceled by our customers without penalty. Our
customers may on occasion double and triple order components from multiple
sources to ensure timely delivery when backlog is particularly long. They often
cancel orders when business is weak and inventories are excessive, a phenomenon
that we have experienced in the current economic slowdown. Therefore, we cannot
be certain the amount of our backlog does not exceed the level of orders that
will ultimately be delivered. Our results of operations could be adversely
impacted if customers cancel a material portion of orders in our backlog.
We face intense competition in our business, and we market our products to an
increasingly concentrated group of customers.
Our business is highly competitive worldwide, with low transportation
costs and few import barriers. We compete principally on the basis of product
quality and reliability, availability, customer service, technological
innovation, timely delivery and price. The electronics components industry has
become increasingly concentrated and globalized in recent years and our major
competitors, some of which are larger than us, have significant financial
resources and technological capabilities.
Our customers have become increasingly concentrated in recent years, and
as a result, their buying power has increased and they have had greater ability
to negotiate favorable pricing. This trend has adversely affected our average
selling prices, particularly for commodity components.
We may not have adequate facilities to satisfy future increases in demand for
our products.
Our business is cyclical and in periods of a rising economy, we may
experience intense demand for our products. During such periods, we may have
difficulty expanding our manufacturing to satisfy demand. Factors which could
limit such expansion include delays in procurement of manufacturing equipment,
shortages of skilled personnel and capacity constraints at our facilities. If we
are unable to meet our customers' requirements and our competitors sufficiently
expand production, we could lose customers and/or market share. This loss could
have an adverse effect on our financial condition and results of operations.
Future changes in our environmental liability and compliance obligations may
harm our ability to operate or increase costs.
Our manufacturing operations, products and/or product packaging are
subject to environmental laws and regulations governing air emissions,
wastewater discharges, the handling, disposal and remediation of hazardous
substances, wastes and certain chemicals used or generated in our manufacturing
processes, employee health and safety labeling or other notifications with
respect to the content or other aspects of our processes, products or packaging,
restrictions on the use of certain materials in or on design aspects of our
products or product packaging and responsibility for disposal of products or
product packaging. We establish reserves for specifically identified potential
environmental liabilities which we believe are adequate. Nevertheless, we often
unavoidably inherit certain pre-existing environmental liabilities, generally
based on successor liability doctrines. Although we have never been involved in
any environmental matter that has had a material adverse impact on our overall
operations, there can be no assurance that in connection with any past or future
acquisition we will not be obligated to
10
address environmental matters that could have a material adverse impact on our
operations. In addition, more stringent environmental regulations may be enacted
in the future, and we cannot presently determine the modifications, if any, in
our operations that any such future regulations might require, or the cost of
compliance with these regulations. In order to resolve liabilities at various
sites, we have entered into various administrative orders and consent decrees,
some of which may be, under certain conditions, reopened or subject to
renegotiations.
Our products may experience a reduction in product classification levels under
various military specifications.
We have qualified certain of our products under various military
specifications, approved and monitored by the United States Defense Electronic
Supply Center, and under certain European military specifications. These
products are assigned certain classification levels. In order to maintain the
classification level of a product, we must continuously perform tests on the
product and the results of these tests must be reported to governmental
agencies. If any of our products fails to meet the requirements of the
applicable classification level, that product's classification may be reduced to
a lower level. A decrease in the classification level for any of our products
with a military application could have an adverse impact on the net sales and
earnings attributable to that product.
Risk factors relating to Vishay's operations outside the United States
We obtain substantial benefits by operating in Israel, but these benefits may
not continue.
We have increased our operations in Israel over the past several years.
The low tax rates in Israel applicable to earnings of our operations in that
country, compared to the rates in the United States, have had the effect of
increasing our net earnings, although this was not the case in 2002. Also, we
have benefited from employment incentive grants made by the Israeli government.
Recently, the Israeli government suspended payment on one of these grants after
we were forced to lay off a significant number of employees as a result of the
current economic downturn. Although we reached agreement with the Israeli
government to resume payment on this grant, there can be no assurance that we
will maintain our eligibility for this or other existing project grants. There
can also be no assurance in the future the Israeli government will continue to
offer new grant and tax incentive programs applicable to us or that, if it does,
such programs will provide the same level of benefits we have historically
received or that we will continue to be eligible to take advantage of them. Any
significant increase in the Israeli tax rates or reduction or elimination of the
Israeli grant programs that have benefited us could have an adverse impact on
our results of operations.
We attempt to improve profitability by operating in countries in which labor
costs are low, but the shift of operations to these regions may entail
considerable expense.
Our strategy is aimed at achieving significant production cost savings
through the transfer and expansion of manufacturing operations to and in
countries with lower production costs, such as Israel, Mexico, Portugal, the
Czech Republic, Malaysia, the Republic of China (Taiwan) and the People's
Republic of China. In this process, we may experience under-utilization of
certain plants and factories in high labor cost regions and capacity constraints
in plants and factories located in low labor cost regions. This
under-utilization may result initially in production inefficiencies and higher
costs. These costs include those associated with compensation in connection with
work force reductions and plant closings in the higher labor cost regions, and
start-up expenses, manufacturing and construction delays, and increased
depreciation costs in connection with the initiation or expansion of production
in lower labor cost regions.
11
As we implement transfers of certain of our operations we may experience
strikes or other types of labor unrest as a result of lay-offs or termination of
our employees in high labor cost countries.
We are subject to the risks of political, economic and military instability in
countries outside the United States in which we operate.
We have operations outside the United States, and approximately 69% of our
revenues during 2002 were derived from sales to customers outside the United
States. Some of the countries in which we operate have in the past experienced
and may continue to experience political, economic and military instability or
unrest. These conditions could have an adverse impact on our ability to operate
in these regions and, depending on the extent and severity of these conditions,
could materially and adversely affect our overall financial condition and
operating results. In particular, current tensions in the Middle East could
adversely affect our business operations in Israel and elsewhere.
Our business may have been affected by the recent outbreak of SARS and the
effects of that outbreak may linger.
The recent outbreak of severe acute respiratory syndrome, or SARS, that
began in the People's Republic of China adversely affected our business during
the first six months of 2003, particularly in Asia where we derived
approximately 38% of our revenue in 2002. This impact included disruptions in
the operations of our customers, a slowdown in customer orders and reduced sales
in certain end markets. We cannot predict if the adverse effects of the SARS
outbreak will continue and, if so, the time period during which these effects
will continue to be felt.
Risk factors relating to Vishay's capital structure
The holders of our Class B common stock have effective voting control of Vishay.
The holders of our Class B common stock have effective voting control of
Vishay. We have two classes of common stock: common stock and Class B common
stock. The holders of our common stock are entitled to one vote for each share
held, while the holders of our Class B common stock are entitled to 10 votes for
each share held. Currently, the principal holder of our Class B common stock,
our chairman and chief executive officer, controls approximately 49.1% of our
outstanding voting power. As a result, this holder of Class B common stock can
effectively cause the election of directors and approve other actions as a
stockholder by obtaining votes from a relatively small number of other
stockholders of Vishay. For example, at our most recent annual meeting of
stockholders, a proposal to stagger our company's board of directors was
approved despite a vote against this proposal by a majority of voting
stockholders other than holders of the Class B common stock.
The existence of our Class B common stock may deprive other stockholders of a
premium value for their shares in a takeover.
The effective control that holders of our Class B common stock have over
our company may make us less attractive as a target for a takeover proposal. It
may also make it more difficult or discourage a merger proposal or proxy contest
for the removal of the incumbent directors, even if such actions were favored by
a substantial majority of our stockholders other than the holders of our Class B
common stock. Accordingly, this may deprive the holders of our common stock of
an opportunity they might otherwise have to sell their shares at a premium over
the prevailing market price in connection with a merger or acquisition of Vishay
with or by another company.
12
We have a staggered board of directors which could make a takeover of Vishay
difficult.
At our most recent annual meeting of stockholders, our stockholders
approved a proposal to stagger our board of directors. A staggered board of
directors might discourage, delay or prevent a change in control of our company
by a third party and could discourage proxy contests and make it more difficult
for our stockholders to elect directors and take other corporate actions. Also,
as a consequence of our staggered board, directors may not be removed without
cause, even though a majority of stockholders may wish to do so.
Risk factors relating to the notes
Because the notes are subordinated to our senior debt and effectively
subordinated to the debt and other liabilities of our subsidiaries, you may not
receive full payment on your notes.
The notes are junior in right of payment to all of our debt, other than
any future debt that expressly provides that it ranks pari passu with, or is
subordinated in right of payment to, the notes. As a result, upon any
distribution to our creditors in a bankruptcy, liquidation, reorganization or
similar proceeding, the holders of our senior debt will be entitled to be paid
in full before any payment will be made on the notes.
In addition, all payments on the notes may be blocked in the event of a
payment default until cured, or for up to 179 days in the event of certain
non-payment defaults of senior indebtedness.
In the event of a bankruptcy, liquidation or reorganization or similar
proceeding relating to us, holders of the notes will participate in our assets
with trade creditors and all other holders of our debt. However, because the
indenture for the notes requires that amounts otherwise payable to holders of
the notes in a bankruptcy or similar proceeding to be paid to holders of senior
debt instead, holders of the notes may receive less ratably than holders of our
other debt in any such proceeding. In any of these cases, holders of the notes
may not be paid in full.
As of September 30, 2003, we had $336 million of debt outstanding other
than the notes, $105 million of which is senior in right of payment to the
notes.
The notes are also effectively subordinated in right of payment to all
debt and other liabilities of all of our subsidiaries.
We derive substantially all our revenues from, and hold substantially all
our assets through, our subsidiaries. As a result, we will depend on
distributions and advances from our subsidiaries in order to meet our payment
obligations under the notes and our other obligations. In general, these
subsidiaries are separate and distinct legal entities and will have no
obligations to pay any amounts due on our debt securities, including the notes,
or to provide us with funds for our payment obligations, whether by dividends,
distributions, loans or otherwise. Our right to receive any assets of any
subsidiary in the event of a bankruptcy or liquidation of the subsidiary, and
therefore the right of our creditors to participate in those assets, will be
effectively subordinated to the claims of that subsidiary's creditors, including
trade creditors. In addition, even if we were a creditor of any subsidiary, our
rights as a creditor would be subordinated to any indebtedness of that
subsidiary senior to that held by us, including secured indebtedness to the
extent of the assets securing such indebtedness. As of September 30, 2003, our
subsidiaries had approximately $1,381 million of liabilities outstanding which
would effectively rank senior to the notes.
The indenture under which the notes are issued does not limit our ability
or the ability of our subsidiaries to incur additional indebtedness.
See "Description of Notes--Subordination."
13
We expect that the trading value of the notes will be significantly affected by
the price of our common stock and other factors and our stock price may be
volatile and could decline substantially.
The market price of the notes is expected to be significantly affected by
the market price of our common stock. This may result in greater volatility in
the trading value of the notes than would be expected for nonconvertible debt
securities we issue. From the beginning of 2002 to September 30, 2003, the
reported high and low sales prices for our common stock ranged from a low of
$6.70 per share to a high of $26.15 per share. The market price of our common
stock will likely continue to fluctuate in response to factors including those
listed elsewhere in this "Risk Factors" section, under the caption "Forward
Looking Information" and the following, many of which are beyond our control:
o quarterly fluctuations in our operating and financial results;
o changes in financial estimates and recommendations by financial
analysts;
o fluctuations in the stock price and operating results of our
competitors;
o our credit rating with major credit rating agencies;
o the prevailing interest rates being paid by other companies similar
to us;
o other financing activity in which we may engage;
o our financial condition, financial performance and future prospects;
and
o the overall condition of the financial markets.
The stock markets in general, including the New York Stock Exchange, have
experienced substantial price and trading fluctuations. These fluctuations have
resulted in volatility in the market prices of securities that often has been
unrelated or disproportionate to changes in operating performance. These broad
market fluctuations may adversely affect the market prices of our notes and our
common stock.
In addition, the existence of the notes may encourage short selling in our
common stock by market participants which could depress the price of our common
stock.
We may be unable to repay or repurchase the notes.
At maturity, the entire outstanding principal amount of the notes will
become due and payable by us. In addition, holders of the notes will have the
right to require us to repurchase all or a portion of their notes on August 1,
2008, August 1, 2010, August 1, 2013 and August 1, 2018 or if a "Fundamental
Change," as defined in the indenture, occurs. If a purchase date or a
Fundamental Change occurs at a time when we are prohibited from purchasing or
redeeming notes under our revolving bank credit facility we could seek the
consent of our lenders to redeem the notes or attempt to refinance the notes or,
if permitted to do so at the time, pay the purchase or redemption price in
shares of our common stock. We cannot assure you that we will have sufficient
funds or will be able to obtain any required consents or arrange for additional
financing to pay the principal amount at maturity or repurchase price when due.
Our failure to repay the notes at maturity or to repurchase any tendered notes
would constitute an event of default under the indenture. Any such default, in
turn, may cause a default under the terms of our other debt. In such event,
holders of the notes would be subordinate in right of payment to holders of all
of our senior debt.
14
The notes are not protected by restrictive covenants.
The indenture governing the notes does not contain any financial or
operating covenants or restrictions on the payments of dividends, the incurrence
of indebtedness or the issuance or repurchase of securities by us or any of our
subsidiaries. The indenture contains no covenants or other provisions to afford
protection to holders of the notes in the event of a fundamental change
involving us, except to the extent described under "Description of
Notes--Fundamental Change Permits Holders to Require Us to Purchase Notes."
Shares eligible for public sale after this offering could adversely affect our
stock price and in turn the market price of the notes.
The future sale of a substantial number of our shares of common stock in
the public market, or the perception that such sales could occur, could
significantly reduce our stock price which, in turn, could adversely affect the
market price of the notes. It could also make it more difficult for us to raise
funds through equity offerings in the future.
We cannot assure you that a trading market will exist for the notes.
Although a market in the notes is currently being made by certain
financial institutions, this market making activity may be discontinued at any
time without notice. Consequently, we cannot ensure that the market for the
notes will be maintained. If an active market for the notes is not sustained,
the trading price of the notes could be materially and adversely affected and
could trade at prices that may be lower than the initial offering price of the
notes.
The conditional conversion feature of the notes could result in you receiving
less than the value of the common stock into which a note is convertible.
The notes are convertible into shares of our common stock only if
specified conditions are met. If the specific conditions for conversion are not
met, you will not be able to convert your notes, and you may not be able to
receive the value of the common stock into which the notes would otherwise be
convertible.
The market price for the notes may be affected by their ratings.
The notes have been assigned a rating by each of Moody's Investor
Services, Inc. and Standard & Poor's Rating Group. If the ratings assigned to
the notes were reduced or withdrawn in the future, the market price of the notes
and our common stock could be adversely affected. Also, a negative change in the
rating of other debt that we issue could adversely affect the trading value of
the notes.
RECENT DEVELOPMENTS
Results for the Nine Months Ended September 30, 2003
On October 29, 2003, we announced our unaudited financial results for the
quarter ended September 30, 2003. Sales for the quarter totaled $533.2 million,
an increase of 13.1% over sales of $471.4 million for the quarter ended
September 30, 2002. Gross profit was $102.5 million, a decrease of 4.4% over
gross profit of $107.2 million for the quarter ended September 30, 2002.
Operating income was $4.2 million, a decrease of 84.1% over operating income of
$26.4 million for the quarter ended September 30, 2002. Income tax expense was
$5.2 million for the quarter ended September 30, 2003 as compared to $5.5
million for the quarter ended September 30, 2002. Net earnings were $6.8
million, or $0.04 per share, a decrease of 48.1% over net earnings of $13.1
million, or $0.08 per share, for the quarter
15
ended September 30, 2002. Our book-to-bill ratio for the quarter ended September
30, 2003 was 1.03, reflecting a book-to-bill ratio for the active business of
1.09 and a book-to-bill ratio for the passive business of 0.97. Our backlog was
$434 million at September 30, 2003.
On October 31, 2003, Moody's Investors Service announced that it had
downgraded the senior implied rating of our company to B1 from Ba3, citing what
it termed the continuing weakness in our business, particularly our passives
business, and the possibility of further special charges, particularly in
connection with our tantalum purchase commitments. It also said that the outlook
for all ratings was negative.
USE OF PROCEEDS
We will not receive any cash proceeds from the sale of the notes or the
shares of common stock offered by this prospectus.
DESCRIPTION OF NOTES
The notes were issued under an indenture dated as of August 6, 2003,
between us and Wachovia Bank, National Association, as trustee. Copies of the
indenture and the registration rights agreement entered into with the initial
purchasers of the notes are filed as exhibits to the registration statement of
which this prospectus forms a part and may be obtained in the manner indicated
under "Where You Can Find More Information." The following is a summary of
certain provisions of the indenture and the registration rights agreement and
does not purport to be complete. Reference should be made to all provisions of
the indenture and the registration rights agreement, including the definitions
of certain terms contained therein. As used in this section, the terms "Vishay,"
the "company," "we," "us" and "our" refer to Vishay Intertechnology, Inc., but
not any of our subsidiaries, unless the context requires otherwise.
General
The notes are our general unsecured obligations. Our payment obligations
under the notes are subordinated in right of payment to all of our existing and
future senior indebtedness and are effectively subordinated to all existing and
future liabilities of our subsidiaries. See "--Subordination of Notes." The
indenture under which the notes are issued does not limit us or our subsidiaries
from incurring additional indebtedness.
The notes will mature on August 1, 2023, and are limited to an aggregate
principal amount of $500 million.
Holders of notes have the option, subject to fulfillment of certain
conditions and during the periods described below, to convert their notes into
shares of our common stock initially at a conversion price of $21.28 per share
of common stock, subject to adjustments as described below. This is equivalent
to a conversion rate of approximately 46.9925 shares of common stock per $1,000
principal amount of notes. Upon conversion of a note, holders will receive only
shares of our common stock and a cash payment to account for fractional shares.
In lieu of delivering common stock upon conversion of all or any portion of the
notes, we may elect to pay holders surrendering notes for conversion cash or any
combination of cash and common stock as described herein. See "Description of
the Notes--Conversion Rights."
The notes accrue interest at a rate of 3 5/8% per annum from August 6,
2003, or from the most recent interest payment date to which interest has been
paid or duly provided for, and any accrued and unpaid interest and additional
amounts, if any, will be payable semi-annually in arrears on February 1 and
August 1 of each year, beginning February 1, 2004. Interest will be paid to the
person in whose name a note is registered at the close of business on the
January 15 or July 15 (any of which we refer to as a "record date") immediately
preceding the relevant interest payment date. However, in the case of a note
redeemed by us at our option or repurchased upon the occurrence of a Fundamental
Change, as described below, during the period from the applicable record date
to, but excluding, the next succeeding interest payment date, accrued interest
will be payable to the holder of the note redeemed or repurchased, and we will
not be required to pay interest on such interest payment date in respect of any
such note (or portion
16
thereof). Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months and, in the case of an incomplete month, the actual number
of days elapsed. Interest payments for the notes will include accrued interest
from and including the date of issue or from and including the last date in
respect of which interest has been paid, as the case may be, to, but excluding
the related interest payment date or date of maturity, as the case may be.
We are not subject to any financial covenants under the indenture. In
addition, we are not restricted under the indenture from paying dividends,
incurring debt, securing our debt or issuing or repurchasing our securities.
Holders of notes are not afforded protection in the event of a highly
leveraged transaction, or a change of control of us under the indenture, except
to the extent described below under the caption "--Fundamental Change Permits
Holders to Require Us to Purchase Notes."
Principal, interest and additional amounts, if any, on the notes will be
payable in same-day funds by transfer to an account maintained by the payee at
the office or agency maintained for such purpose. Until otherwise designated by
us, the office or agency maintained for such purpose will be the principal
corporate trust office of the trustee.
If any interest payment date, maturity date, purchase date or Fundamental
Change repurchase date falls on a day that is not a business day, the required
payment of principal, interest and additional amounts, if any, will be made on
the next succeeding business day as if made on the date that the payment was
due, and no interest will accrue on that payment for the period from and after
the interest payment date, maturity date, purchase date or Fundamental Change
repurchase date, as the case may be, to the date of payment on the next
succeeding business day. The term "business day" means, with respect to any
note, any day other than a Saturday, a Sunday or a day on which banking
institutions in The City of New York are authorized or required by law,
regulation or executive order to close.
The notes have been issued in book-entry form and are represented by
permanent global certificates deposited with, or on behalf of, The Depository
Trust Company and registered in the name of a nominee of DTC. Beneficial
interests in any of the notes are shown on, and transfers of the notes may be
effected only through, records maintained by DTC or its nominee and any such
interest may not be exchanged for certificated securities, except under limited
circumstances. For so long as the notes are held in book-entry form, references
in this section to holders of the notes, unless the context otherwise requires,
refers to beneficial owners of interests in the global notes acting through DTC
and its participants in accordance with the practices and procedures of DTC and
those participants. See "--Book Entry; Global Notes."
Ranking
The notes are junior in right of payment to all of our existing and future
senior indebtedness. As of September 30, 2003, we had $336 million of
indebtedness outstanding other than the notes, $105 million of which were senior
to the notes. The notes are also effectively subordinated in right of payment to
all debt and other liabilities of our subsidiaries. As of September 30, 2003,
our subsidiaries had approximately $1,381 million of liabilities outstanding
which effectively rank senior to the notes. The indenture does not limit the
amount of additional indebtedness that we can create, incur, assume or
guarantee, or limit the amount of assets that we can use to secure our other
indebtedness, nor does the indenture limit the amount of indebtedness and other
liabilities that any subsidiary can create, incur, assume or guarantee.
17
Conversion Rights
Subject to the conditions and during the periods described below, prior to
the close of business on the maturity date of the notes (subject to prior
redemption or repayment), holders may convert all or some of their notes into
shares of our common stock initially at a conversion price of $21.28 per share
of common stock. This is equivalent to a conversion rate of approximately
46.9925 shares of common stock per $1,000 principal amount of notes. The
conversion rate and the equivalent conversion price in effect at any given time
are subject to adjustment as described below. A note for which a holder has
delivered a purchase notice or a notice requiring us to redeem such note upon a
Fundamental Change may be surrendered for conversion only if such notice is
withdrawn in accordance with the indenture.
Upon conversion, we may choose to deliver, in lieu of shares of our common
stock, cash or a combination of cash and shares of our common stock, as
described below.
Except as described below under "--Conversion Price Adjustments," no
adjustment will be made on conversion of any notes for any interest or
additional amounts accrued on the notes or for dividends on any common stock
issued. If notes are converted after a record date for the payment of interest
and prior to the next succeeding interest payment date, such notes must be
accompanied by funds equal to the interest and additional amounts, if any,
payable on such succeeding interest payment date on the principal amount so
converted; provided, however, no such funds need be paid if (1) a payment
default has occurred and is continuing or (2) we have specified a redemption
date that is after a record date and prior to the next interest payment date.
(Holders will not receive any cash payments representing accrued interest upon
conversion except with respect to notes converted on an interest payment date.)
Delivery of shares of common stock into which a note is convertible, together
with any cash payment in lieu of any fractional shares, will satisfy our
obligation to pay the principal amount of such note and the accrued but unpaid
cash interest through the conversion date. Thus, the accrued but unpaid interest
through the conversion date will be deemed to be paid in full rather than
cancelled, extinguished or forfeited. Notwithstanding conversion of any notes,
the holders of the notes and any common stock issuable upon conversion thereof
will continue to be entitled to receive additional amounts in accordance with
the registration rights agreement. See "--Registration Rights." For a discussion
of the tax treatment to you of receiving our common stock upon conversion. See
"Certain United States Federal Income Tax Considerations."
We are not required to issue fractional shares of common stock upon
conversion of notes and, in lieu of such fractional shares, we will pay a cash
adjustment based upon the average last reported sale price (as defined below) of
the common stock during the five trading days immediately preceding the date of
conversion.
In the event any holder exercises its right to require us to purchase any
notes on any purchase date, such holder's conversion right with respect to such
notes will terminate on the close of business on the relevant purchase date,
unless we default on the payment due upon purchase of such notes or the holder
elects to withdraw the submission of election to have such notes purchased. See
"--Purchase of Notes by Us at the Option of the Holders." In the event any
holder exercises its right to require us to repurchase any notes upon a
Fundamental Change, such holder's conversion right with respect to such notes
will terminate on the close of business on the Fundamental Change purchase date,
unless we default on the payment due upon repurchase or the holder elects to
withdraw the submission of election to repurchase. See "--Fundamental Change
Permits Holders to Require Us to Purchase Notes."
The right of conversion attaching to any note may be exercised by the
holder, if the conditions to conversion are met, by delivering the note at the
specified office of a conversion agent, accompanied by a duly signed and
completed notice of conversion, together with any funds that may be required.
Such
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notice of conversion can be obtained from the trustee. Beneficial owners of
interests in a global note may exercise their right of conversion by delivering
to DTC the appropriate instruction form for conversion pursuant to DTC's
conversion program. The conversion date will be the date on which the note, the
duly signed and completed notice of conversion, and any funds that may be
required as described above shall have been so delivered. The note will be
deemed to have been converted immediately prior to the close of business on the
conversion date. A holder delivering a note for conversion will not be required
to pay any taxes or duties payable in respect of the issue or delivery of common
stock on conversion, but will be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issue or delivery of the
common stock in a name other than the holder of the note. Certificates
representing shares of common stock will not be issued or delivered unless all
taxes and duties, if any, payable by the holder have been paid.
In lieu of delivering shares of common stock upon conversion of all or any
portion of the notes, we may elect to pay holders surrendering notes for
conversion an amount in cash for each $1,000 principal amount of notes equal to
the average of the last reported sale prices (as defined below) for the five
consecutive trading days (i) immediately following the date of our notice of our
election to deliver cash, as described below, if we have not given notice of
redemption, or (ii) ending on the third trading day prior to the conversion
date, in the case of a conversion following our notice of redemption specifying
that we intend to deliver cash upon conversion, in either case multiplied by the
conversion rate in effect on the conversion date.
We will inform holders through the trustee no later than two business days
following the conversion date of our election to deliver shares of common stock
or to pay cash in lieu of delivery of shares of common stock, unless we have
already informed holders of our election in connection with our optional
redemption of the notes as described below under "--Optional Redemption." If we
elect to deliver all of such payment in shares of common stock, the shares of
common stock will be delivered through the trustee no later than the fifth
business day following the conversion date. If we elect to pay all or a portion
of such payment in cash, the payment, including any delivery of shares of common
stock, will be made to holders surrendering notes no later than the tenth
business day following the conversion date. If an event of default, as described
below under "--Events of Default" (other than a default in a cash payment upon
conversion of the notes) has occurred and is continuing or during any period
when we are prohibited from making payments on the notes pursuant to the
subordination provisions of the notes as described below under "--Subordination
of Notes," we may not pay cash upon conversion of any notes (other than cash in
lieu of fractional shares).
Our ability to pay holders cash in lieu of shares of common stock upon a
conversion of the notes is prohibited under our existing credit facility and may
be prohibited or limited in the future by the terms of our borrowing agreements
in effect from time to time.
Conversion upon satisfaction of sale price condition
A holder may surrender any of its notes for conversion into shares of our
common stock in any calendar quarter after the quarter ending September 30, 2003
if the last reported sale price of our common stock for at least 20 trading days
during the period of 30 consecutive trading days ending on the last trading day
of the immediately preceding calendar quarter is greater than 130% of the
conversion price per share of our common stock on such last trading day.
The "last reported sale price" of our common stock on any date means the
closing sale price per share (or if no closing sale price is reported, the
average of the bid and asked prices or, if more than one in either case, the
average of the average bid and the average asked prices) on that date as
reported in composite transactions for the principal U.S. securities exchange on
which our common stock is traded or,
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if our common stock is not listed on a U.S. national or regional securities
exchange, as reported by the Nasdaq National Market. If our common stock is not
listed for trading on a U.S. national or regional securities exchange and not
reported by the Nasdaq National Market on the relevant date, the "last reported
sale price" will be the last quoted bid price for our common stock in the
over-the-counter market on the relevant date as reported by the National
Quotation Bureau or similar organization. If our common stock is not so quoted,
the "last reported sale price" will be the average of the mid-point of the last
bid and asked prices for our common stock on the relevant date from each of at
least three nationally recognized independent investment banking firms selected
by us for this purpose.
Conversion based on trading price of the notes
A holder also may surrender any of its notes for conversion into shares of
our common stock during the five-business-day period following any ten
consecutive trading days in which the average of the trading prices for the
notes was less than 98% of the average of the last reported sale prices of our
common stock during such period multiplied by the conversion rate.
The "trading price" of the notes on any date of determination means the
average of the secondary market bid quotations per $1,000 principal amount of
notes obtained by the trustee for $10,000,000 principal amount of the notes at
approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers we select, provided
that if at least three such bids cannot be obtained, but two such bids are
obtained by the trustee, then the average of the two bids shall be used. If the
trustee cannot reasonably obtain at least two bids for $10,000,000 principal
amount of the notes from a nationally recognized securities dealer on any date,
or in our reasonable judgment, the bid quotations are not indicative of the
secondary market value of the notes on such date, then the trading price of the
notes on such date will be deemed to be equal to 97.9% of (i) the conversion
rate of the notes on the date of determination multiplied by (ii) the last
reported sale price of our common stock on such date.
The trustee will determine the trading price after being requested to do
so by us. We will have no obligation to make that request unless a holder of
notes provides us with reasonable evidence that the trading price of the notes
may be less than 98% of the average last reported sale prices of our common
stock multiplied by the applicable conversion rate for the applicable period. If
a holder provides such evidence, we will instruct the trustee to determine the
trading price of the notes for the applicable period.
Conversion upon credit rating event
A holder may surrender its notes for conversion into shares of our common
stock any time during any period in which the respective ratings assigned to the
notes by either Moody's Investor Services, Inc. or Standard & Poor's Rating
Group is reduced by two or more ratings levels from the rating initially
assigned by such rating agency to the notes, if the credit rating assigned to
the notes is suspended or withdrawn by both such rating agencies or if the notes
are no longer rated by at least one of these rating agencies.
Conversion upon notice of redemption
If we call any or all of the notes for redemption, holders may convert
notes into our common stock at any time prior to the close of business on the
second business day prior to the redemption date, even if the notes are not
otherwise convertible at such time. Upon conversion after a redemption call, we
may, at our option, in lieu of delivering shares of common stock to the holder,
elect to pay an amount in cash as described herein. We will give notice of our
election to pay cash in lieu of common stock in the notice of redemption.
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Conversion upon specified corporate transactions
If we elect to:
o distribute to all holders of our common stock certain rights
entitling them to purchase, for a period expiring within 60 days
after the date of the distribution, shares of our common stock at
less than the last reported sale price of a share of our common
stock on the trading day immediately preceding the declaration date
of the distribution; or
o distribute to all holders of our common stock assets, debt
securities or certain rights to purchase our securities, which
distribution has a per share value as determined by our board of
directors exceeding 15% of the last reported sale price of a share
of our common stock on the trading day immediately preceding the
declaration date of the distribution,
we must notify the holders of the notes at least 20 business days prior to the
ex-dividend date for such distribution. Once we have given such notice, holders
may surrender their notes for conversion at any time until the earlier of the
close of business on the business day immediately prior to the ex-dividend date
and our announcement that such distribution will not take place, even if the
notes are not otherwise convertible at such time. The ex-dividend date is the
first date upon which a sale of the common stock does not automatically transfer
the right to receive the relevant distribution from the seller of the common
stock to its buyer.
In addition, if we engage in certain reclassifications of our common stock
or are a party to a consolidation, merger, binding share exchange or transfer of
all or substantially all of our assets pursuant to which our common stock is
converted into cash, securities or other property, a holder may surrender notes
for conversion at any time from and after the date which is 15 days prior to the
anticipated effective date of the transaction until 15 days after the actual
effective date of such transaction, and, at the effective time of the
transaction, the right to convert a note into our common stock will be changed
into a right to convert a note into the kind and amount of cash, securities or
other property which the holder would have received if the holder had converted
its notes immediately prior to the effective date of for such transaction. If
the transaction also constitutes a Fundamental Change as defined below, a holder
can require us to purchase all or a portion of its notes as described under
"--Fundamental Change Permits Holders to Require Us to Purchase Notes."
Conversion price adjustments
The conversion price is subject to adjustment (under formulae set forth in
the indenture) in certain circumstances, including:
(i) the issuance of our common stock as a dividend or distribution on
our common stock;
(ii) certain subdivisions and combinations of our common stock;
(iii) the issuance to all holders of our common stock of certain rights or
warrants to purchase, for a period expiring within 60 days after the
date of issuance, our common stock at a price per share less than
the current market price (as defined in the indenture);
(iv) the distribution to all holders of our common stock of shares of our
capital stock (other than common stock), cash, evidences of our
indebtedness or other assets (including securities, but excluding
those rights, warrants, dividends and distributions referred to
above); and
21
(v) the purchase of our common stock pursuant to a tender offer or
exchange offer made by us or any of our subsidiaries, to the extent
that the cash and value of any other consideration included in the
payment per share of common stock exceeds the last reported sale
price of common stock on the trading day next succeeding the last
date on which tenders or exchanges may be made pursuant to such
tender or exchange offer.
The fair market value of other consideration payable under clause (v)
above will be calculated as of the expiration of the tender offer or exchange
offer.
In the case of:
o any reclassification or change of our common stock; or
o consolidation, merger, share exchange or combination involving us or
a sale, conveyance or other disposition to another corporation of
our property and assets as an entirety or substantially as an
entirety,
in each case, as a result of which holders of our common stock will be entitled
to receive stock, other securities, other property or assets (including cash)
with respect to or in exchange for our common stock, the holders of the notes
then outstanding will be entitled thereafter to convert such notes into the kind
and amount of shares of stock, other securities, other property or assets, which
they would have owned or been entitled to receive upon such reclassification,
change, consolidation, merger, share exchange, combination, sale, conveyance or
other disposition had such notes been converted into common stock immediately
prior to such reclassification, change, consolidation, merger, share exchange,
combination, sale, conveyance or other disposition (assuming, in a case in which
our stockholders may exercise rights of election, that a holder of notes would
not have exercised any rights of election as to the stock, other securities,
other property or assets receivable in connection therewith and would have
received per share the kind and amount received per share by a plurality of
non-electing shares). Certain of the foregoing events may also constitute or
result in a Fundamental Change requiring us to offer to repurchase the notes.
See "--Fundamental Change Permits Holders to Require us to Purchase Notes." The
adjustment will not be made for a consolidation, merger or share exchange or
combination that does not result in any reclassification, conversion, exchange
or cancellation of our common stock.
Certain adjustments to, or failures to adjust, the conversion price of the
notes may cause holders of notes or common stock to be treated for United States
federal income tax purposes as having received a taxable distribution under the
federal income tax laws. See "Certain U.S. Federal Income Tax Considerations."
We may, at our option, make such reductions in the conversion price as our board
of directors deems advisable to avoid or diminish any potential income tax
liability to the holders of our common stock which may result from the absence
of such adjustments.
In addition, we may from time to time (to the extent permitted by law)
reduce the conversion price underlying the notes by any amount for any period of
at least 20 days, in which case we will give at least 15 days' notice of such
decrease, if our board of directors has made a determination that such decrease
would be in our interests, which determination will be conclusive.
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% of the conversion price then in
effect; provided that any adjustment that would otherwise be required to be made
will be carried forward and taken into account in any subsequent adjustment.
Except as stated above, the conversion price will not be adjusted for the
issuance of common stock or any securities convertible into or exchangeable for
common stock or carrying the right to purchase any of the foregoing.
22
Optional Redemption
No sinking fund is provided for the notes. Prior to August 1, 2010, the
notes will not be redeemable. On or after August 1, 2010, we may redeem for cash
all or a portion of the notes at any time for a price equal to 100% of the
principal amount of the notes to be redeemed plus any accrued and unpaid
interest, including any additional amounts, to but excluding the redemption
date. We will provide not less than 30 nor more than 60 days' notice mailed to
each registered holder of the notes to be redeemed. If the redemption notice is
given and funds deposited as required, then interest, including any additional
amounts, will cease to accrue on and after the redemption date on the notes or
portions of such notes called for redemption.
Notes or portions of notes called for redemption will be convertible by
the holder until the close of business on the second business day prior to the
redemption date. Upon conversion after a redemption call, we may, at our option,
in lieu of delivering shares of common stock to the holder, elect to pay an
amount in cash for each $1,000 principal amount of notes equal to the average
last reported sale price per share of common stock for the five consecutive
trading days ending on the third trading day prior to the conversion date
multiplied by the then applicable conversion rate. We will give notice of our
election to pay cash in lieu of shares of common stock upon a conversion in the
notice of redemption.
If we decide to redeem fewer than all of the outstanding notes, the
trustee will select the notes to be redeemed in principal amounts of $1,000 or
multiples of $1,000 by lot, or on a pro rata basis or by another method the
trustee considers fair and appropriate.
If the trustee selects notes for partial redemption and a holder converts
a portion of its notes, the converted portion will be deemed to be from the
portion selected for redemption.
Purchase of Notes by Us at the Option of the Holders
Holders have the right to require us to purchase all or a portion of their
notes on August 1, 2008, August 1, 2010, August 1, 2013 and August 1, 2018
(each, a "purchase date"). We will be required to purchase any outstanding notes
for which a holder delivers a written purchase notice to the paying agent. This
notice must be delivered during the period beginning at any time from the
opening of business on the date that is 20 business days prior to the relevant
purchase date until the close of business on the third business day prior to the
purchase date. If the purchase notice is given and withdrawn during such period,
we will not be obligated to purchase the related notes.
The purchase price payable will be equal to 100% of the principal amount
of the notes to be purchased plus any accrued and unpaid interest, including any
additional amounts, to, but excluding, the purchase date.
We may, at our option, elect to pay the purchase price in cash, shares of
common stock or any combination of cash and common stock.
On or before the 20th business day prior to each purchase date, we will
provide to the trustee, the paying agent and all holders of the notes at their
addresses shown in the register of the registrar, and to beneficial owners as
required by applicable law, a company notice together with a form of purchase
notice. Our company notice will state, among other things:
o the purchase price and the then applicable conversion rate;
o the name and address of the paying agent and the conversion agent;
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o that notes as to which a purchase notice has been given may be
converted only if the purchase notice is withdrawn in accordance
with the indenture;
o the procedures that holders must follow to require us to purchase
their notes;
o a brief description of the conversion rights of the notes;
o the procedures for withdrawing a purchase notice;
o whether we will pay the purchase price of notes in cash, shares of
common stock or any combination of cash and shares of common stock,
specifying the percentages of each; and
o if we elect to pay in shares of common stock, that the number of
shares of common stock to be issued will be equal to the purchase
price divided by the market price of our common stock (as defined in
this section below) and the method of calculating the market price.
In connection with providing such notice, we will publish a notice
containing this information in a newspaper of general circulation in The City of
New York or publish the information on our website or through such other public
medium as we may use at that time.
The purchase notice given by each holder electing to require us to
purchase notes must be given so as to be received by the paying agent no later
than the close of business on the third business day prior to the purchase date
and must state:
o the relevant purchase date;
o if certificated notes have been issued, the certificate numbers of
the notes to be purchased;
o the portion of the principal amount of notes to be purchased, in
integral multiples of $1,000;
o that the notes are to be purchased by us pursuant to the applicable
provisions of the notes and the indenture; and
o in the event we elect, pursuant to the notice that we are required
to give, to pay the purchase price in shares of common stock, in
whole or in part, but the purchase price is ultimately to be paid to
the holder entirely in cash because any of the conditions to payment
of the purchase price or portion of the purchase price in shares of
common stock is not satisfied prior to the close of business on the
purchase date, as described below, whether the holder elects:
(i) to withdraw the purchase notice as to some or all of the notes to
which it relates; or
(ii) to receive cash in such event in respect of the entire purchase
price for all notes or potions of notes subject to such purchase
notice.
If the holder fails to indicate its choice with respect to the election
described in the final bullet point above, the holder will be deemed to have
elected to receive cash in respect of the entire purchase price for all notes
subject to the purchase notice in these circumstances. For a discussion of the
United States federal income tax treatment of a holder receiving cash, shares of
common stock or any combination thereof, see "Certain United States Federal
Income Tax Considerations."
24
If the notes are not in certificated form, exercise of the purchase right
must comply with appropriate DTC procedures.
Holders may withdraw any purchase notice in whole or in part by a written
notice of withdrawal delivered to the paying agent prior to the close of
business on the business day prior to the purchase date. The notice of
withdrawal must state:
o the principal amount of the withdrawn notes;
o if certificated notes have been issued, the certificate numbers of
the withdrawn notes; and
o the principal amount, if any, which remains subject to the purchase
notice.
If the notes are not in certificated form, a withdrawal must comply with
appropriate DTC procedures.
If we elect to pay the purchase price, in whole or in part, in shares of
common stock, the number of shares of common stock to be delivered by us will be
equal to the portion of the purchase price to be paid in shares divided by the
market price of the common stock. The "market price" of the common stock means
the average last reported sale prices of our common stock for the five-day
trading period ending on the third trading day prior to the applicable purchase
date.
Because the market price of the common stock is determined prior to the
applicable purchase date, holders of notes bear the market risk with respect to
the value of the shares of common stock to be received from the date such market
price is determined to such purchase date.
Our right to purchase notes, in whole or in part, with common stock is
subject to various conditions, including:
o our providing timely written notice, as described above, of our
election to purchase all or part of the notes with common stock;
o our common stock then being listed on a national securities exchange
or quoted on the Nasdaq National Market;
o information necessary to calculate the market price of our common
stock then being published in a daily newspaper of national
circulation;
o our registration of the common stock under the Securities Act and
the Exchange Act, if required; and
o our obtaining any necessary qualification or registration under
applicable state securities law or the availability of an exemption
from such qualification and registration.
If these conditions are not satisfied with respect to a holder prior to
the close of business on the purchase date, we will pay the purchase price of
the notes entirely in cash. Except in this circumstance, we may not change the
form or components or percentages of components of consideration to be paid for
the notes once we have given the notice that we are required to give to holders
regarding purchase of the notes.
25
In connection with any purchase offer, we will:
o comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act which may then be
applicable; and
o file a Schedule TO, if required, or any other required schedule
under the Exchange Act.
Holders must either effect book-entry transfer or deliver the notes,
together with necessary endorsements, to the office of the paying agent after
delivery of the purchase notice to receive payment of the purchase price.
Holders will receive payment promptly following the later of the purchase date
or the time of book-entry transfer or the delivery of the notes. If the paying
agent holds money and/or shares of common stock, as applicable, sufficient to
pay the purchase price of the notes on the business day following the purchase
date, then:
o the purchased notes will cease to be outstanding and interest and
any additional amounts will cease to accrue (whether or not
book-entry transfer of the notes is made or whether or not the notes
are delivered to the paying agent); and
o all other rights of the holders of the purchased notes will
terminate (other than the right to receive the purchase price upon
delivery or transfer of the notes).
Our ability to purchase notes with cash may be limited by the terms of our
then existing borrowing agreements.
We may not purchase any notes at the option of holders (other than through
the issuance of shares of common stock and cash in lieu of fractional shares) if
there has occurred and is continuing an event of default with respect to the
notes other than a default in the payment of the purchase price with respect to
such notes.
Fundamental Change Permits Holders to Require Us to Purchase Notes
If a Fundamental Change (as defined below in this section) occurs at any
time, holders will have the right, at their option, to require us to purchase
any or all of their notes, or any portion of the principal amount thereof, that
is equal to $1,000 or an integral multiple of $1,000. We will pay the following
purchase prices expressed as a percentage of the principal amount of such notes
plus accrued and unpaid interest and additional amounts, if any, to but
excluding the Fundamental Change purchase date:
Period Purchase Price
- ------ --------------
Beginning on August 6, 2003 and ending on July 31, 105.0%
2008.............................................
August 1, 2008 and thereafter...................... 100.0%
Instead of paying the purchase price in cash, we may elect to pay the
purchase price in shares of our common stock, cash or a combination of common
stock and cash, at our option. If we elect to pay all or a portion of the
purchase price in shares of common stock, the shares of the common stock will be
valued at 98% of the market price (as defined above under "--Purchase of Notes
by Us at the Option of the Holders") of our common stock. However, we may not
pay the purchase price in shares of common stock or a combination of shares of
common stock and cash, unless we satisfy certain conditions prior to the
repurchase date as provided in the indenture including those described below.
26
A "Fundamental Change" will be deemed to have occurred at the time after
the notes are originally issued that any of the following occurs:
(i) a "person" or "group" within the meaning of Section 13(d) of the
Exchange Act other than us, our subsidiaries, our or their
employee benefit plans or permitted holders (as defined below),
files a Schedule 13D or Schedule TO (or any successor to those
schedules) disclosing that such person or group has become the
direct or indirect "beneficial owner," as defined in Rule 13d-3
under the Exchange Act, of 50% or more of the voting power of our
common stock and Class B common stock or other capital stock into
which our common stock or Class B common stock is reclassified or
changed;
(ii) permitted holders file a Schedule 13D or Schedule TO (or any
successors to those schedules) stating that they have become
beneficial owners of our voting stock representing more than 80%, in
the aggregate, of the voting power of our common stock and Class B
common stock or other capital stock into which our common stock or
Class B common stock is reclassified or changed, with certain
exceptions;
(iii) consummation of any share exchange, consolidation or merger of our
company pursuant to which our common stock and Class B common stock
will be converted into cash, securities or other property or any
sale, lease or other transfer in one transaction or a series of
transactions of all or substantially all of the consolidated assets
of us and our subsidiaries, taken as a whole, to any person other
than one of our subsidiaries; provided that a transaction where the
holders of such capital stock immediately prior to such transaction
own, directly or indirectly, more than 50% of aggregate voting power
of all classes of capital stock of the continuing or surviving
corporation or transferee entitled to vote generally in the election
of directors immediately after such event will not be a Fundamental
Change;
(iv) continuing directors (as defined below) cease to constitute at least
a majority of our board of directors;
(v) our stockholders approve any plan or proposal for the liquidation or
dissolution of the company; or
(vi) our common stock ceases to be listed on a national securities
exchange or quoted on the Nasdaq National Market or another
established automated over-the-counter trading market in the United
States.
A Fundamental Change will not be deemed to have occurred, however, if
either:
(i) the last reported sale price of our common stock for any five
trading days within the 10 consecutive trading days ending
immediately before the later of the Fundamental Change or the
announcement thereof, equals or exceeds 105% of the conversion price
of the notes in effect immediately before the later of Fundamental
Change or the public announcement thereof; or
(ii) at least 90% of the consideration, excluding cash payments for
fractional shares, in the transaction or transactions constituting
the Fundamental Change consists of shares of common stock traded on
a national securities exchange or quoted on the Nasdaq National
Market or which will be so traded or quoted when issued or exchanged
in connection with a Fundamental Change (these securities being
referred to as "publicly traded securities") and
27
as a result of this transaction or transactions the notes become
convertible into such publicly traded securities, excluding cash
payments for fractional shares.
"Permitted holders" means each of Dr. Felix Zandman or his wife, children
or lineal descendants, the Estate of Mrs. Luella B. Slaner or her children or
lineal descendants, any trust established for the benefit of such persons, or
any "person" (as such term is used in Section 13(d) or 14(d) of the Exchange
Act), directly or indirectly, controlling, controlled by or under common control
with any such person mentioned in this paragraph or any trust established for
the benefit of such persons or any charitable trust or non-profit entity
established by a permitted holder, or any group in which such permitted holders
hold more than a majority of the voting power of our common stock and Class B
common stock deemed to be beneficially owned by such group.
"Continuing director" means a director who either was a member of our
board of directors on July 31, 2003 or who becomes a director of the company
subsequent to that date and whose election, appointment or nomination for
election by our stockholders is duly approved by a majority of the continuing
directors on our board of directors at the time of such approval, either by a
specific vote or by approval of the proxy statement issued by us on behalf of
our entire board of directors in which such individual is named as nominee for
director.
On or before the 20th day after the occurrence of a Fundamental Change, we
will provide to all holders of the notes and the trustee and paying agent a
notice of the occurrence of the Fundamental Change together with a form of
purchase notice to be used by the holders exercising the purchase right. Our
Fundamental Change notice will state, among other things:
o the events causing a Fundamental Change;
o the date of the Fundamental Change;
o whether we will pay the Fundamental Change purchase price in cash,
common stock or a combination thereof, specifying the percentages of
each;
o the Fundamental Change purchase price;
o the termination date for the exercise of the purchase right;
o the Fundamental Change purchase date;
o the name and address of the paying agent and conversion agent;
o the conversion price and any adjustments to the conversion price;
o that the notes with respect to which a Fundamental Change purchase
notice has been given by the holder may be converted only if the
holder withdraws the Fundamental Change purchase notice in
accordance with the terms of the indenture;
o the procedures that holders must follow to require us to purchase
their notes; and
o if we elect to pay in common stock, that the number of shares of
common stock to be issued will be equal to the purchase price
divided by 98% of the market price of our common stock (as defined
above) and the method of calculating the market price.
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In connection with providing such notice, we will publish a notice
containing this information in a newspaper of general circulation in The City of
New York or publish the information on our website or through such other public
medium as we may use at that time.
To exercise the purchase right, holders must deliver the notes to be
purchased to the paying agent. If the notes are in certificated form, they must
be duly endorsed for transfer, together with a written purchase notice and the
form entitled "Form of Fundamental Change Purchase Notice" on the reverse side
of the notes duly completed. This delivery must be made on or before a date
specified as the termination date for exercise of the purchase right that is not
later than 35 business days from the date we mail the Fundamental Change Notice,
subject to extension to comply with applicable law. The purchase notice must
state:
o if the notes are certificated, the certificate numbers of the notes
to be delivered for purchase;
o the portion of the principal amount of notes to be purchased, which
must be $1,000 or an integral multiple thereof;
o that the notes are to be purchased by us pursuant to the applicable
provisions of the notes and the indenture; and
o in the event we elect, pursuant to the notice that we are required
to give, to pay the Fundamental Change purchase price in common
stock, in whole or in part, but the Fundamental Change purchase
price is ultimately to be paid to the holder entirely in cash
because any condition to payment of the Fundamental Change purchase
price or portion of the Fundamental Change purchase price in common
stock is not satisfied prior to the close of business on the
Fundamental Change purchase date, as described below, whether the
holder elects:
(1) to withdraw the purchase notice as to some or all of the notes
to which it relates; or
(2) to receive cash in respect of the entire Fundamental Change
purchase price for some or all of the notes subject to the
purchase notice.
If a holder fails to indicate its choice with respect to the election
described in the final bullet point above, it will be deemed to have elected to
receive cash in respect of the entire Fundamental Change purchase price for all
notes subject to the purchase notice in these circumstances. For a discussion of
the United States federal income tax treatment of a holder receiving cash,
shares of common stock or any combination thereof, see "Certain United States
Federal Income Tax Considerations."
If the notes are not in certificated form, exercise of the purchase right
must comply with appropriate DTC procedures.
A holder may withdraw any purchase notice (in whole or in part) by a
written notice of withdrawal delivered to the paying agent prior to the close of
business on the business day prior to the Fundamental Change purchase date. The
notice of withdrawal must state:
o the principal amount of the withdrawn notes;
o if certificated notes have been issued, the certificate numbers of
the withdrawn notes; and
o the principal amount, if any, which remains subject to the purchase
notice.
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If the notes are not in certificated form, a withdrawal must comply with
appropriate DTC procedures.
Holders that have exercised the purchase right will receive payment of the
Fundamental Change purchase price on a purchase date promptly following the
termination date for the exercise of the right. Holders must either effect
book-entry transfer or deliver the notes, together with necessary endorsements
to receive payment of the purchase price. If the paying agent holds money
sufficient to pay the Fundamental Change purchase price of the notes on the
purchase date, then:
o the purchased notes will cease to be outstanding and interest and
any additional amounts will cease to accrue (whether or not
book-entry transfer of the notes is made or whether or not the notes
are delivered to the paying agent); and
o all other rights of the holders of the purchased notes will
terminate (other than the right to receive the Fundamental Change
purchase price and previously accrued and unpaid interest including
any additional amounts upon delivery or transfer of the notes).
In connection with any purchase rights resulting from a Fundamental
Change, we will comply with all applicable provisions of the tender offer rules
under the Exchange Act, as described above.
The purchase rights of the holders could discourage a potential acquirer
of our company. The Fundamental Change purchase feature, however, is not the
result of management's knowledge of any specific effort to obtain control of our
company by any means or part of a plan by management to adopt a series of
anti-takeover provisions.
The term Fundamental Change is limited to specified transactions and may
not include other events that might adversely affect our financial condition. In
addition, the requirement that we offer to purchase the notes upon a Fundamental
Change may not protect holders in the event of a highly leveraged transaction,
reorganization, merger or similar transaction involving our company.
If we elect to pay the Fundamental Change purchase price, in whole or in
part, in shares of our common stock, we will pay cash for all fractional shares.
Because the market price of the common stock is determined prior to the
applicable Fundamental Change purchase date, holders will bear the market risk
with respect to the value of the common stock to be received from the date the
market price is determined to the Fundamental Change purchase dated.
Our right to purchase notes, in whole or in part, with common stock is
subject to various conditions, including:
o our providing timely written notice, as described above, of our
election to purchase all or part of the notes with common stock;
o our common stock then being listed on a national securities exchange
or quoted on the Nasdaq National Market;
o information necessary to calculate the market price of our common
stock then being listed is published in a daily newspaper of
national circulation;
o our registration of the common stock under the Securities Act and
the Exchange Act, if required; and
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o our obtaining any necessary qualification or registration under
applicable state securities law or the availability of an exemption
from such qualification and registration.
If those conditions are not satisfied with respect to a holder prior to
the close of business on the Fundamental Change purchase date, we will pay the
Fundamental Change purchase price of the notes entirely in cash. Except in this
circumstance, we may not change the form or components or percentages of
components of consideration to be paid for the notes once we have given the
notice that we are required to give to holders of notes.
Upon determination of the actual number of shares of our common stock to
be paid upon redemption of the notes, we will publish a notice containing this
information in a newspaper of general circulation in The City of New York or
publish the information on our website or through such other public medium as we
may use at that time.
The definition of Fundamental Change includes a phrase relating to the
conveyance, transfer, sale, lease or disposition of "all or substantially all"
of our consolidated assets. There is no precise, established definition of the
phrase "substantially all" under applicable law. Accordingly, the ability of a
holder of the notes to require us to purchase its notes as a result of the
conveyance, transfer, sale, lease or other disposition of less than all of our
assets may be uncertain.
No notes may be purchased at the option of holders (other than through the
issuance of shares of common stock and cash in lieu of fractional shares) upon a
Fundamental Change if there has occurred and is continuing an event of default
other than an event of default that is cured by the payment of the Fundamental
Change purchase price of the notes.
If a Fundamental Change were to occur, we may not have enough funds to pay
the Fundamental Change purchase price in cash. See "Risk Factors" under the
caption "We maybe unable to repay or repurchase the notes." If we fail to
purchase the notes when required following a Fundamental Change, we will be in
default under the indenture. Under our credit facility as currently in effect,
the occurrence of a Fundamental Change would be an event of default and allow
the lenders to accelerate the debt under that facility. This could result in an
event of default under the notes. See "--Events of Default and Remedies." In
addition, we have, and may in the future incur, other indebtedness with similar
change in control provisions permitting holders to accelerate or to require us
to purchase our indebtedness upon the occurrence of similar events or on some
specific dates.
Merger and Consolidation
The indenture provides that we may not consolidate or merge with or into,
or transfer, lease or convey all or substantially all of our properties or
assets to another corporation, person or entity unless, among other items:
o either we are the continuing corporation, or any successor or
purchaser is a corporation, partnership or trust organized under the
laws of the United States, any state thereof or the District of
Columbia and the successor or purchaser expressly assumes our
obligations on the notes under a supplemental indenture in a form
reasonably satisfactory to the trustee;
o in all cases, immediately after giving effect to the transaction, no
default or event of default, and no event that, after notice or
lapse of time or both, would become an event of default, will have
occurred and be continuing; and
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o we have delivered to the trustee an officers' certificate and an
opinion of counsel stating compliance with these provisions.
Upon any such consolidation, merger, conveyance, lease or transfer in
accordance with the foregoing, the successor person formed by such consolidation
or share exchange or into which we are merged or to which such sale, assignment,
conveyance, lease, transfer or other disposition is made will succeed to, and be
substituted for, and may exercise our right and power, under the indenture with
the same effect as if such successor had been named as the issuer in the
indenture, and thereafter (except in the case of a sale, assignment, transfer,
lease, conveyance or other disposition) the predecessor corporation will be
relieved of all further obligations and covenants under the indenture and the
notes.
Events of Default and Remedies
An event of default is defined in the indenture as being:
(i) a default in payment of the principal of the notes when due at
maturity, upon redemption, repurchase or otherwise;
(ii) a default for 30 days in payment of any installment of interest or
any additional amounts with respect to the notes;
(iii) a default for 10 days in our obligation to satisfy our conversion
obligation upon exercise of a holder's conversion right;
(iv) a failure to comply with or observe in any material respect any
other covenant or agreement in respect of the notes contained in the
indenture or the notes for 60 days after written notice to us by the
trustee or to us and the trustee by holders of at least 25% in
aggregate principal amount of the notes then outstanding;
(v) a default under any credit agreement, mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by us or
any of our material subsidiaries, which default:
o is caused by a failure to pay when due any principal on such
indebtedness at the final stated maturity date of such
indebtedness, which failure continues beyond any applicable
grace period, or
o results in the acceleration of such indebtedness prior to its
express maturity, without such acceleration being rescinded or
annulled,
and, in each case, the principal amount of such indebtedness,
together with the principal amount of any other such indebtedness
under which there is a payment default at the final stated maturity
thereof or the maturity of which has been so accelerated, aggregates
to $25 million or more and such payment default is not cured or such
acceleration is not annulled within 30 days after written notice to
us by the trustee or to us and the trustee by holders of at least
25% in aggregate principal amount of the notes then outstanding; or
(vi) certain events of bankruptcy, insolvency or reorganization affecting
us or our material subsidiaries.
A "material subsidiary" means a subsidiary of ours, including such
subsidiary's subsidiaries, which meets any of the following conditions:
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o our and our subsidiaries' investments in and advances to such
subsidiary exceed 5% of our total assets and the total assets of our
subsidiaries consolidated as of the end of the most recently
completed fiscal year; or
o our and our subsidiaries' proportionate share of the total assets
(after intercompany eliminations) of such subsidiary exceeds 5% of
our total assets and the total assets of our subsidiaries
consolidated as of the end of the most recently completed fiscal
year; or
o our and our subsidiaries' equity in the income from continuing
operations before income taxes, extraordinary items and cumulative
effect of a change in accounting principle of such subsidiary
exceeds 5% of our income and the income of our subsidiaries before
such items consolidated as of the end of the most recently completed
fiscal year.
If an event of default (other than an event of default specified in clause
(vi) above) occurs and is continuing, then and in every such case the trustee,
by written notice to us, or the holders of not less than 25% in aggregate
principal amount of the notes then outstanding, by written notice to us and the
trustee, may declare the unpaid principal of, and accrued and unpaid interest,
including accrued and unpaid additional amounts, if any, on all the notes then
outstanding to be due and payable. Upon such declaration, such principal amount
and accrued and unpaid interest, including any accrued and unpaid additional
amounts, will become immediately due and payable, notwithstanding anything
contained in the indenture or the notes to the contrary. If any event of default
specified in clause (vi) above occurs, all unpaid principal of and accrued and
unpaid interest, including any additional amounts, on the notes then outstanding
will automatically become due and payable without any declaration or other act
on the part of the trustee or any holder of notes.
Holders of the notes may not enforce the indenture or the notes except as
provided in the indenture. Subject to the provisions of the indenture relating
to the duties of the trustee, the trustee is under no obligation to exercise any
of its rights or powers under the indenture at the request, order or direction
of any of the holders, unless such holders have offered to the trustee a
security or an indemnity satisfactory to it against any cost, expense or
liability. Subject to all provisions of the indenture and applicable law, the
holders of a majority in aggregate principal amount of the notes then
outstanding have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the trustee or exercising any trust
or power conferred on the trustee. If a default or event of default occurs and
is continuing and is known to the trustee, the indenture requires the trustee to
mail a notice of default or event of default to each holder within 90 days of
the occurrence of such default or event of default. However, the trustee may
withhold from the holders notice of any continuing default or event of default
(except a default or event of default in the payment of principal, interest or
additional amounts, if any, or redemption price, purchase price or Fundamental
Change purchase price, if applicable, on the notes) if it determines in good
faith that withholding notice is in their interest. The holders of a majority in
aggregate principal amount of the notes then outstanding by written notice to
the trustee may rescind any acceleration of the notes and its consequences if
all existing events of default (other than the nonpayment of principal of and
interest or any additional amounts, on the notes that have become due solely by
virtue of such acceleration) have been cured or waived and if the rescission
would not conflict with any judgment or decree of any court of competent
jurisdiction. No such rescission will affect any subsequent default or event of
default or impair any right consequent thereto.
A holder of notes may pursue any remedy under the indenture only if:
o the holder gives the trustee written notice of a continuing event of
default on the notes;
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o the holder of at least 25% in aggregate principal amount of the
notes then outstanding makes a written request to the trustee to
pursue the remedy;
o the holder offers to the trustee indemnity reasonably satisfactory
to the trustee;
o the trustee fails to act for a period of 60 days after the receipt
of notice and offer of indemnity; and
o during that 60-day period, the holders of a majority in principal
amount of the notes then outstanding do not give the trustee a
direction inconsistent with the request.
This provision does not, however, affect the right of a holder of notes to
sue for enforcement of the payment of the principal, interest or additional
amounts, if any, or redemption price, purchase price or Fundamental Change
purchase price, if applicable, of or on the holder's note on or after the
respective due dates expressed in its note or the holder's right to convert its
note in accordance with the indenture.
The holders of no less than a majority in aggregate principal amount of
the notes then outstanding may, on behalf of the holders of all the notes, waive
any past default or event of default under the indenture and its consequences,
except default in the payment of principal or interest, including any additional
amounts, on the notes (other than the nonpayment of principal, interest or
additional amounts on the notes that have become due solely by virtue of an
acceleration that has been duly rescinded as provided above) or in respect of a
covenant or provision of the indenture that cannot be modified or amended
without the consent of all holders of notes then outstanding.
We are required to deliver to the trustee annually a statement regarding
compliance with the indenture, and we are required, upon becoming aware of any
default or event of default, to deliver to the trustee a statement specifying
such default or event of default.
Amendment, Supplement and Waiver
Except as provided in the next two succeeding paragraphs, the indenture
may be amended or supplemented with the consent of the holders of at least a
majority in aggregate principal amount of the notes then outstanding (including
consents obtained in connection with a tender offer or exchange offer for
notes), and any existing default or compliance with any provision of the
indenture or the notes may be waived with the consent of the holders of a
majority in principal amount of the notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for notes).
Without the consent of each holder affected, an amendment or waiver may
not (with respect to any notes held by a non-consenting holder):
o reduce the principal amount of notes whose holders must consent to
an amendment, supplement or waiver;
o reduce the principal of or change the fixed maturity of any note or,
other than as set forth in the paragraph below, alter the provisions
with respect to the redemption or repurchase of the notes;
o reduce the rate or amount of or change the time for payment of
interest (including defaulted interest) and additional amounts, if
any, redemption price, purchase price or Fundamental Change purchase
price, if applicable, of or on any notes;
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o waive a default or event of default in the payment of principal of,
or interest or additional amounts, if any, on the notes (except a
rescission of acceleration of the notes by the holders of at least a
majority in aggregate principal amount of the notes then outstanding
and a waiver of the payment default that resulted from such
acceleration);
o make any note payable in money other than that stated in the
indenture and the notes;
o make any change in the provisions of the indenture relating to
waivers of past defaults or the rights of holders of notes to
receive payments of principal, interest or additional amounts, if
any, redemption price, purchase price or Fundamental Change purchase
price, if applicable, of or on the notes;
o waive a Fundamental Change payment with respect to any note;
o increase the conversion price or, except as permitted by the
indenture, modify the provisions of the indenture relating to
conversion of the notes in a manner adverse to the holders; or
o impair the right to institute suit for the enforcement of any
payment with respect to, or conversion of, the notes under the
indenture or the foregoing provisions or this paragraph.
Notwithstanding the foregoing, without the consent of any holder of notes,
we and the trustee may amend or supplement the indenture or the notes to:
o cure any ambiguity, defect or inconsistency or make any other
changes in the provisions of the indenture which we and the trustee
may deem necessary or desirable, provided such amendment does not
materially and adversely affect rights of the holders of the notes
under the indenture;
o provide for the assumption of our obligations to holders of notes in
the circumstances required under the indenture as described under
"--Merger and Consolidation;"
o provide for conversion rights of holders of notes in certain events
such as our consolidation or merger or the sale of all or
substantially all of our assets;
o make appropriate modifications to the provisions of the indenture
regarding the purchase of notes upon the occurrence of a Fundamental
Change, in the event of our consolidation or merger or the sale of
all or substantially all our assets;
o reduce the conversion price;
o evidence and provide for the acceptance of the appointment under the
indenture of a successor trustee;
o make any change that would provide any additional rights or benefits
to the holders of notes or that does not adversely affect the legal
rights under the indenture of any such holder;
o comply with requirements of the SEC in order to effect or maintain
the qualification of the indenture under the Trust Indenture Act of
1939; or
35
o modify the restrictions on, and procedures for, resale and other
transfers of the notes or shares of common stock issuable upon
conversion of the notes pursuant to law, regulation or practice
relating to the resale or transfer of restricted securities
generally.
Subordination of Notes
Payment on the notes will, to the extent provided in the indenture, be
subordinated in right of payment to the prior payment in full of all of our
existing and future senior indebtedness.
Upon any distribution of our assets upon any dissolution, winding up,
liquidation or reorganization, the payment of the principal of, or premium, if
any, interest, including additional amounts, if any, on the notes will be
subordinated in right of payment to the prior payment in full in cash or other
payment satisfactory to the holders of senior indebtedness of all senior
indebtedness. In the event of any acceleration of the notes because of an event
of default, the holders of any outstanding senior indebtedness would be entitled
to payment in full in cash or other payment satisfactory to the holders of
senior indebtedness of all senior indebtedness obligations before the holders of
the notes are entitled to receive any payment or distribution.
We may not make any payment on the notes if:
o a default in the payment of senior indebtedness (referred to as a
"payment default") occurs and is continuing beyond any applicable
period of grace; or
o a default other than a payment default on any senior indebtedness
(referred to as a "non-payment default") occurs and is continuing
that permits holders of senior indebtedness to accelerate its
maturity, or in the case of a lease, a default occurs and is
continuing that permits the lessor to either terminate the lease or
require us to make an irrevocable offer to terminate the lease
following an event of default under the lease, and the trustee
receives a notice of such default (referred to as a "payment
blockage notice") from us or any other person permitted to give such
notice under the instrument evidencing or document governing such
senior indebtedness.
We may resume payments and distributions on the notes:
o in case of a payment default, upon the date on which such default is
cured or waived or ceases to exist; and
o in case of an non-payment default, the earlier of the date on which
such nonpayment default is cured or waived or ceases to exist or 179
days after the date on which the payment blockage notice is
received, if the maturity of the senior indebtedness has not been
accelerated, or in the case of any lease, 179 days after the notice
is received if we have not received notice that the lessor under
such lease has exercised its right to terminate the lease or require
us to make an irrevocable offer to terminate the lease following the
event of default under the lease.
No new period of payment blockage may be commenced pursuant to a payment
blockage notice unless nine months have elapsed since the initial effectiveness
of the immediately prior payment blockage notice. No non-payment default that
existed or was continuing on the date of delivery of any payment blockage notice
shall be the basis for any later payment blockage notice.
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If the trustee or any holder of the notes receives any payment or
distribution of our assets in contravention of the subordination provisions on
the notes before all senior indebtedness is paid in full in cash or other
payment satisfactory to holders of senior indebtedness, then such payment or
distribution will be held in trust for the benefit of holders of senior
indebtedness or their representatives to the extent necessary to make payment in
full in cash or payment satisfactory to the holders of senior indebtedness of
all unpaid senior indebtedness.
Because of the subordination provisions discussed above, in the event of
our bankruptcy, dissolution or reorganization, holders of senior indebtedness
may receive more ratably, and holders of the notes may receive less, ratably,
than our other creditors. This subordination will not prevent the occurrence of
any event of default under the indenture.
The term "senior indebtedness" means, the principal, premium (if any) and
unpaid interest on all of our present and future:
(i) indebtedness for borrowed money;
(ii) obligations evidenced by securities, bonds, debentures, notes or
similar instruments;
(iii) obligations under (a) interest rate swaps, caps, collars, options,
and similar arrangements, (b) any foreign exchange contract,
currency swap contract, futures contract, currency option contract,
or other foreign currency hedge or any other hedging agreements and
(c) credit swaps, caps, floors, collars, and similar arrangements;
(iv) indebtedness incurred, assumed or guaranteed by us in connection
with the acquisition by us or any of our subsidiaries of any
business, properties or assets;
(v) our capital, operating or other lease obligations or liabilities;
(vi) reimbursement obligations in respect of letters of credit, banker's
acceptances, security purchase facilities or similar credit
transactions relating to indebtedness or other obligations that
qualify as indebtedness or obligations of the kind referred to in
clauses (i) through (v) above;
(vii) pension plan obligations; and
(viii) obligations under direct or indirect guarantees or on which we are
liable as obligor, surety or otherwise in respect of, and
obligations to purchase or otherwise acquire, or otherwise to assure
a creditor against loss in respect of, indebtedness or obligations
of others of the kinds referred to in clauses (i) through (vii)
above;
in each case unless in the instrument creating or evidencing the indebtedness or
obligation or pursuant to which the same is outstanding it is provided that such
indebtedness or obligation is subordinate to or ranks pari passu in right of
payment to the notes. The notes rank pari passu in right of payment to our
outstanding Liquid Yield Option(TM) Notes (LYONs) due 2021.
As of September 30, 2003, we had $336 million of indebtedness outstanding
other than the notes, $105 million of which were senior to the notes. The notes
are also effectively subordinated in right of payment to all debt and other
liabilities, including trade payables and other accrued liabilities, of all of
our subsidiaries. Any right of ours to participate in any distribution of the
assets of any of our subsidiaries upon liquidation, reorganization or insolvency
of such subsidiary (and the consequent right of the holders of the notes to
participate in those assets) will be subject to the claims of the creditors
(including trade creditors) of
37
such subsidiary, except to the extent that our claims as a creditor of such
subsidiary may be recognized in which case our claims would still be subordinate
to any security interest in the assets of such subsidiary and any indebtedness
of such subsidiary senior to the indebtedness held by us. As of September 30,
2003, our subsidiaries had approximately $1,381 million of liabilities
outstanding which would effectively rank senior to the notes.
We are obligated to pay reasonable compensation to the trustee and to
indemnify the trustee against certain losses, liabilities or expenses incurred
by the trustee in connection with its duties relating to the notes. The
trustee's claims for these payments will generally be senior to those of the
holders of the notes in respect of all funds collected or held by the trustee.
Discharge of the Indenture
We may satisfy and discharge our obligations under the indenture by
delivering to the trustee for cancellation all outstanding notes or by
depositing with the trustee, the paying agent or the conversion agent, if
applicable, after all of the notes have become due and payable, whether at
stated maturity or any redemption date, or any purchase date, or a Fundamental
Change purchase date, or upon conversion or otherwise, cash or shares of common
stock (as applicable under the terms of the indenture) sufficient to pay all of
the outstanding notes and paying all other sums payable under the indenture.
Governing Law
The indenture provides that the notes will be governed by, and construed
in accordance with, the laws of the State of New York.
Form, Exchange, Registration and Transfer
The notes have been issued in fully registered form, without interest
coupons, in denominations of $1,000 principal amount and integral multiples
thereof. We will not charge a service fee for any registration of transfer or
exchange of the notes. We may, however, require the payment of any tax or other
governmental charge payable for that registration.
If the notes become certificated, the notes will be exchangeable for other
notes, for the same total principal amount and for the same terms but in
different authorized denominations, in accordance with the indenture. Also,
holders may present certificated notes for registration of transfer at the
office of the security registrar or any transfer agent we designate. The
security registrar or transfer agent will effect the transfer or exchange when
it is satisfied with the documents of title and identity of the person making
the request.
We have appointed the trustee as security registrar for the notes. We may
at any time rescind that designation or approve a change in the location through
which any such security registrar acts. We are required to maintain an office or
agency for transfer and exchanges in each place of payment. We may at any time
designate additional registrars for the notes.
The registered holder of a note will be treated as the owner of it for all
purposes.
Book-Entry; Global Notes
Except as provided below, the notes are and will be evidenced by one or
more global notes.
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We have deposited the global note or notes with DTC and registered the
notes in the name of Cede & Co. as DTC's nominee. Except as set forth below, a
note may be transferred, in whole or in part, only to another nominee of DTC or
to a successor of DTC or its nominee.
Holders may hold their interests in a note directly through DTC if such
holder is a participant in DTC, or indirectly through organizations that are
participants in DTC (referred to as "participants"). Transfers between
participants will be effected in the ordinary way in accordance with DTC rules
and will be settled in clearing house funds. The laws of some states require
that certain persons take physical delivery of securities in definitive form. As
a result, the ability to transfer beneficial interests in the note to such
persons may be limited.
Holders who are not participants may beneficially own interests in a note
held by DTC only through participants, or certain banks, brokers, dealers, trust
companies and other parties that clear through or maintain a custodial
relationship with a participant, either directly or indirectly (referred to as
"indirect participants").
So long as Cede & Co., as the nominee of DTC, is the registered owner of a
note, Cede & Co. for all purposes will be considered the sole holder of such
note. Except as provided below, owners of beneficial interests in a note are:
o not entitled to have certificates registered in their names;
o not entitled to receive physical delivery of certificates in
definitive registered form; and
o not considered holders of the note.
We will pay interest on and principal, redemption price, purchase price or
Fundamental Change purchase price of a note to Cede & Co., as the registered
owner of the note, by wire transfer of immediately available funds on each
interest payment date or at maturity or on any redemption date, purchase date or
Fundamental Change purchase date, as the case may be. Neither we, the trustee
nor any paying agent will be responsible or liable:
o for the records relating to, or payments made on account of,
beneficial ownership interests in a note; or
o for maintaining, supervising or reviewing any records relating to
the beneficial ownership interests.
We have been informed that DTC's practice is to credit participants'
accounts on a payment date with payments in amounts proportionate to their
respective beneficial interests in the principal amount represented by a global
note as shown in the records of DTC, unless DTC has reason to believe that it
will not receive payment on that payment date. Payments by participants to
owners of beneficial interests in the principal amount represented by a global
note held through participants is the responsibility of the participants, as is
the case with securities held for the accounts of customers registered in
"street name."
Because DTC can only act on behalf of participants, who in turn act on
behalf of indirect participants, the ability of a person having a beneficial
interest in the principal amount represented by the global note to pledge such
interest to persons or entities that do not participate in the DTC system, or
otherwise take actions in respect of such interest, may be affected by the lack
of a physical certificate evidencing its interest.
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Neither we, the trustee, registrar, paying agent nor conversion agent will
have any responsibility for the performance by DTC or its participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations. DTC has advised us that it will take any
action permitted to be taken by a holder of notes, including the presentation of
notes for exchange, only at the direction of one or more participants to whose
account with DTC interests in the note are credited, and only in respect of the
principal amount of the notes represented by the note as to which the
participant or participants has or have given such direction.
DTC has advised us that it is:
o a limited purpose trust company organized under the laws of the
State of New York, and a member of the Federal Reserve System;
o a "clearing corporation" within the meaning of the Uniform
Commercial Code; and
o a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act.
DTC was created to hold securities for its participants and to facilitate
the clearance and settlement of securities transactions between participants
through electronic book-entry changes to the accounts of its participants.
Participants include securities brokers, dealers, banks, trust companies and
clearing corporations and other organizations. Some of the participants or their
representatives, together with other entities, own DTC. Indirect access to the
DTC system is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
DTC has agreed to the foregoing procedures to facilitate transfers of
interests in a note among participants. However, DTC is under no obligation to
perform or continue to perform these procedures, and may discontinue these
procedures at any time. If DTC is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by us within 90 days, we
will issue notes in certificated form in exchange for interests in the global
notes.
Registration Rights
We entered into a registration rights agreement with the initial
purchasers dated as of the date of the first issuance of the notes. Pursuant to
the registration rights agreement, we agreed for the benefit of the holders of
the notes and common stock issuable upon conversion thereof that:
o we will, at our cost, within 90 days after the date of initial
issuance of the notes, file a shelf registration statement with the
SEC with respect to resales of the notes and the common stock
issuable upon their conversion;
o we will use our reasonable best efforts to cause such shelf
registration statement to be declared effective under the Securities
Act within 180 days after the date of the initial issuance of the
notes; and
o we will use our reasonable best efforts to keep the shelf
registration statement continuously effective under the Securities
Act until the earliest of (i) the expiration of the holding period
applicable to sales of the notes and the common stock issuable upon
conversion of the notes under Rule 144(k) (or any successor
provision) under the Securities Act; (ii) the date as of which all
the notes or the common stock issuable upon their conversion have
been transferred
40
under Rule 144 under the Securities Act (or any similar provision
then in force); and (iii) the date as of which all the notes or the
common stock issuable upon their conversion have been sold pursuant
to the shelf registration statement.
If the shelf registration statement:
o is not filed with the SEC on or prior to 90 days after the date of
the initial issuance of the notes, or has not been declared
effective by the SEC within 180 days after the date of the initial
issuance of the notes; or
o is filed and declared effective but shall thereafter cease to be
effective (without being succeeded immediately by a replacement
shelf registration statement filed and declared effective) or usable
for the offer and sale of transfer restricted securities for a
period of time (including any suspension period) which exceeds 45
days in the aggregate in any three-month period or 120 days in the
aggregate in any 12-month period during the period beginning on the
effective date of the shelf registration statement and ending on or
prior to the expiration of the holding period applicable to sales of
the notes and the common stock issuable upon conversion of the notes
under Rule 144(k) (or any successor provision) under the Securities
Act
(both of which are referred to as a "registration default"), we will pay
additional amounts to each holder of transfer restricted securities which has
complied with its obligations under the registration rights agreement.
The amount of additional amounts payable during any period in which a
registration default has occurred and is continuing is that amount which is
equal to:
o 0.25 percent or (25 basis points) per annum per $1,000 principal
amount of notes or $2.50 per annum per 46.9925 shares of our common
stock (subject to adjustment in the event of a stock split, stock
recombination, stock dividend and the like) constituting transfer
restricted securities, for the period up to and including the 90th
day during which such registration default has occurred and is
continuing; and
o 0.50 (or 50 basis points) per annum per $1,000 principal amount of
notes or $5.00 per annum per 46.9925 shares of our common stock
(subject to adjustment in the event of a stock split, stock
recombination, stock dividend and the like) constituting transfer
restricted securities, for the period including and subsequent to
the 91st day during which such registration default has occurred and
is continuing,
in each case based upon the number of days that such registration default is
continuing.
We have agreed to pay all accrued additional amounts, if any, on February
1 and August 1 of each year, to the person in whose name a note is registered at
the close of business on the relevant record date, in accordance with the terms
of the registration rights agreement. Following the cure of a registration
default, additional amounts will cease to accrue with respect to such
registration default.
"Transfer restricted securities" means each note and any share of our
common stock issued on conversion thereof until the earliest of the date on
which such note or share, as the case may be:
o has been transferred pursuant to a registration statement covering
such note or share which has been filed with the SEC pursuant to the
Securities Act, in either case after such
41
registration statement has become, and while such registration
statement is, effective under the Securities Act;
o has been transferred pursuant to Rule 144 under the Securities Act
(or any similar provision then in force); or
o may be sold or transferred pursuant to paragraph (k) of Rule 144
under the Securities Act (or any successor provision promulgated by
the SEC).
We will provide or cause to be provided to each holder of the notes or our
common stock issuable upon conversion of such notes that has delivered to us a
completed notice and questionnaire, as described below, copies of the
prospectus, which forms a part of the shelf registration statement. We will also
notify or cause to be notified each such holder when the shelf registration
statement for the notes or our common stock issuable upon conversion of such
notes has become effective and take certain other actions as are required to
permit unrestricted resales of the notes or our common stock issuable upon
conversion of such notes. A holder of notes or our common stock issuable upon
conversion of such notes that sells such securities pursuant to a shelf
registration statement:
o is required to be named as a selling securityholder in the
prospectus related to the shelf registration statement and to
deliver a prospectus to purchasers;
o is subject to certain of the civil liability provisions under the
Securities Act in connection with such sales; and
o is bound by the provisions of the registration rights agreement that
are applicable to such holder (including certain indemnification and
contribution rights or obligations).
We are permitted to suspend the use of the prospectus which is a part of
the shelf registration statement for a period not to exceed either 45 days in
the aggregate in any three-month period or 120 days in the aggregate during any
twelve-month period under certain circumstances including the acquisition or
divestiture of assets, pending corporate developments, public filings with the
SEC and similar events. We are required to pay all expenses of the shelf
registration statement; however, each holder is required to bear the expense of
any broker's commission, agency fee or underwriter's discount or commission.
This prospectus and the registration statement of which it forms a part
are being prepared and filed with the SEC in order to satisfy our obligations
under the registration rights agreement.
DESCRIPTION OF CAPITAL STOCK
The aggregate number of shares of capital stock which we have authority to
issue is 341,000,000 shares: 1,000,000 shares of preferred stock, par value
$1.00 per share, 300,000,000 shares of common stock, par value $0.10 per share,
and 40,000,000 shares of Class B common stock, par value $0.10 per share. No
shares of preferred stock have been issued. At September 30, 2003, there were
144,329,990 shares of common stock and 15,382,000 shares of Class B common stock
outstanding.
Common Stock
After any required payment on shares of preferred stock, holders of common
stock and Class B common stock are entitled to receive, and share ratably on a
per share basis in, all dividends and other distributions declared by our board
of directors. In the event of a stock dividend or stock split, holders of common
stock will receive shares of common stock and holders of Class B common stock
will receive
42
shares of Class B common stock. Neither the common stock nor the Class B common
stock may be split, divided or combined unless the other is split, divided or
combined equally.
The holders of common stock are entitled to one vote for each share held.
Holders of Class B common stock are entitled to 10 votes for each share held.
The common stock and the Class B common stock vote together as one class on all
matters subject to stockholder approval, except as set forth in the following
sentence. The approval of the holders of common stock and of Class B common
stock, each voting separately as a class, is required to authorize issuances of
additional shares of Class B common stock other than in connection with stock
splits and stock dividends.
Shares of Class B common stock are convertible into shares of common stock
on a one-for-one basis at any time at the option of the holder thereof. The
Class B common stock is not transferable except to the holder's spouse, certain
of such holder's relatives, certain trusts established for the benefit of the
holder, the holder's spouse or relatives, corporations and partnerships
beneficially owned and controlled by such holder, such holder's spouse or
relatives, charitable organizations and such holder's estate. Upon any transfer
made in violation of those restrictions, shares of Class B common stock will be
automatically converted into shares of common stock on a one-for-one basis.
Neither the holders of common stock nor the holders of Class B common
stock have any preemptive rights to subscribe for additional shares of our
capital stock.
Our common stock is listed on the NYSE. There is no public market for
shares of our Class B common stock. All outstanding shares of common stock and
Class B common stock are, and upon conversion, the shares of common stock
issuable upon conversion of the notes will be, validly issued, fully paid and
non-assessable.
Preferred Stock
Our board of directors is authorized, without further stockholder
approval, to issue from time to time up to an aggregate of 1,000,000 shares of
preferred stock in one or more series. The board of directors may fix or alter
the designation, preferences, rights and any qualification, limitations
restrictions of the shares of any series, including the dividend rights,
dividend rates, conversion rights, voting rights, redemption terms and prices,
liquidation preferences and the number of shares constituting any series. No
shares of our preferred stock are currently outstanding.
Other Matters
We have a staggered board of directors, with one third of the board being
elected each year. As a consequence, directors may not be removed other than for
cause.
We are subject to Section 203 of the Delaware General Corporation Law
which prohibits us from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. Generally, an "interested
stockholder" is a person who, together with affiliates and associates, owns or
within three years did own, 15% or more of our voting stock.
We furnish to our stockholders annual reports containing financial
statements certified by an independent public accounting firm.
American Stock Transfer & Trust Company is the transfer agent and
registrar of our common stock and Class B common stock.
43
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
The following is a discussion of certain U.S. federal income and, with
respect to non-U.S. holders (as defined below), estate tax considerations to a
holder of a note with respect to the purchase, ownership and disposition of the
notes and, with respect to non-U.S. holders, of our common stock issuable upon
conversion or repurchase of a note. This summary is generally limited to holders
that hold the notes as "capital assets" (generally, property held for
investment) for U.S. federal income tax purposes. This discussion does not
describe all of the U.S. federal tax consequences that may be relevant to a
holder in light of its particular circumstances or to holders subject to special
rules, such as tax-exempt organizations, holders subject to the U.S. federal
alternative minimum tax, dealers in securities, financial institutions,
insurance companies, regulated investment companies, certain former citizens or
former long-term residents of the United States, partnerships or other
pass-through entities, U.S. holders (as defined below) whose "functional
currency" is not the U.S. dollar and persons that hold the notes in connection
with a "straddle," "hedging," "conversion" or other risk reduction transaction.
The U.S. federal income and estate tax considerations set forth below are
based upon the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations promulgated thereunder, court decisions, and rulings and
pronouncements of the Internal Revenue Service, referred to as the "IRS," now in
effect, all of which are subject to change. Prospective investors should
particularly note that any such change could have retroactive application so as
to result in U.S. federal income and estate tax consequences different from
those discussed below. We have not sought any ruling from the IRS with respect
to statements made and conclusions reached in this discussion and there can be
no assurance that the IRS will agree with such statements and conclusions.
As used herein, the term "U.S. holder" means a beneficial owner of a note
that is for U.S. federal income tax purposes:
o an individual who is a citizen or resident of the United States;
o a corporation, or other entity taxable as a corporation for U.S.
federal income tax purposes, created or organized in or under the
laws of the United States, any state thereof or the District of
Columbia;
o an estate, the income of which is subject to U.S. federal income
taxation regardless of its source; or
o a trust, if a court within the United States is able to exercise
primary jurisdiction over its administration and one or more U.S.
persons have authority to control all of its substantial decisions,
or if the trust has a valid election in effect under applicable
Treasury regulations to be treated as a U.S. person.
As used herein, the term "non-U.S. holder" means a beneficial owner of
a note that is not a U.S. holder.
If a partnership is a beneficial owner of a note, the tax treatment of a
partner in the partnership will depend upon the status of the partner and the
activities of the partnership. A beneficial owner that is a partnership and
partners in such a partnership should consult their tax advisors about the U.S.
federal income tax consequences of the purchase, ownership and disposition of
the notes. This discussion does not address the tax consequences arising under
any state, local or foreign law. In addition, this summary does not consider the
effect of the U.S. federal estate or gift tax laws except as set forth below
with respect to certain U.S. federal estate tax consequences to non-U.S.
holders.
44
Investors considering the purchase of the securities should consult their
own tax advisors with respect to the application of the U.S. federal income tax
laws to their particular situations as well as any tax consequences arising
under the U.S. federal estate or gift tax laws or under the laws of any state,
local or foreign taxing jurisdiction or under any applicable tax treaty.
U.S. Holders
Payments of interest
A U.S. holder will be required to recognize as ordinary income any
interest paid or accrued on the notes (including any interest deemed paid in our
common stock upon conversion or repurchase), in accordance with the holder's
regular method of tax accounting.
Sale, exchange, conversion, repurchase or redemption of notes
A U.S. holder generally should not recognize income, gain or loss upon
conversion of the notes solely into our common stock or the use by us solely of
our common stock to repurchase the notes (in case the holder requires us to
repurchase the notes on a purchase date or upon a Fundamental Change), except
with respect to any amounts received which are attributable to accrued interest
(which will be treated as such) or cash received in lieu of fractional shares.
The U.S. holder's tax basis in the common stock received on conversion or
repurchase should be the same as the holder's adjusted tax basis in the notes
exchanged therefor at the time of conversion (reduced by any tax basis allocable
to a fractional share), and the holding period for the common stock received on
conversion or repurchase should include the holding period of the notes that
were converted or repurchased. However, a U.S. holder's tax basis in common
stock attributable to accrued and unpaid interest should be equal to the amount
of such accrued and unpaid interest and the holding period for common stock
attributable to accrued and unpaid interest will begin on the day following the
date of conversion or repurchase. Cash received in lieu of a fractional share of
common stock upon conversion or repurchase of the notes will generally be
treated as a payment in exchange for the fractional share of common stock.
Accordingly, the receipt of cash in lieu of a fractional share of common stock
generally will result in capital gain (subject to the market discount
provisions, as discussed below) or loss measured by the difference between the
cash received for the fractional share and the holder's adjusted tax basis in
the fractional share and will be long-term capital gain or loss if the holder
held the note for more than one year at the time of such conversion or
repurchase.
If a U.S. holder converts a note and we choose to deliver a combination of
cash and shares of our common stock or a U.S. holder elects to exercise such
holder's right to require us to repurchase a note on a purchase date or upon a
Fundamental Change and we satisfy the purchase price in a combination of cash
and shares of our common stock, the U.S. holder should recognize gain (but not
loss) in an amount equal to the lesser of (i) the excess of the amount of cash
plus the fair market value of stock received over the holder's adjusted tax
basis in the note and (ii) the amount of cash received, in each case excluding
amounts attributable to accrued interest (which will be treated as such) or cash
received in lieu of a fractional share (which will be taxable as described
above). Such gain will generally be a capital gain (subject to the market
discount provisions, as discussed below), and will be long-term capital gain if
the converted or repurchased note is held for more than one year. A U.S.
holder's tax basis in the common stock received from us in exchange for the note
upon such a conversion or repurchase by us should be the same as the U.S.
holder's tax basis in the note less any basis allocable to a fractional share.
However, this basis should be decreased by the amount of cash, other than cash
received in lieu of accrued and unpaid interest or a fractional share, if any,
received in exchange and increased by the amount of any gain recognized by the
U.S. holder on the exchange, other than gain with respect to a fractional share,
as described above. The holding period for common stock received upon such a
conversion or repurchase by us should include the holding period for
45
the note so converted or repurchased. However, the holding period for common
stock attributable to accrued and unpaid interest will begin on the day
following the date of conversion or repurchase.
If a U.S. holder converts a note and we choose to deliver solely cash, in
lieu of shares of our common stock, or if a U.S. holder elects to exercise such
holder's right to require us to repurchase a note on a purchase date or upon a
Fundamental Change and we deliver solely cash in satisfaction of the purchase
price, the U.S. holder should recognize gain or loss measured by the difference
between the amount of cash received (other than cash received attributable to
accrued interest, which will be treated as such) and the U.S. holder's adjusted
tax basis in the note. Gain or loss recognized by the holder will generally be
capital gain or loss (subject to the market discount provisions, as discussed
below), and will be long-term capital gain or loss if the note is held for more
than one year. The deductibility of capital losses is subject to limitations.
A U.S. holder generally will recognize capital gain or loss upon a sale
(including a redemption of a note at our option), exchange, retirement at
maturity, or other disposition of a note. The U.S. holder's gain or loss will
equal the difference between the proceeds received by the holder (other than
proceeds attributable to accrued interest, which will be treated as such) and
the holder's adjusted tax basis in the note. The proceeds received by a U.S.
holder will include the amount of any cash and the fair market value of any
other property received for the note. Subject to the market discount provisions,
as discussed below, the gain or loss recognized by a U.S. holder on a
disposition of the note will be long-term capital gain or loss if the holder
held the note for more than one year. The deductibility of capital losses is
subject to limitations.
Market discount
If a U.S. holder purchases a note for an amount that is less than its
stated redemption price at maturity (which is its stated principal amount), the
amount of the difference will be treated as "market discount" for U.S. federal
income tax purposes, unless this difference is less than a specified de minimus
amount. Subject to a limited exception, the market discount provisions generally
require a U.S. holder who acquires a note at a market discount to treat as
ordinary income (i) any gain recognized on the disposition or retirement of that
note or (ii) any appreciation in the note in the event of a gift of the note, in
each case to the extent of the accrued market discount on that note at the time
of maturity, disposition or gift, unless the U.S. holder elects to include
accrued market discount in income over the life of the note.
This election to include market discount in income over the life of the
note, once made, applies to all market discount obligations acquired on or after
the first taxable year to which the election applies and may not be revoked
without the consent of the IRS. In general, market discount will be treated as
accruing on a straight-line basis over the remaining term of the note at the
time of acquisition, or, at the election of the U.S. holder, under a constant
yield method. If an election is made to accrue market discount under a constant
yield method, it will apply only to the note with respect to which it is made,
and may not be revoked. A U.S. holder who acquires a note at a market discount
and who does not elect to include accrued market discount in income over the
life of the note may be required to defer the deduction of a portion of the
interest on any indebtedness incurred or maintained to purchase or carry the
note until maturity or until the note is disposed of in a taxable transaction.
If a U.S. holder acquires a note with market discount and receives common stock
upon conversion or repurchase of the note, the amount of accrued market discount
not previously included in income with respect to the note through the date of
conversion or repurchase (or upon conversion or repurchase to the extent of any
cash received) will be treated as ordinary income when the holder disposes of
the common stock.
46
Amortizable premium
A U.S. holder who purchases a note at a premium over its stated principal
amount, plus accrued interest, generally may elect to amortize that premium from
the purchase date to the note's maturity date under a constant-yield method that
reflects semiannual compounding based on the note's payment period, with a
corresponding decrease in tax basis. Amortizable premium, however, will not
include any premium attributable to a note's conversion feature. The premium
attributable to the conversion feature is the excess, if any, of the note's
purchase price over what the note's fair market value would be if there were no
conversion feature. Amortized premium is treated as an offset to interest income
on a note and not as a separate deduction. The election to amortize premium on a
constant yield method, once made, applies to all debt obligations held or
subsequently acquired by the electing U.S. holder on or after the first day of
the first taxable year to which the election applies and may not be revoked
without the consent of the IRS.
Adjustment of conversion price
The conversion price of the notes is subject to adjustment under certain
circumstances (see "Description of the Notes--Conversion Rights--Conversion
Price Adjustments"). Certain adjustments to (or the failure to make such
adjustments to) the conversion price of the notes that increase the
proportionate interest of a U.S. holder in our assets or earnings and profits
may result in a taxable constructive distribution to the holders of the notes,
whether or not the holders ever convert the notes. This could occur, for
example, if the conversion price is adjusted to compensate holders of notes for
certain distributions of cash or property to our stockholders. Such constructive
distribution will be treated as a dividend to the extent of our current or
accumulated earnings and profits, as determined under U.S. federal income tax
principles. As a result, U.S. holders of notes could have taxable income as a
result of an event pursuant to which they receive no cash or property.
Generally, a U.S. holder's tax basis in a note will be increased by the amount
of any constructive dividend.
Additional amounts
We may be required to make payments of additional amounts if we do not
cause to be declared effective or maintain the effectiveness of a registration
statement, as described under "Description of the Notes--Registration Rights."
We intend to take the position for U.S. federal income tax purposes that any
payments of additional amounts should be taxable to U.S. holders as additional
interest income when received or accrued, in accordance with the holder's
regular method of tax accounting. Our determination is binding on holders of the
notes, unless they explicitly disclose that they are taking a different position
to the IRS on their tax returns for the year during which they acquire the
notes. The IRS could take a contrary position from that described above, which
could affect the timing and character of U.S. holders' income from the notes
with respect to the payments of additional amounts.
If we are required to pay additional amounts because we fail to cause to
be declared effective a registration statement, U.S. holders should consult
their tax advisors concerning the appropriate tax treatment of the payment of
additional amounts with respect to the notes.
Non-U.S. Holders
Payments of interest
Generally, payments of interest on the notes to, or on behalf of, a
non-U.S. holder will be considered "portfolio interest" and will not be
subject to U.S. federal income or withholding tax provided such interest is
not effectively connected with the conduct of a trade or business within the
United States by such non-U.S. holder and:
47
o such non-U.S. holder does not actually or by attribution own 10% or
more of the total combined voting power of all classes of our stock
entitled to vote;
o such non-U.S. holder is not a controlled foreign corporation for
U.S. federal income tax purposes that is related to us, actually or
by attribution, through stock ownership; and
o the certification requirements, as described below, are satisfied.
To satisfy the certification requirements referred to above, either (i)
the beneficial owner of a note must certify, on IRS Form W-8BEN (or successor
form) under penalties of perjury, to us or our paying agent, as the case may be,
that such owner is a non-U.S. person and must provide such owner's name and
address and taxpayer identification number, if any, or (ii) a securities
clearing organization, bank or other financial institution that holds customer
securities in the ordinary course of its trade or business, referred to as a
"Financial Institution," and holds the note on behalf of the beneficial owner
thereof must certify, under penalties of perjury, to us or our paying agent, as
the case may be, that such certificate has been received from the beneficial
owner and must furnish the payor with a copy thereof. Special certification
rules apply for notes held by foreign partnerships and other intermediaries.
If interest on the note is effectively connected with the conduct of a
trade or business in the United States by a non-U.S. holder (and, if certain tax
treaties apply, is attributable to a U.S. permanent establishment maintained by
the non-U.S. holder in the United States), the non-U.S. holder, although exempt
from U.S. federal withholding tax (provided that the certification requirements
discussed in the next sentence are met), will generally be subject to U.S.
federal income tax on such interest on a net income basis in the same manner as
if it were a U.S. holder. In order to claim an exemption from withholding tax,
such a non-U.S. holder will be required to provide us with a properly executed
IRS Form W-8ECI (or successor form) certifying, under penalties of perjury, that
the holder is a non-U.S. person and the interest is effectively connected with
the holder's conduct of a U.S. trade or business and is includible in the
holder's gross income. In addition, if such non-U.S. holder engaged in a U.S.
trade or business is a foreign corporation, it may be subject to a branch
profits tax equal to 30% (or such lower rate provided by an applicable treaty)
of its effectively connected earnings and profits for the taxable year, subject
to certain adjustments.
Interest on notes not effectively connected with a U.S. trade or business
and not excluded from U.S. federal withholding tax under the "portfolio
interest" exception described above generally will be subject to withholding at
a 30% rate, except where a non-U.S. holder can claim the benefits of an
applicable tax treaty to reduce or eliminate such withholding tax and certifies,
under penalties of perjury, as to such eligibility by executing an IRS Form
W-8BEN (or successor form).
Conversion of the notes
A non-U.S. holder generally will not be subject to U.S. federal income or
withholding tax on the conversion of a note solely into our common stock
(including the receipt of our common stock upon a repurchase of a note). To the
extent a non-U.S. holder receives cash in lieu of a fractional share of common
stock, such cash may give rise to gain that would be subject to the rules
described below with respect to the sale or exchange of a note or common stock.
See "--Sale or Exchange of the Notes or Common Stock" below.
Adjustment of conversion price
The conversion price of the notes is subject to adjustment in certain
circumstances. Any such adjustment could, in certain circumstances, give rise
to a deemed distribution to non-U.S. holders of the
48
notes. See "--U.S. Holders--Adjustment of Conversion Price" above. In such case,
the deemed distribution would be subject to the rules below regarding
withholding of U.S. federal tax on dividends in respect of common stock. See
"--Dividends on Common Stock" below.
Sale or exchange of the notes or common stock
A non-U.S. holder generally will not be subject to U.S. federal income or
withholding tax on gain realized on the sale or other taxable disposition
(including a redemption at our option and, in certain circumstances, a
conversion or repurchase) of a note or of common stock issued upon conversion or
repurchase thereof unless:
o the holder is an individual who was present in the United States for
183 days or more during the taxable year of the disposition and
certain other conditions are met;
o the gain is effectively connected with the conduct of a U.S. trade
or business by the non-U.S. holder (and, if required by a tax
treaty, the gain is attributable to a permanent establishment
maintained in the United States); or
o we are a "United States real property holding corporation" at any
time within the shorter of the five year period preceding such
disposition or such holder's holding period. If we are, or were to
become a United States real property holding corporation, a non-U.S.
holder might be subject to U.S. federal income and, in certain
circumstances, withholding tax with respect to gain recognized on
the disposition of notes or shares of common stock. We do not
believe that we are or have been, and do not anticipate that we will
be, a United States real property holding corporation.
Dividends on common stock
If we make distributions on our common stock, the distributions will
constitute a dividend for U.S. federal income tax purposes to the extent of our
current or accumulated earnings and profits, as determined under U.S. federal
income tax principles. Except as described below, dividends paid on common stock
held by a non-U.S. holder will be subject to U.S. federal withholding tax at a
rate of 30% or lower treaty rate, if applicable. A non-U.S. holder generally
will be required to satisfy certain IRS certification requirements in order to
claim a reduction of or exemption from withholding under a tax treaty by
executing an IRS Form W-8BEN (or successor form) certifying, under penalties of
perjury, its status as a non-U.S. person and its entitlement to the lower treaty
rate with respect to such payments.
If dividends paid to a non-U.S. holder are effectively connected with the
conduct of a U.S. trade or business by the non-U.S. holder and, if required by a
tax treaty, the dividends are attributable to a permanent establishment
maintained in the United States, we and other payors generally are not required
to withhold tax from the dividends, provided that the non-U.S. holder furnishes
to us a valid IRS Form W-8ECI (or successor form) certifying, under penalties of
perjury, that the holder is a non-U.S. person, and the dividends are effectively
connected with the holder's conduct of a U.S. trade or business and are
includible in the holder's gross income. Effectively connected dividends will be
subject to U.S. federal income tax on a net income basis in the same manner that
applies to U.S. persons generally (and, with respect to a non-U.S. holder that
is a foreign corporation, under certain circumstances, the 30% branch profits
tax, as discussed above).
49
U.S. estate tax
Notes owned or treated as owned by an individual who is not a citizen or
resident (as specifically defined for U.S. federal estate tax purposes) of the
United States at the time of death, referred to as a "nonresident decedent,"
will not be includible in the nonresident decedent's gross estate for U.S.
federal estate tax purposes as a result of such nonresident decedent's death,
provided that, at the time of death, the nonresident decedent does not own,
actually or by attribution, 10% or more of the total combined voting power of
all classes of our stock entitled to vote and payments with respect to such
notes would not have been effectively connected with the conduct of a U.S. trade
or business by the nonresident decedent.
Common stock owned or treated as owned by a nonresident decedent (or
common stock previously held by such an individual who transferred the stock
subject to certain retained rights or powers) will be includible in the
nonresident decedent's gross estate for U.S. federal estate tax purposes as a
result of the nonresident decedent's death. Subject to applicable treaty
limitations, if any, a nonresident decedent's estate may be subject to U.S.
federal estate tax on property includible in the estate for U.S. federal estate
tax purposes.
You should consult your own tax adviser as to the particular tax
consequences to you of purchasing, holding and disposing of the notes and our
common stock, including the applicability and effect of any state, local or
foreign tax laws, and of any proposed changes in applicable laws.
Backup Withholding Tax and Information Reporting
We will comply with applicable information reporting requirements with
respect to payments on the notes. A U.S. holder may be subject to United States
federal backup withholding tax at the applicable statutory rate with respect to
payments of interest and dividends on, and proceeds from the disposition of,
notes and common stock if the U.S. holder fails to supply an accurate taxpayer
identification number or otherwise fails to comply with applicable United States
information reporting or certification requirements. A non-U.S. holder may be
subject to United States backup withholding tax unless the non-U.S. holder
complies with certification procedures to establish that it is not a United
States person. Any amounts so withheld will be allowed as a credit against a
holder's United States federal income tax liability and may entitle a holder to
a refund, provided the required information is timely furnished to the IRS.
50
SELLING SECURITYHOLDERS
We originally issued the notes to J.P. Morgan Securities Inc., Banc of
America Securities LLC, Wachovia Capital Markets, LLC, Comerica Securities,
Inc., Fleet Securities, Inc., McDonald Investments Inc., Scotia Capital (USA)
Inc. and Tokyo-Mitsubishi International plc (the "Initial Purchasers") in a
private placement in August 2003. Our net proceeds from the sale and issuance of
the notes to the Initial Purchasers was approximately $482 million, after
deducting the discount and estimated expenses of the offering. The notes were
immediately resold by the Initial Purchasers to persons reasonably believed by
the Initial Purchasers to be qualified institutional buyers within the meaning
of Rule 144A under the Securities Act in transactions exempt from registration
under the Securities Act. Selling securityholders, including their transferees,
pledgees or donees or their successors, may from time to time offer and sell the
notes and the common stock into which the notes are convertible pursuant to this
prospectus. Our registration of the notes and the shares of common stock
issuable upon conversion of the notes does not necessarily mean that the selling
securityholders will sell all or any of the notes or the common stock. Unless
set forth below, none of the selling securityholders has had within the past
three years any material relationship with us or any of our predecessors or
affiliates.
The following table sets forth certain information as of November 3, 2003,
except where otherwise noted, concerning the principal amount of notes
beneficially owned by each selling securityholder and the number of shares of
common stock that may be offered from time to time by each selling
securityholder under this prospectus. The information is based on information
provided by or on behalf of the selling securityholders. The number of shares of
common stock issuable upon conversion of the notes shown in the table below
assumes conversion of the full amount of notes held by each holder at an initial
conversion price of $21.28 per share. This conversion price is subject to
adjustments in certain circumstances. Because the selling securityholders may
offer all or some portion of the notes or the common stock issuable upon
conversion of the notes, we have assumed for purposes of the table below that
the selling securityholders will sell all of the notes or convert all of the
notes and sell all of the common stock issuable upon conversion of the notes
offered by this prospectus. In addition, the selling securityholders identified
below may have sold, transferred or otherwise disposed of all or a portion of
their notes since the date on which they provided the information regarding
their notes in transactions exempt from the registration requirements of the
Securities Act. Information about the selling securityholders may change over
time. Any changed information given to us by the selling securityholders will be
set forth in prospectus supplements if and when necessary.
Other Shares of
Common Stock
Shares of Beneficially Owned
Aggregate Principal Common Stock Before the Offering
Amount of Notes Issuable Upon and Assumed to be
Beneficially Owned Conversion of The Owned Following the
Name* and Offered Notes** Offering***
- -------------------------------- ---------------------- -------------------- --------------------
Akanthos Arbitrage Master
Fund, L.P. (1) $ 6,000,000 281,954 0
Alexian Brothers Medical
Center (2) 145,000 6,813 0
Allstate Insurance Company (3) 1,250,000 58,740 78,878 (3A)
Aloha Airlines Non-Pilots
Pension Trust (4) 100,000 4,699 0
Aloha Pilots Retirement Trust (5) 50,000 2,349 0
Argent Classic Convertible
Arbitrage Fund L.P. (6) 6,800,000 319,548 0
Argent LowLev Convertible
Arbitrage Fund LLC (7) 1,500,000 70,488 0
Argent LowLev Convertible
Arbitrage Fund Ltd. (8) 1,300,000 61,090 0
Arkansas PERS (9) 1,100,000 51,691 0
Bancroft Convertible Fund, Inc. (10) 1,000,000 46,992 0
Boilermakers Blacksmith
Pension Trust (11) 2,065,000 97,039 0
C&H Sugar Company Inc. (12) 125,000 5,874 0
Chrysler Corporation Master Retirement Trust (13) 3,945,000 185,385 0
Credit Suisse First Boston
Europe Limited (14) 5,000,000 234,962 0
Delaware PERS (15) 2,325,000 109,257 0
Delta Air Lines Master Trust - CV (16) 1,665,000 78,242 0
Delta Airlines Master Trust (17) 750,000 35,244 0
Delta Pilots Disability & Survivorship Trust -
CV (18) 810,000 38,063 0
Drury University (19) 20,000 939 0
Duke Endowment (20) 400,000 18,796 0
Ellsworth Convertible Growth & Income Fund,
Inc. (21) 1,000,000 46,992 0
Froley Revy Convertible Securities Fund (22) 235,000 11,043 0
Fore Convertible Master
Fund Ltd. (23) 18,759,000 881,531 0
Gaia Offshore Master Fund Ltd. (24) 3,170,000 148,966 0
GLG Market Neutral Fund. (25) 30,000,000 1,409,774 0
Guggenheim Portfolio
Company VII LLC (26) 3,053,000 143,468 0
Guggenheim Portfolio
Company VIII LLC (27) 3,678,000 172,838 0
Hawaiian Airlines Employees
51
Pension Plan - IAM (28) 35,000 1,644 0
Hawaiian Airlines Pension Plan for Salaried
Employees (29) 5,000 234 0
Hawaiian Airlines Pilots
Retirement Plan (30) 90,000 4,229 0
Hillbloom Foundation (31) 40,000 1,879 0
ICI American Holdings Trust (32) 525,000 24,671 0
JMG Capital Partners, L.P. (33) 7,500,000 352,443 75,090 (33A)
JMG Triton Offshore
Fund, Ltd. (34) 11,500,000 540,413 75,090 (34A)
LDG Limited 35) 571,000 26,832 0
Lexington Vantage Fund (36) 56,000 2,631 0
Lyxor/Gaia II Fund Ltd. (37) 830,000 39,003 0
Lyxor Master Fund (38) 1,000,000 46,992 0
Man Convertible Bond Master Fund, Ltd. (39) 5,088,000 239,097 0
Man Diversified Funds II Limited (40) 1,553,000 72,979 0
Man Mac 1 Limited (41) 4,958,000 232,988 0
Maystone Continuum Master Fund, Ltd. (42) 500,000 23,496 0
Microsoft Corporation (43) 3,140,000 147,556 0
Motion Picture Industry Health Plan -
Active Member Fund (44) 435,000 20,441 0
Motion Picture Industry Health Plan -
Retiree Member Fund (45) 270,000 12,687 0
Nomura Securities International Inc. (46) 22,500,000 1,057,330 0
OCM Convertible Trust (47) 4,485,000 210,761 0
Oppenheimer Convertible Securities Fund (48) 4,000,000 187,969 0
Partner Reinsurance Company Ltd. (49) 1,380,000 64,849 0
Peoples Benefit Life Insurance Company
Teamsters (50) 5,000,000 234,962 0
Prudential Insurance Co. of America (51) 140,000 6,578 0
Qwest Occupational Health Trust (52) 505,000 23,731 0
Sphinx Fund (53) 93,000 4,370 0
St. Thomas Trading, Ltd. (54) 10,636,000 499,812 0
State Employees' Retirement Fund of the
State of Delaware (55) 1,830,000 85,996 0
State of Oregon/Equity (56) 7,310,000 343,515 0
State of Oregon/SAIF Corporation (57) 3,075,000 144,501 0
Sygenta AG (58) 395,000 18,562 0
TD Securities (USA) Inc. (59) 27,005,000 1,269,031 0
Teachers Insurance and Annuity Association
of America (60) 10,000,000 469,924 0
The Coast Fund, L.P. (61) 200,000 9,398 0
TQA Master Fund, Ltd. (62) 4,403,000 206,907 0
TQA Master Plus Fund, Ltd. (63) 4,225,000 198,543 0
TQA Special Opportunities Master Fund Ltd. (64) 1,000,000 46,992 0
O'Connor Global Convertible
52
Arbitrage Master Ltd. (65) 10,000,000 469,924 0
US Bank FBO Benedictine Health Systems (66) 160,000 7,518 0
Vanguard Convertible Securities Fund, Inc. (67) 13,785,000 647,791 0
Xavex Convertible Arbitrage 2 Fund (68) 600,000 28,195 0
Xavex Convertible Arbitrage 7 Fund (69) 906,000 42,575 0
Xavex Convertible Arbitrage 10 Fund (70) 1,600,000 75,187 0
Zeneca Holdings Trust (71) 725,000 34,069 0
Zurich Institutional Benchmark Master Fund LTD (72) 300,000 14,097 0
Zurich Institutional Benchmarks Master Fund LTD (73) 756,000 35,526 0
- --------------
* Other selling securityholders may be identified at a later date.
Certain selling securityholders are, or are affiliates of, registered
broker-dealers. These selling securityholders have represented that they
acquired their securities in the ordinary course of business and, at the
time of the acquisition of the securities, had no agreements or
understandings, directly or indirectly, with any person to distribute the
securities. To the extent that we become aware that any such selling
securityholders did not acquire its securities in the ordinary course of
business or did have such an agreement or understanding, we will file a
post-effective amendment to the registration statement of which this
prospectus is a part to designate such person as an "underwriter" within
the meaning of the Securities Act of 1933.
** Assumes conversion of all of the holder's notes at a conversion rate of
46.9925 shares of common stock per 1,000 principal amount at maturity of
the notes. This conversion rate is subject to adjustment as described
under "Description of Notes--Conversion Rights." As a result, the number
of shares of common stock issuable upon conversion of the notes may change
in the future. Excludes shares of common stock that may be issued by us
upon the repurchase of the notes and fractional shares. Holders will
receive a cash adjustment for any fractional share amount resulting from
conversion of the notes, as described under "Description of
Notes--Conversion Rights."
*** Based on the outstanding shares of Vishay as of October 31, 2003, none of
the selling securityholders would beneficially own in excess of 1% of the
outstanding shares following the sale of securities in the offering.
(1) Akanthos Capital Management, LLC is the general partner and investment
advisor of Akanthos Arbitrage Master Fund, L.P. Michael Kao is the
managing member of Akanthos Capital and as such has voting and dispositive
power over the securities held by the fund. Mr. Kao and Akanthos Capital
disclaim beneficial ownership of the securities held by the fund except
for their pecuniary interest therein.
(2) Froley Revy Investment Co., Inc. acts as investment advisor for the
Alexian Brothers Medical Center with respect to the securities indicated
in the table and as such has voting and dispositive power over the
securities held by the medical center. James Barry is a managing director
of Froley Revy and the portfolio manager for the medical center on behalf
of Froley Revy. Mr. Barry and Froley Revy disclaim beneficial ownership of
the securities held by the medical center.
(3) Allstate Insurance Company is a wholly-owned subsidiary of The Allstate
Corporation, a publicly held corporation. Allstate Insurance Company is an
affiliate of the following broker-dealers: 1) AFD, Inc., a wholly-owned
subsidiary of Allstate Life Insurance Company; 2) Allstate Distribution,
LLC, owned equally by Allstate Life and Putnam Investments, Inc.; 3) ALFS,
Inc, a wholly-owned subsidiary of Allstate Life; 4) Allstate Financial
Services, LLC, a wholly-owned subsidiary of Allstate Life and 5) Allstate
Assurance Company, a wholly-owned subsidiary of Allstate Life.
53
(3A) The shares are held by Allstate Insurance Company and its subsidiary and
affiliates as follows: Allstate Insurance Company: 48,588 shares; Allstate
Retirement Plan: 19,896 shares; Agents Pension Plan: 6,394 shares; and
Allstate New Jersey Insurance Company: 4,000 shares.
Allstate Retirement Plan is a qualified ERISA plan that is maintained for
the benefit of certain employees of Allstate Insurance. BNY Midwest Trust
Company, as Trustee for the Plan, holds title to all plan investments.
Allstate Insurance disclaims any interest in the securities held in this
plan although the investment committee for the plan consists of Allstate
Insurance officers. Agents Pension Plan is a qualified ERISA plan that is
maintained for the benefit of certain agents of Allstate Insurance
Company. BNY Midwest Trust Company, as Trustee for such plan, holds title
to all plan investments. Allstate Corporation disclaims any interest in
securities held in this plan, although the investment committee for the
plan consists of Allstate Insurance officers. Allstate Insurance is the
parent company of Allstate New Jersey Holdings, LLC, which is the parent
company of Allstate New Jersey Insurance Company. Allstate Investments,
LLC, an affiliate of Allstate Insurance is the investment manager for
AllState New Jersey Insurance Company.
(4) Froley Revy Investment Co., Inc. acts as investment advisor for the Aloha
Airlines Non-Pilots Pension Trust with respect to the securities indicated
in the table and as such has voting and dispositive power over the
securities held by the trust. James Barry is a managing director of Froley
Revy and the portfolio manager for the trust on behalf of Froley Revy. Mr.
Barry and Froley Revy disclaim beneficial ownership of the securities held
by the trust.
(5) Froley Revy Investment Co., Inc. acts as investment advisor for the Aloha
Pilots Retirement Trust with respect to the securities indicated in the
table and as such has voting and dispositive power over the securities
held by the trust. James Barry is a managing director of Froley Revy and
the portfolio manager for the trust on behalf of Froley Revy. Mr. Barry
and Froley Revy disclaim beneficial ownership of the securities held by
the trust.
(6) Bruce McMahan, Saul Schwartzman and John Gordon are the general partners
of Argent Classic Convertible Arbitrage Fund L.P. and as such have voting
and dispositive power over the securities held by the fund. Messrs.
MacMahan, Schwartzman and Gordon disclaim beneficial ownership of the
securities held by the fund except for their pecuniary interest therein.
(7) Bruce McMahan, Saul Schwartzman and John Gordon are the managing members
of Argent LowLev Convertible Arbitrage Fund LLC and as such have voting
and dispositive power over the securities held by the fund. Messrs.
McMahan, Schwartzman and Gordon disclaim beneficial ownership of the
securities held by the fund except for their pecuniary interest therein.
(8) Henry Cox and Thomas Marshall are the managing members of Argent LowLev
Convertible Arbitrage Fund Ltd. and as such have voting and dispositive
power over the securities held by the fund. Messrs. Cox and Marshall
disclaim beneficial ownership of the securities held by the fund except
for their pecuniary interest therein.
(9) Froley Revy Investment Co., Inc. acts as the investment advisor for the
Arkansas PERS with respect to the securities indicated in the table and as
such has voting and dispositive power over the securities held by the
Arkansas PERS. Andrea O'Connell is the chief executive officer of Froley
Revy and the portfolio manager for the Arkansas PERS on behalf of Froley
Revy. Ms. O'Connell and Froley Revy disclaim beneficial ownership of the
securities held by the Arkansas PERS.
(10) Bancroft Convertible Fund, Inc. is a publicly-traded closed end investment
fund. Davis Dinsmore Management Co. acts as investment advisor for the
fund.
54
(11) Froley Revy Investment Co., Inc. acts as the investment advisor for the
Boilermakers Blacksmith Pension Trust with respect to the securities
indicated in the table and as such has voting and dispositive power over
the securities held by the trust. Ravi Malik is a managing director of
Froley Revy and the portfolio manager for the trust on behalf of Froley
Revy. Mr. Malik and Froley Revy disclaim beneficial ownership of the
securities held by the trust.
(12) Froley Revy Investment Co., Inc. acts as the investment advisor for C&H
Sugar Company Inc. with respect to the securities indicated in the table
and as such has voting and dispositive power over the securities held by
C&H Sugar. James Barry is a managing director of Froley Revy and the
portfolio manager for C&H Sugar on behalf of Froley Revy. Mr. Barry and
Froley Revy disclaim beneficial ownership of the securities held by C&H
Sugar.
(13) Oaktree Capital Management, LLC acts as the investment manager and agent
for the Chrysler Corporation Master Retirement Trust with respect to the
securities indicated in the table and as such has voting and dispositive
power over the securities held by the trust. Lawrence Keele is a principal
of Oaktree and the portfolio manager for the trust on behalf of Oaktree.
Mr. Keele and Oaktree disclaim beneficial ownership of the securities held
by the trust.
(14) David Clarkson is a managing director for Credit Suisse First Boston
Europe Limited and as such has voting and dispositive power over the
securities held by the fund. Mr. Clarkson disclaims beneficial ownership
of the securities held by the fund. Credit Suisse Europe is an affiliate
of Credit Suisse First Boston LLC, a registered broker-dealer.
(15) Froley Revy Investment Co., Inc. acts as the investment advisor for the
Delaware PERS with respect to the securities indicated in the table and as
such has voting and dispositive power over the securities held by the
Delaware PERS. Andrea O'Connell is the chief executive officer of Froley
Revy and the portfolio manager for the Delaware PERS on behalf of Froley
Revy. Ms. O'Connell and Froley Revy disclaim beneficial ownership of the
securities held by the Delaware PERS.
(16) Oaktree Capital Management, LLC acts as the investment advisor and agent
for the Delta Airlines Master Trust-CV with respect to the securities
indicated in the table and as such has voting and dispositive power over
the securities held by the trust. Lawrence Keele is a principal of Oaktree
and the portfolio manager for the trust on behalf of Oaktree. Mr. Keele
and Oaktree disclaim beneficial ownership of the securities held by the
trust.
(17) Froley Revy Investment Co., Inc. acts as the investment advisor for the
Delta Airlines Master Trust with respect to the securities indicated in
the table and as such has voting and dispositive power over the securities
held by the trust. Ravi Malik is a managing director of Froley Revy and
the portfolio manager for the trust on behalf of Froley Revy. Mr. Malik
and Froley Revy disclaim beneficial ownership of the securities held by
the trust.
(18) Oaktree Capital Management, LLC acts as the investment manager and agent
for Delta Pilots Disability Survivorship Trust-CV with respect to the
securities indicated in the table and as such has voting and dispositive
power over the securities held by the trust. Lawrence Keele is a principal
of Oaktree and the portfolio manager for the trust on behalf of Oaktree.
Mr. Keele and Oaktree disclaim beneficial ownership of the securities held
by the trust.
(19) Froley Revy Investment Co., Inc. acts as the investment advisor for Drury
University with respect to the securities indicated in the table and as
such has voting and dispositive power over the securities held by the
university. James Barry is a managing director of Froley Revy and the
portfolio manager for the university on behalf of Froley Revy. Mr. Barry
and Froley Revy disclaim beneficial ownership of the securities held by
the university.
(20) Froley Revy Investment Co., Inc. acts as the investment advisor for the
Duke Endowment with respect to the securities indicated in the table and
as such has voting and dispositive power over the securities held by
55
the endowment. Ravi Malik is a managing director of Froley Revy and the
portfolio manager for the endowment on behalf of Froley Revy. Mr. Malik
and Froley Revy disclaim beneficial ownership of the securities held by
the endowment.
(21) Ellsworth Convertible Growth & Income Fund, Inc. is a publicly-traded
closed end investment fund. Davis Dinsmore Management Co. acts as the
investment advisor for the fund.
(22) Froley Revy Investment Co., Inc. acts as investment advisor for Froley
Revy Convertible Securities Fund and as such has voting and dispositive
power over the securities held by the fund. James Barry is a managing
director of Froley Revy and the portfolio manager for the fund on behalf
of Froley Revy. Mr. Barry and Froley Revy disclaim beneficial ownership of
the securities held by the fund except for their pecuniary interest
therein.
(23) Bisys Hedge Fund Holdings Ltd. acts as the investment manager for Fore
Convertible Master Fund Ltd. with respect to the securities indicated in
the table and as such has voting and dispositive power over the securities
held by the fund. Bisys Group Inc., a publicly-held corporation, is the
controlling shareholder of Bisys Holdings. Bisys Holdings and Bisys Group
disclaim beneficial ownership of the securities held by the fund.
(24) Promethean Asset Management, LLC acts as the investment manager for Gaia
Offshore Master Fund, Ltd. with respect to the securities indicated in the
table and as such has voting and dispositive power over the securities
held by the fund. James F. O'Brien, Jr. is the controlling person of
Promethean. Mr. O'Brien and Promethean disclaim beneficial ownership of
the securities held by the fund.
(25) GLG Market Neutral Fund is a publicly-held company listed on the Irish
Stock Exchange. GLG Partners LP, an English limited partnership, acts as
the investment manager of the fund. The general partner of GLG Partners LP
is GLG Partners Limited, an English limited company. GLG Partners LP and
GLG Partners Limited disclaim beneficial ownership of the securities held
by the fund except for their pecuniary interest therein.
(26) Guggenheim Advisors LLC is the managing member of Guggenheim Portfolio
Company VII LLC and as such has voting and dispositive power over the
securities held by the fund. Loren Katzovitc, Kevin Felix and Patrick
Hughes are the managing members of Guggenheim Advisors. Messrs. Katzovitc,
Felix and Hughes and Guggenheim Advisors disclaim beneficial ownership of
the securities held by the fund except for their pecuniary interest
therein.
(27) Guggenheim Advisors LLC is the managing member of Guggenheim Portfolio
Company VIII LLC and as such has voting and dispositive power over the
securities held by the fund. Loren Katzovitc, Kevin Felix and Patrick
Hughes are the managing members of Guggenheim Advisors. Messrs. Katzovitc,
Felix and Hughes and Guggenheim Advisors disclaim beneficial ownership of
the securities held by the fund except for their pecuniary interest
therein.
(28) Froley Revy Investment Co., Inc. acts as the investment advisor for the
Hawaiian Airlines Employees Pension Plan-IAM with respect to the
securities indicated in the table and as such has voting and dispositive
power over the securities held by the pension plan. James Barry is a
managing director of Froley Revy and the portfolio manager for the pension
plan on behalf of Froley Revy. Mr. Barry and Froley Revy disclaim
beneficial ownership of the securities held by the pension plan.
(29) Froley Revy Investment Co., Inc. acts as the investment advisor for the
Hawaiian Airlines Pension Plan for Salaried Employees with respect to the
securities indicated in the table and as such has voting and dispositive
power over the securities held by the pension plan. James Barry is a
managing director of Froley Revy and the portfolio manager for the pension
plan on behalf of Froley Revy. Mr. Barry and Froley Revy disclaim
beneficial ownership of the securities held by the pension plan.
(30) Froley Revy Investment Co., Inc. acts as the investment advisor for the
Hawaiian Airlines Pilots Retirement Plan with respect to the securities
indicated in the table and as such has voting and dispositive
56
power over the securities held by the retirement plan. James Barry is a
managing director of Froley Revy and the portfolio manager for the pension
plan on behalf of Froley Revy. Mr. Barry and Froley Revy disclaim
beneficial ownership of the securities held by the retirement plan.
(31) Froley Revy Investment Co., Inc. acts as the investment advisor for the
Hillbloom Foundation with respect to the securities indicated in the table
and as such has voting and dispositive power over the securities held by
the foundation. James Barry is a managing director of Froley Revy and the
portfolio manager for the foundation on behalf of Froley Revy. Mr. Barry
and Froley Revy disclaim beneficial ownership of the securities held by
the foundation.
(32) Froley Revy Investment Co., Inc. acts as the investment advisor for the
ICI American Holdings Trust with respect to the securities indicated in
the table and as such has voting and dispositive power over the securities
held by the trust. Andrea O'Connell is the chief executive officer of
Froley Revy and the portfolio manager for the trust on behalf of Froley
Revy. Ms. O'Connell and Froley Revy disclaim beneficial ownership of the
securities held by the trust.
(33) JMG Capital Management, LLC, is the general partner of JMG Capital
Partners, L.P and as such has voting and dispositive over the securities
held by JMG Partners. JMG Capital Management, Inc., is the controlling
member of JMG Management. Jonathan M. Glaser is the chief executive
officer and director of JMG Management Inc. Mr. Glaser, JMG Management and
JMG Capital Management disclaim beneficial ownership of the securities
held by JMG Partners except for their pecuniary interest therein.
(33A) Represents shares of common stock issuable upon conversion of Vishay
Liquid Yield (TM) Option Notes due 2021.
(34) Pacific Assets Management LLC is the investment manager for JMG Triton
Offshore Fund, Ltd. and as such has voting and dispositive power over the
securities held by the fund. Pacific Capital Management, Inc. is the
managing member of Pacific Assets Management. Roger Richter, Jonathan M.
Glaser and Daniel A. David are the controlling shareholders of Pacific
Capital Management. Messrs. Richter, Glaser and David, Pacific Asset
Management and Pacific Capital Management disclaim beneficial ownership of
the securities held by the fund.
(34A) Represents shares of common stock issuable upon conversion of Vishay
Liquid Yield (TM) Option Notes due 2021.
(35) TQA Investors, L.L.C. acts as the investment manager for LDG Limited with
respect to the securities indicated in the table and as such has voting
and dispositive power over the securities held by LDG. Robert Butman, John
Idone and Paul Bucci are the investment advisors and the portfolio
managers for LDG on behalf of TQA Investors. Messrs. Butman, Idone and
Bucci and TQA Investors disclaim beneficial ownership of the securities
held by LDG.
(36) TQA Investors, L.L.C. acts as the investment manager for Lexington Vantage
Fund with respect to the securities indicated in the table and as such has
voting and dispositive power over the securities held by the fund. Robert
Butman, John Idone and Paul Bucci are the investment advisors and the
portfolio managers for the fund on behalf of TQA Investors. Messrs.
Butman, Idone and Bucci and TQA Investors disclaim beneficial ownership of
the securities held by the fund.
(37) Promethean Asset Management, LLC acts as the investment manager for
Lyxor/Gaia II Fund Ltd. with respect to the securities indicated in the
table and as such has voting and dispositive power over the securities
held by the fund. James F. O'Brien, Jr. is the controlling person of
Promethean. Mr. O'Brien and Promethean disclaim beneficial ownership of
the securities held by the fund.
(38) Bruce McMahan, Saul Schwartzman and John Gordon are the investment
advisors of Lyxor Master Fund and as such have voting and dispositive
power over the securities held by the fund. Messrs. McMahan, Schwartzman
and Gordon disclaim beneficial ownership of the securities held by the
fund.
57
(39) J.T. Hensen and John Null act as the investment managers of Man
Convertible Bond Master Fund, Ltd. and as such have voting and dispositive
power over the securities held by the fund. Messrs. Hensen and Null
disclaim beneficial ownership of the securities held by the fund.
(40) Albany Management Company Ltd. and Man Holdings plc are the controlling
shareholders of Man Diversified Funds II Limited and as such have voting
and dispositive power over the securities held by the fund. Albany
Management is owned by Argonaut Limited. The controlling shareholder of
Argonaut is Michael Collins. Man Holdings is a subsidiary of Man Group
plc, which is a publicly traded UK company. Mr. Collins, Albany
Management, Argonaut Limited, Man Holdings and the Man Group disclaim
beneficial ownership of the securities held by the fund except for their
pecuniary interest therein.
(41) Man Diversified Funds II Limited is the controlling shareholder of Man Mac
1 Limited. See the preceding footnote for information concerning Man
Diversified Funds II.
(42) Maystone Partners, LLC acts as the investment manager for Maystone
Continuum Master Fund, Ltd with respect to the securities indicated in the
table and as such has voting and dispositive power over the securities
held by the fund. Henry J. Pizzutello and Mark R. Connors are the managing
members of Maystone Partners. Messrs. Pizzutello and Connors and Maystone
Partners disclaim beneficial ownership of the securities held by the fund
except for their pecuniary interest therein.
(43) Oaktree Capital Management, LLC acts as the investment manager and agent
for Microsoft Corporation with respect to the securities indicated in the
table and as such has voting and dispositive power over the securities
held by Microsoft. Lawrence Keele is a principal of Oaktree and is the
portfolio manager for Microsoft on behalf of Oaktree. Mr. Keele and
Oaktree disclaim beneficial ownership of the securities held by Microsoft.
(44) Oaktree Capital Management, LLC acts as the investment manager and agent
for the Motion Picture Industry Health Plan-Active Member Fund with
respect to the securities indicated in the table and as such has voting
and dispositive power over the securities held by the fund. Lawrence Keele
is a principal of Oaktree and is the portfolio manager for the fund on
behalf of Oaktree. Mr. Keele and Oaktree disclaim beneficial ownership of
the securities held by the fund.
(45) Oaktree Capital Management, LLC acts as the investment manager and agent
for the Motion Picture Industry Health Plan-Retiree Member Fund with
respect to the securities indicated in the table and as such has voting
and dispositive power over the securities held by the fund. Lawrence Keele
is a principal of Oaktree and is the portfolio manager for the fund on
behalf of Oaktree. Mr. Keele and Oaktree disclaim beneficial ownership of
the securities held by the fund.
(46) Robert Citrino is the managing director of Nomura Securities International
Inc. and as such has voting and dispositive power over the securities held
by Nomura. Mr. Citrino disclaims beneficial ownership of the securities
held by Nomura except for his pecuniary interest therein. Nomura is a
registered broker-delear.
(47) Oaktree Capital Management, LLC acts as the investment manager and agent
for the OCM Convertible Trust with respect to the securities indicated in
the table and as such has voting and dispositive power over the securities
held by the trust. Lawrence Keele is a principal of Oaktree and is the
portfolio manager for the trust on behalf of Oaktree. Mr. Keele and
Oaktree disclaim beneficial ownership of the securities held by the trust.
(48) Ted Everett is the portfolio manager for Oppenheimer Convertible
Securities Fund with respect to the securities indicated in the table and
as such has voting and dispositive power over the securities held by the
fund. Mr. Everett disclaims beneficial ownership of the securities held by
the fund except for his pecuniary interest therein. The fund is an
affiliate of Oppenheimer Funds Distributors, Inc., which is a registered
broker-dealer.
58
(49) Oaktree Capital Management, LLC acts as the investment manager and agent
for the Partner Reinsurance Company Ltd. with respect to the securities
indicated in the table and as such has voting and dispositive power over
the securities held by the trust. Lawrence Keele is a principal of Oaktree
and is the portfolio manager for the trust on behalf of Oaktree. Mr. Keele
and Oaktree disclaim beneficial ownership of the securities held by the
trust.
(50) Alex Lach is the portfolio manager for the Peoples Benefit Life Insurance
Company Teamsters with respect to the securities indicated in the table
and as such has voting and dispositive power over the securities held by
this company. Mr. Lach disclaims beneficial ownership of the securities
held by the company.
(51) Froley Revy Investment Co., Inc. acts as the investment advisor for
Prudential Insurance Co. of American with respect to the securities
indicated in the table and as such has voting and dispositive power over
the securities held by Prudential. Andrea O'Connell is the chief executive
officer of Froley Revy and the portfolio manager for Prudential on behalf
of Froley Revy. Ms. O'Connell and Froley Revy disclaim beneficial
ownership of the securities held by Prudential.
(52) Oaktree Capital Management, LLC acts as the investment manager and agent
for the Qwest Occupational Health Trust with respect to the securities
indicated in the table and as such has voting and dispositive power over
the securities held by the trust. Lawrence Keele is a principal of Oaktree
and is the portfolio manager for the trust on behalf of Oaktree. Mr. Keele
and Oaktree disclaim beneficial ownership of the securities held by the
trust.
(53) TQA Investors, L.L.C. acts as the investment manager for the Sphinx Fund
with respect to the securities indicated in the table and as such has
voting and dispositive power over the securities held by the fund. Robert
Butman, John Idone and Paul Bucci are the investment advisors and the
portfolio managers for the fund on behalf of TQA Investors. Messrs.
Butman, Idone and Bucci and TQA Investors disclaim beneficial ownership of
the securities held by the fund.
(54) J.T. Hensen and John Null act as the investment managers for St. Thomas
Trading, Ltd. with respect to the securities indicated in the table and as
such have voting and dispositive power over the securities held by St.
Thomas Trading. Messrs. Hensen and Null disclaim beneficial ownership of
the securities held by St. Thomas Trading.
(55) Oaktree Capital Management, LLC acts as the investment manager and agent
for the State Employees' Retirement Fund of the State of Delaware with
respect to the securities indicated in the table and as such has voting
and dispositive power over the securities held by the fund. Lawrence Keele
is a principal of Oaktree and is the portfolio manager for the fund on
behalf of Oaktree. Mr. Keele and Oaktree disclaim beneficial ownership of
the securities held by the fund.
(56) Froley Revy Investment Co., Inc. acts as the investment advisor for State
of Oregon/Equity with respect to the securities indicated in the table and
as such has voting and dispositive power over the securities held by State
of Oregon/Equity. Andrea O'Connell is the chief executive officer of
Froley Revy and the portfolio manager for the fund on behalf of Froley
Revy. Ms. O'Connell and Froley Revy disclaim beneficial ownership of the
securities held by State of Oregon/Equity.
(57) Froley Revy Investment Co., Inc. acts as the investment advisor for the
State of Oregon/SAIF Corporation with respect to the securities indicated
in the table and as such has voting and dispositive power over the
securities held by State of Oregon/SAIF. James Barry is a managing
director of Froley Revy and the portfolio manager for State of Oregon/SAIF
on behalf of Frolely Revy. Mr. Barry and Froley Revy disclaim beneficial
ownership of the securities held by State of Oregon/SAIF.
(58) Froley Revy Investment Co., Inc. acts as investment advisor for Sygenta AG
with respect to the securities indicated in the table and as such has
voting and dispositive power over the securities held by Sygenta. Andrea
O'Connell is the chief executive officer of Froley Revy and the portfolio
manager for Sygenta on
59
behalf of Froley Revy. Ms. O'Connell and Froley Revy disclaim beneficial
ownership of the securities held by Sygenta.
(59) TD Securities (USA) Inc. is a subsidiary of Toronto Dominion Bank, a
publicly-held corporation. Fore Advisors LP is the portfolio manager for
TD Securities. TD Securities is a registered broker-dealer.
(60) Edward Toy is a managing director of Teachers Insurance and Annuity
Association of America and has voting and dispositive power over the
securities held by Teachers. Mr. Toy disclaims beneficial ownership of the
securities held by Teachers.
(61) Coast Offshore Management (Cayman) Ltd. and Coast Investment Management,
L.L.C. are the general partners of The Coast Fund, L.P. and as such have
voting and dispositive power over the securities held by the fund. David
E. Smith and Christopher D. Pettit are the controlling shareholders of
Coast Offshore and the managing members of Coast Investment. Messrs. Smith
and Pettit, Coast Offshore and Coast Investment disclaim beneficial
ownership of the securities held by the fund except for their pecuniary
interest therein.
(62) TQA Investors, L.L.C. acts as the investment manager for TQA Master Fund,
Ltd. and as such has voting and dispositive power over the securities held
by the fund. Robert Butman, John Idone and Paul Bucci are the investment
advisors and the portfolio managers for the fund on behalf of TQA
Investors. Messrs. Butman, Idone and Bucci and TQA Investors disclaim
beneficial ownership of the securities held by the fund except for their
pecuniary interest therein.
(63) TQA Investors, L.L.C. acts as the investment manager for TQA Master Plus
Fund, Ltd. and as such has voting and dispositive power over the
securities held by this fund. Robert Butman, John Idone and Paul Bucci are
the investment advisors and the portfolio managers for the fund on behalf
of TQA Investors. Messrs. Butman, Idone and Bucci and TQA Investors
disclaim beneficial ownership of the securities held by the fund except
for their pecuniary interest therein.
(64) TQA Investors, L.L.C. acts as the investment manager for TQA Special
Opportunities Master Fund Ltd. and as such has voting and dispositive
power over the securities held by the fund. Robert Butman, John Idone and
Paul Bucci are the investment advisors and the portfolio managers for the
fund on behalf of TQA Investors. Messrs. Butman, Idone and Bucci and TQA
Investors disclaim beneficial ownership of the securities held by the fund
except for their pecuniary interest therein.
(65) UBS O'Connor L.L.C. acts as the investment advisor for O'Connor Global
Convertible Arbitrage Master Ltd. with respect to the securities indicated
in the table and as such has voting and dispositive power over the
securities held by the fund. UBS O'Connor L.L.C. is a subsidiary of UBS
AG, which is a publicly-held company. UBS AG has one or more subsidiaries
that are registered broker-dealers.
(66) Froley Revy Investment Co., Inc. acts as the investment advisor for US
Bank FBO Benedictine Health Systems with respect to the securities
indicated in the table and as such has voting and dispositive power over
the securities held by Benedictine Health Systems. James Barry is a
managing director of Froley Revy and the portfolio manager for Benedictine
Health Systems on behalf of Froley Revy. Mr. Barry and Froley Revy
disclaim beneficial ownership of the securities held by Benedictine Health
Systems.
(67) Oaktree Capital Management, LLC acts as investment advisor and agent for
the Vanguard Convertible Securities Fund, Inc. with respect to the
securities indicated in the table and as such has voting and dispositive
power over the securities held by the fund. Lawrence Keele is a principal
of Oaktree and is the portfolio manager for the fund on behalf of Oaktree.
Mr. Keele and Oaktree disclaim beneficial ownership of the securities held
by the fund.
(68) Bruce McMahan, Saul Schwartzman and John Gordon are the investment
advisors of Xavex Convertible Arbitrage 2 Fund and as such have voting and
dispositive power over the securities held by this fund.
60
Messrs. McMahan, Schwartzman and Gordon disclaim beneficial ownership of
the securities held by the fund except for their pecuniary interest in
them.
(69) TQA Investors, L.L.C. acts as the investment manager for Xavex Convertible
Arbitrage 7 Fund and as such has voting and dispositive power over the
securities held by the fund. Robert Butman, John Idone and Paul Bucci are
the investment advisors and the portfolio managers for the fund on behalf
of TQA Investors. Messrs. Butman, Idone and Bucci and TQA Investors
disclaim beneficial ownership of the securities held by the fund.
(70) Bruce McMahan, Saul Schwartzman and John Gordon are the investment
advisors of Xavex Convertible Arbitrage 10 Fund and as such have voting
and dispositive power over the securities held by the fund. Messrs.
McMahan, Schwartzman and Gordon disclaim beneficial ownership of the
securities held by the fund except for their pecuniary interest therein.
(71) Froley Revy Investment Co., Inc. acts as the investment advisor for the
Zeneca Holdings Trust with respect to the securities indicated in the
table and as such has voting and dispositive power over the securities
held by the trust. Andrea O'Connell is the chief executive officer of
Froley Revy and the portfolio manager for the trust on behalf of Froley
Revy. Ms. O'Connell and Froley Revy disclaim beneficial ownership of the
securities held by the trust.
(72) Bruce McMahan, Saul Schwartzman and John Gordon are the investment
advisors of Zurich Institutional Benchmark Master Fund LTD and as such
have voting and dispositive power over the securities held by the fund.
Messrs. McMahan, Schwartzman and Gordon disclaim beneficial ownership of
the securities held by the fund.
(73) TQA Investors, L.L.C. acts as the investment manager for Zurich
Institutional Benchmarks Master Fund LTD. with respect to the securities
indicated in the table and as such has voting and dispositive power over
the securities held by the fund. Robert Butman, John Idone and Paul Bucci
are the investment advisors and the portfolio managers for the fund on
behalf of TQA Investors. Messrs. Butman, Idone and Bucci and TQA Investors
disclaim beneficial ownership of the securities held by the fund.
PLAN OF DISTRIBUTION
The selling securityholders and their successors, which includes their
pledgees, donees, partnership distributees and other transferees receiving the
notes or common stock from the selling securityholders in non-sale transfers,
may sell the notes and the underlying common stock directly to purchasers or
through underwriters, broker-dealers or agents. Underwriters, broker-dealers or
agents may receive compensation in the form of discounts, concessions or
commissions from the selling securityholders or the purchasers. These discounts,
concessions or commissions may be in excess of those customary in the types of
transactions involved.
The notes and the underlying common stock may be sold in one or more
transactions at:
o fixed prices that may be changed;
o prevailing market prices at the time of sale;
o prices' related to the prevailing market prices;
61
o varying prices determined at the time of sale; or
o negotiated prices.
These sales may be effected in transactions, which may involve cross or
block transactions, in the following manner:
o on any national securities exchange or quotation service on which
the notes or the common stock may be listed or quoted at the time of
sale;
o in the over-the-counter-market;
o in transactions otherwise than on these exchanges or services or in
the over-the-counter market (privately negotiated transactions);
o through the writing and exercise of options, whether these options
are listed on an options exchange or otherwise; or
o through any combination of the foregoing.
Selling securityholders may enter into hedging transactions with
broker-dealers or other financial institutions which may in turn engage in short
sales of the notes or the underlying common stock and deliver these securities
to close out short positions. In addition, the selling securityholders may sell
the notes and the underlying common stock short and deliver the notes and
underlying common stock to close out short positions or loan or pledge the notes
or the underlying common stock to broker-dealers that in turn may sell such
securities.
Selling securityholders may sell or transfer their notes and shares of
common stock issuable upon conversion of the notes other than by means of this
prospectus. In particular, any securities covered by this prospectus that
qualify for sale pursuant to Rule 144 or Rule 144A under the Securities Act may
be sold thereunder, rather than pursuant to this prospectus.
The aggregate proceeds to the selling securityholders from the sale of the
notes or underlying common stock will be the purchase price of the notes or
common stock less any discounts and commissions. A selling securityholder
reserves the right to accept and, together with their agents, to reject any
proposed purchase of notes or common stock to be made directly or through
agents. We will not receive any of the proceeds from this offering.
In order to comply with the securities laws of some jurisdictions, if
applicable, the holders of notes and common stock into which the notes are
convertible may sell in some jurisdictions through registered or licensed broker
dealers. In addition, under certain circumstances in some jurisdictions, the
holders of notes and the common stock into which the notes are convertible may
be required to register or qualify the securities for sale or comply with an
available exemption from the registration and qualification requirements.
Our common stock is listed for trading on the New York Stock Exchange.
Since their initial issuance, the notes have been eligible for trading on the
PORTAL markets of the New York Stock Exchange. However, notes sold by means of
this prospectus are not expected to remain eligible for trading on the PORTAL
Market. We do not intend to list the notes for trading on any other automated
interdealer quotation system on or any securities exchange. Accordingly, we
cannot guarantee that any trading market will develop for the notes.
62
The selling securityholders and any underwriters, broker-dealers or agents
that participate in the sale of the notes and common stock into which the notes
are convertible may be deemed to be "underwriters" within the meaning of the
Securities Act. In this case, any discounts, commissions, concessions or profit
they earn on any resale of the notes or the shares of the underlying common
stock may be underwriting discounts and commissions under the Securities Act. In
addition, selling securityholders who are deemed to be "underwriters" within the
meaning of the Securities Act will be subject to the prospectus delivery
requirements of the Securities Act and may be subject to statutory liabilities,
including, but not limited to, liabilities under Sections 11, 12 and 17 of the
Securities Act.
The selling securityholders and any other persons participating in the
distribution of the notes and the underlying common stock will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder. Regulation M of the Exchange Act may limit the timing of purchases
and sales of the notes and underlying common stock by the selling
securityholders and any such other person. In addition, Regulation M may
restrict the ability of any person participating in the distribution to engage
in market-making activities with respect to the particular securities being
distributed for a period of up to five business days prior to the commencement
of the distribution. This may affect the marketability of the notes and the
underlying common stock.
If required, the specific notes or common stock to be sold, the names of
the selling securityholders, the respective purchase prices and public offering
prices, the names of any agent, dealer or underwriter and any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement of which this prospectus is a part.
We entered into a registration rights agreement for the benefit of the
holders of the notes to register the notes and common stock into which the notes
are convertible under applicable federal securities laws under specific
circumstances and specific times. Under the registration rights agreement, the
selling securityholders and we have agreed to indemnify each other and our
respective directors, officers and controlling persons against, and in certain
circumstances to provide contribution with respect to, specific liabilities in
connection with the offer and sale of the notes and the common stock, including
liabilities under the Securities Act. We will pay substantially all of the
expenses incident to the registration of the notes and the common stock, except
that the selling securityholders will pay all brokers' commissions and, in
connection with an underwritten offering, if any, underwriting discounts and
commissions. See "Notes -- Registration Rights" above.
LEGAL MATTERS
The validity of the notes and common stock underlying the notes is being
passed upon for us by Kramer Levin Naftalis & Frankel LLP, New York, New York.
EXPERTS
The consolidated financial statements of Vishay Intertechnology, Inc.
appearing in Vishay's Annual Report (Form 10-K/A) for the year ended December
31, 2002, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
63
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. The file number under the Securities Exchange Act of
1934 for our SEC filings is No. 1-07416. You may read and copy materials that we
have filed with the SEC at the SEC's public reference room located at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. Our SEC
filings also are available to the public on the SEC's web site at www.sec.gov,
which contains reports, proxies and information statements and other information
regarding issuers that file electronically.
This prospectus "incorporates by reference" information that we have filed
with or furnished to the SEC under the Exchange Act, which means that we are
disclosing important information to you by referring you to those documents. Any
statement contained in this prospectus or in any document incorporated or deemed
to be incorporated by reference into this prospectus will be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or any subsequently filed document which
also is, or is deemed to be, incorporated by reference into this prospectus
modifies or supersedes that statement. Any statement so modified or superseded
will not be deemed, except as so modified or superseded, to constitute a part of
this prospectus. We incorporate by reference into this prospectus the following
documents that we have previously filed with the SEC and any future filings that
we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act after the date of this prospectus until all of the securities covered by
this prospectus are sold by the selling securityholders:
o Our Annual Report on Form 10-K/A for the fiscal year ended December
31, 2002;
o Our Quarterly Report on Form 10-Q for the fiscal quarters ended
March 31, 2003 and June 30, 2003;
o Our Current Reports on Form 8-K filed on January 23, 2003, August 1,
2003 and August 8, 2003 and Current Report on Form 8-K/A filed on
February 26, 2003; and
o The description of our common stock set forth in our Registration
Statement on Form 8-A filed on December 27, 1983, including any
amendment or reports filed for the purpose of updating such
description.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, PA 19355
Attn: William J. Spires
(610) 644-1360
64
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses Of Issuance And Distribution
The Registrant is paying all of the expenses related to this offering. The
following table sets forth the approximate amount of fees and expenses payable
by the Registrant in connection with this Registration Statement and the
distribution of the shares of the securities being registered hereby. The
selling securityholders will bear all underwriting discounts, commissions or
fees attributable to the sale of the registrable securities.
SEC registration fee $40,450.00
Legal fees and expenses $75,000.00
Accounting fees and expenses $25,000.00
Printing and engraving expenses $50,000.00
Miscellaneous $9,550.00
---------------
Total $200,000.00
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of Vishay, and, in any criminal proceeding, if such person had no
reasonable cause to believe his conduct was unlawful; provided that, in the case
of actions brought by or in the right of Vishay, no indemnification shall be
made with respect to any matter as to which such person shall have been adjudged
to be liable to Vishay unless and only to the extent that the adjudicating court
determines that such indemnification is proper under the circumstances.
Vishay's certificate of incorporation provides that every person who is or
was a director, officer, employee or agent of Vishay or of any other company,
including another corporation, partnership, joint venture, trust or other
enterprise which such person serves or served as such at Vishay's request shall
be indemnified by Vishay against all judgments, payments in settlement, fines,
penalties, and other reasonable costs and expenses resulting from any action,
proceeding, investigation or claim which is brought or threatened by or in the
right of Vishay or by anyone else by reason of such person being or having been
a director, officer, employee or agent of Vishay or any act or omission of such
person in such capacity. Such indemnification shall be available either if such
person is wholly successful in defending such action or if, in the judgment of a
court or the Board of Directors of Vishay or in the opinion of independent legal
counsel, in the case of a derivative action, such person acted without
negligence or misconduct in the performance of his duty to Vishay or in the case
of a third-party action, such person acted in good faith in what he reasonably
believed to be in the best interests of Vishay and was not adjudged liable to
the corporation, and, in any criminal action, had no reasonable cause to believe
that his action was unlawful. In the case of a derivative action, such
indemnification shall not be made other than in respect of a court approved
settlement or if, in the opinion of independent counsel, the person satisfied
the standard of conduct specified in the prior sentence, the action was without
substantial merit, the settlement was in the best interest of Vishay and the
payment is permissible under applicable law. Directors may authorize the
advancement of reasonable costs and expenses in connection with any such
II-1
action to the extent permitted under Delaware law. Vishay's certificate of
incorporation further provides that no director shall have any personal
liability to Vishay or to its stockholders for any monetary damages for breach
of fiduciary duty, to the extent permitted under the Delaware General
Corporation Law.
Vishay maintains $100 million of insurance to reimburse the directors and
officers of Vishay and its subsidiaries, for charges and expenses incurred by
them for wrongful acts claimed against them by reason of their being or having
been directors or officers of Vishay or any of its subsidiaries. Such insurance
specifically excludes reimbursement of any director or officer for any charge or
expense incurred in connection with various designated matters, including libel
or slander, illegally obtained personal profits, profits recovered by Vishay
pursuant to Section 16(b) of the Exchange Act and deliberate dishonesty.
Item 16. Exhibits
Exhibit No. Description
----------- -----------
4.1 Indenture, dated as of August 6, 2003, by and between Vishay
Intertechnology, Inc. and Wachovia Bank, National Association
4.2 Registration Rights Agreement, dated as of August 6, 2003, by
and among Vishay Intertechnology, Inc. and J.P. Morgan
Securities Inc., Banc of America Securities LLC and Wachovia
Capital Markets, LLC
5.1 Form of Opinion of Kramer Levin Naftalis & Frankel LLP
8.1 Form of Opinion of Kramer Levin Naftalis & Frankel LLP as to tax
matters
12.1 Statement regarding Computation of Ratio of Earnings to Fixed
Charges
23.1 Consent of Ernst & Young LLP
23.2 Consent of Kramer Levin Naftalis & Frankel LLP (included in
Exhibit 5.1 and Exhibit 8.1)
24.1 Power of Attorney (included on the signature page)
25.1 Statement of Eligibility of Wachovia Bank, National Association
to act as trustee under the Indenture under the Trust Indenture
Act of 1939
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum aggregate
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b), if,
II-2
in the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant, pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Malvern, Commonwealth of Pennsylvania, on the 4th day
of November, 2003.
VISHAY INTERTECHNOLOGY, INC.
By: /S/ FELIX ZANDMAN
------------------------------
Felix Zandman
Chairman of the Board
and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes
and appoints FELIX ZANDMAN and RICHARD N. GRUBB, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign this registration statement (including all pre-effective and
post-effective amendments thereto and all registration statements filed pursuant
to Rule 462(b) which incorporate this registration statement by reference), and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that such
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on November 4,
2003 the capacities indicated below.
SIGNATURE TITLE
--------- -----
/S/ FELIX ZANDMAN Director, Chairman of the Board, and Chief
- ----------------------------- Executive Officer (Principal Executive Officer)
DR. FELIX ZANDMAN
/S/ RICHARD N. GRUBB Executive Vice President, Treasurer and Chief
- ----------------------------- Financial Officer (Principal Financial and
RICHARD N. GRUBB Accounting Officer)
/S/ PHILLIPE GAZEAU Director
- -----------------------------
PHILLIPE GAZEAU
/S/ ELI HURVITZ Director
- -----------------------------
ELI HURVITZ
/S/ GERALD PAUL Director, President and Chief Operating Officer
- -----------------------------
GERALD PAUL
/S/ DR. ABRAHAM LUDOMIRSKI Director
- -----------------------------
DR. ABRAHAM LUDOMIRSKI
/S/ DR. EDWARD B. SHILS Director
- -----------------------------
DR. EDWARD B. SHILS
/S/ ZIV SHOSHANI Director
- -----------------------------
ZIV SHOSHANI
/S/ MARK I. SOLOMON Director
- -----------------------------
MARK I. SOLOMON
/S/ JEAN-CLAUDE TINE Director
- -----------------------------
JEAN-CLAUDE TINE
/S/ MARC ZANDMAN Director and Vice Chairman of the Board
- -----------------------------
MARC ZANDMAN
/S/ RUTA ZANDMAN Director
- -----------------------------
RUTA ZANDMAN
EXHIBIT INDEX
Exhibit Description
------- -----------
4.1 Indenture, dated as of August 6, 2003, by and between Vishay
Intertechnology, Inc. and Wachovia Bank, National Association
4.2 Registration Rights Agreement, dated as of August 6, 2003, by
and among Vishay Intertechnology, Inc. and J.P. Morgan
Securities Inc., Banc of America Securities LLC and Wachovia
Capital Markets, LLC
5.1 Form of Opinion of Kramer Levin Naftalis & Frankel LLP
8.1 Form of Opinion of Kramer Levin Naftalis & Frankel LLP as to
tax matters
12.1 Statement regarding Computation of Ratio of Earnings to Fixed
Charges
23.1 Consent of Ernst & Young LLP
23.2 Consent of Kramer Levin Naftalis & Frankel LLP (included in
Exhibit 5.1 and Exhibit 8.1)
24.1 Power of Attorney (included on the signature page)
25.1 Statement of Eligibility of Wachovia Bank, National
Association to act as trustee under the Indenture under the
Trust Indenture Act of 1939
Exhibit 4.1
VISHAY INTERTECHNOLOGY, INC.
and
WACHOVIA BANK, NATIONAL ASSOCIATION
as Trustee
3 5/8% Convertible Subordinated Notes due 2023
---------------------
INDENTURE
---------------------
Dated as of August 6, 2003
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions...................................................1
SECTION 1.02. Other Definitions.............................................6
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.............7
SECTION 1.04. Rules of Construction.........................................7
ARTICLE 2
THE CONVERTIBLE SUBORDINATED NOTES
SECTION 2.01. Form..........................................................8
SECTION 2.02. Execution and Authentication..................................9
SECTION 2.03. Registrar, Paying Agent and Conversion Agent..................9
SECTION 2.04. Paying Agent to Hold Money in Trust..........................10
SECTION 2.05. Holder Lists.................................................10
SECTION 2.06. Transfer and Exchange........................................10
SECTION 2.07. Replacement Convertible Subordinated Notes...................12
SECTION 2.08. Outstanding Convertible Subordinated Notes...................13
SECTION 2.09. When Treasury Convertible Subordinated Notes Disregarded.....13
SECTION 2.10. Temporary Convertible Subordinated Notes.....................13
SECTION 2.11. Cancellation.................................................14
SECTION 2.12. Defaulted Interest...........................................14
SECTION 2.13. CUSIP Number.................................................15
SECTION 2.14. Restrictions on Transfer.....................................15
ARTICLE 3
COVENANTS
SECTION 3.01. Payments on the Notes........................................16
SECTION 3.02. Commission and Other Reports.................................16
SECTION 3.03. Compliance Certificate.......................................16
SECTION 3.04. Maintenance of Office or Agency..............................17
SECTION 3.05. Continued Existence..........................................17
SECTION 3.06. Appointments to Fill Vacancies in Trustee's Office...........17
SECTION 3.07. Stay, Extension and Usury Laws...............................17
SECTION 3.08. Taxes........................................................18
SECTION 3.09. Investment Company Act.......................................18
SECTION 3.10. Delivery of Certain Information..............................18
i
ARTICLE 4
REDEMPTION AND PURCHASE
SECTION 4.01. Right to Redeem; Notices to Trustee..........................18
SECTION 4.02. Selection of Notes to Be Redeemed............................19
SECTION 4.03. Notice of Redemption.........................................19
SECTION 4.04. Effect of Notice of Redemption...............................20
SECTION 4.05. Deposit of Redemption Price..................................20
SECTION 4.06. Notes Redeemed in Part.......................................21
SECTION 4.07. Arrangement on Call for Redemption...........................21
SECTION 4.08. Purchase of Notes at the Option of the Holders...............21
SECTION 4.09. Repurchase at the Option of Holders Upon Fundamental
Change.......................................................27
SECTION 4.10. Effect of Purchase Notice or Fundamental Change
Repurchase Notice............................................35
SECTION 4.11. Deposit of Purchase Price or Fundamental Change
Repurchase Price.............................................36
SECTION 4.12. Notes Purchased in Part......................................36
SECTION 4.13. Covenant to Comply with Securities Laws upon Purchase of
Convertible Subordinated Notes...............................37
SECTION 4.14. Repayment to the Company.....................................37
ARTICLE 5
SUCCESSORS
SECTION 5.01. Company May Consolidate, etc., Only on Certain Terms.........37
SECTION 5.02. Successor Corporation Substituted............................38
SECTION 5.03. Repurchase at the Option of Holders upon Fundamental
Change.......................................................38
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default............................................39
SECTION 6.02. Acceleration.................................................40
SECTION 6.03. Other Remedies...............................................41
SECTION 6.04. Waiver of Past Defaults......................................41
SECTION 6.05. Control by Majority..........................................41
SECTION 6.06. Limitation on Suits..........................................41
SECTION 6.07. Rights of Holders to Receive Payment.........................42
SECTION 6.08. Collection Suit by Trustee...................................42
SECTION 6.09. Trustee May File Proofs of Claim.............................42
SECTION 6.10. Priorities...................................................42
SECTION 6.11. Undertaking for Costs........................................43
ii
ARTICLE 7
THE TRUSTEE
SECTION 7.01. Duties of the Trustee........................................43
SECTION 7.02. Rights of the Trustee........................................44
SECTION 7.03. Individual Rights of the Trustee.............................46
SECTION 7.04. Trustee's Disclaimer.........................................46
SECTION 7.05. Notice of Defaults...........................................46
SECTION 7.06. Reports by the Trustee to Holders............................46
SECTION 7.07. Compensation and Indemnity...................................47
SECTION 7.08. Replacement of the Trustee...................................48
SECTION 7.09. Successor Trustee by Merger, etc.............................49
SECTION 7.10. Eligibility, Disqualification................................49
SECTION 7.11. Preferential Collection of Claims Against Company............49
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01. Discharge of Indenture.......................................49
SECTION 8.02. Deposited Monies to Be Held in Trust by Trustee..............50
SECTION 8.03. Paying Agent to Repay Monies Held............................50
SECTION 8.04. Return of Unclaimed Monies...................................50
SECTION 8.05. Reinstatement................................................51
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without the Consent of Holders...............................51
SECTION 9.02. With the Consent of Holders..................................52
SECTION 9.03. Compliance with the Trust Indenture Act......................53
SECTION 9.04. Revocation and Effect of Consents............................53
SECTION 9.05. Notation on or Exchange of Convertible Subordinated
Notes........................................................54
SECTION 9.06. Trustee Protected............................................54
ARTICLE 10
GENERAL PROVISIONS
SECTION 10.01. Trust Indenture Act Controls.................................54
SECTION 10.02. Notices......................................................54
SECTION 10.03. Communication by Holders with Other Holders..................55
SECTION 10.04. Certificate and Opinion as to Conditions Precedent...........55
SECTION 10.05. Statements Required in Certificate or Opinion................55
SECTION 10.06. Rules by Trustee and Agents..................................56
iii
SECTION 10.07. Legal Holidays...............................................56
SECTION 10.08. No Recourse Against Others...................................57
SECTION 10.09. Counterparts.................................................57
SECTION 10.10. Other Provisions.............................................57
SECTION 10.11. Governing Law................................................57
SECTION 10.12. No Adverse Interpretation of Other Agreements................58
SECTION 10.13. Successors...................................................58
SECTION 10.14. Severability.................................................58
SECTION 10.15. Table of Contents, Headings, etc.............................58
ARTICLE 11
CONVERSION OF CONVERTIBLE SUBORDINATED NOTES
SECTION 11.01. Right to Convert.............................................58
SECTION 11.02. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or
Dividends....................................................58
SECTION 11.03. Cash Payments in Lieu of Fractional Shares...................61
SECTION 11.04. Conversion Price.............................................61
SECTION 11.05. Adjustment of Conversion Price...............................61
SECTION 11.06. Effect of Reclassification, Consolidation, Merger or
Sale.........................................................69
SECTION 11.07. Taxes on Shares Issued.......................................70
SECTION 11.08. Reservation of Shares; Shares to Be Fully Paid; Listing
of Common Stock..............................................70
SECTION 11.09. Responsibility of Trustee....................................71
SECTION 11.10. Notice to Holders Prior to Certain Actions...................71
SECTION 11.11. Restriction on Common Stock Issuable Upon Conversion.........72
ARTICLE 12
CONVERSION EVENTS
SECTION 12.01. Conversion Upon Satisfaction of Sale Price Condition.........73
SECTION 12.02. Conversion Based on Trading Price of the Notes...............73
SECTION 12.03. Conversion Upon Credit Rating Event..........................74
SECTION 12.04. Conversion Upon Notice of Redemption.........................74
SECTION 12.05. Conversion Upon Specified Corporate Transactions.............74
SECTION 12.06. Notification of Right to Convert.............................75
ARTICLE 13
SUBORDINATION
SECTION 13.01. Notes Subordinate to Senior Indebtedness.....................75
SECTION 13.02. No Payments in Certain Circumstances; Payment Over of
Proceeds upon Dissolution, Etc...............................76
SECTION 13.03. Trustee to Effectuate Subordination..........................78
iv
SECTION 13.04. No Waiver of Subordination Provisions........................78
SECTION 13.05. Notice to Trustee............................................79
SECTION 13.06. Reliance on Judicial Order of Certificate of Liquidating
Agent........................................................79
SECTION 13.07. Trustee Not Fiduciary for Holders of Senior Indebtedness.....80
SECTION 13.08. Reliance by Holders of Senior Indebtedness on
Subordination Provisions.....................................80
SECTION 13.09. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.............................80
SECTION 13.10. Article Applicable to Paying Agents..........................80
SECTION 13.11. Certain Conversions and Repurchases Deemed Payment...........81
EXHIBIT A: FORM OF NOTE
EXHIBIT B: FORM OF RESTRICTED COMMON STOCK LEGEND
EXHIBIT C: FORM OF TRANSFER CERTIFICATE FOR TRANSFER OF RESTRICTED
COMMON STOCK
v
CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
- ----------- -------
310(a)(1)............................................ 8.10
(a)(2)............................................ 8.10, 11.10
(a)(3)............................................ n/a
(a)(4)............................................ n/a
(a)(5)............................................ n/a
(b)............................................... 8.08, 8.10, 11.02
(c)............................................... n/a
3.11(a).............................................. 8.11
(b)............................................... 8.11
(c)............................................... n/a
312(a)............................................... 2.05
(b)............................................... 11.03
(c)............................................... n/a
313(a)............................................... 8.06
(b)(1)............................................ n/a
(c)............................................... 8.06, 11.02
(d)............................................... 8.06
314(a)............................................... 3.02, 11.02
(b)............................................... n/a
(c)(1)............................................ 11.04
(c)(2)............................................ 11.04
(c)(3)............................................ n/a
(d)............................................... n/a
(e)............................................... 11.05
315(a)............................................... 8.01(b)
(b)............................................... 8.05, 11.02
(c)............................................... 8.01(a)
(d)............................................... 8.01(c)
(e)............................................... 7.11
316(a)(last sentence)................................ 2.09
(a)(1)(A)......................................... 7.05
(a)(1)(B)......................................... 7.04
(a)(2)............................................ n/a
(b)............................................... 7.07
(c)............................................... 10.04
vi
317(a)(1)............................................ 7.08
(a)(2)............................................ 7.09
(b)............................................... 2.04
318(a)............................................... 11.01
(b)............................................... n/a
(c)............................................... 11.01
- -----------------
"n/a" means not applicable.
*This Cross-Reference Table shall not, for any purpose, be deemed to be a part
of the Indenture.
vii
THIS INDENTURE, dated as of August 6, 2003, is between Vishay
Intertechnology, Inc., a Delaware corporation (the "Company"), and Wachovia
Bank, National Association, a national banking institution incorporated under
the laws of the United States of America (the "Trustee"). The Company has duly
authorized the creation of its 3 5/8% Convertible Subordinated Notes due 2023
(the "Convertible Subordinated Notes" or the "Notes"), and to provide therefor
the Company and the Trustee have duly authorized the execution and delivery of
this Indenture. Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders from time to time of the
Notes:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.
"Additional Amounts" shall be as set forth in paragraph 16 of the Note,
the form of which is attached as Exhibit A hereto, qualified by reference to,
and is subject in its entirety to, the more complete description thereof
contained in the Registration Rights Agreement.
"Affiliate" of any specified person means any other person directly or
indirectly controlling, controlled by, or under direct or indirect common
control of 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 management or 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 of the foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Agent Member" means any member of, or participant in, the Depositary.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"Capital Stock" of any person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such person, but excluding any debt
securities convertible into such equity.
"Class B Common Stock" shall mean the shares of Class B common stock,
$0.10 par value per share, of the Company as it exists on the date of this
Indenture or any shares of Capital Stock of the Company into which the Class B
Common Stock shall be reclassified or changed.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at the time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
1
"Common Stock" shall mean the shares of common stock (other than the Class
B Common Stock), $0.10 par value per share, 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 such above until a successor replaces
it in accordance with Article 5 and thereafter means the successor. References
to the Company shall not include any Subsidiary.
"Continuing Director" means a director who either was a member of the
Board of Directors on July 31, 2003 or who becomes a member of the Board of
Directors subsequent to that date and whose election, appointment or nomination
for election by the stockholders of the Company is duly approved by a majority
of the Continuing Directors on the Board of Directors at the time of such
approval, either by a specific vote or by approval of the proxy statement issued
by the Company on behalf of the Board of Directors in which such individual is
named as nominee for director.
"Conversion Price" shall be as specified in paragraph 9 of the Note, the
form of which is attached hereto as Exhibit A, as adjusted in accordance with
the provisions of Article 11.
"Conversion Rate" shall have the meaning set forth in Article 12 and
paragraph 9 of the Note, the form of which is attached hereto as Exhibit A,
subject to adjustment in accordance with the provisions of Article 11.
"Convertible Subordinated Notes" or the "Notes" means the 3 5/8%
Convertible Subordinated Notes due 2023 issued, authenticated and delivered
pursuant to this Indenture.
"Corporate Trust Office" or other similar term means the corporate trust
office of the Trustee at which at any particular time the trust created by this
Indenture shall principally be administered; as of the date hereof, the
Corporate Trust Office is located at 123 South Broad Street, Philadelphia,
Pennsylvania, 19109, Attention: Corporate Trust Administration, PA1249,
Facsimile: (215) 670-6340.
"Credit Agreement" means the Amended and Restated Long Term Revolving
Credit Agreement, dated as of June 1, 1999, as amended, between the Company,
Comerica Bank, as administrative agent, and the lenders named therein, as the
same may be modified, amended, restated or refinanced from time to time.
"Default" means any event that is, or after notice or passage of time, or
both, would be, an Event of Default.
"Depositary" means, with respect to any Global Securities, a clearing
agency that is registered as such under the Exchange Act and is designated by
the Company to act as Depositary for such Global Securities (or any successor
securities clearing agency so registered), which shall initially be DTC.
"DTC" means The Depository Trust Company, a New York corporation.
2
"ex-dividend date" shall have the meaning set forth in Article 12 hereof
and paragraph 9 of the Note, the form of which is attached hereto as Exhibit A.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect from time to time.
"Global Securities Legend" means the legend labeled as such and that is
set forth in Exhibit A hereto.
"Holder" means a person in whose name the Notes are registered on the
Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Initial Purchasers" means J.P. Morgan Securities Inc., Banc of America
Securities LLC, Wachovia Capital Markets, LLC. and the other Initial
Purchasers named in the Purchase Agreement.
"Interest Payment Date" means February 1 and August 1 of each year,
beginning February 1, 2004.
"Market Price" means the average of the last reported sale prices of the
shares of Common Stock for the five day trading period ending on the third
trading day prior to the applicable Purchase Date, Fundamental Change Repurchase
Date or Conversion Date, as the case may be, 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, Fundamental Change Repurchase Date or Conversion Date, as the case may be,
of any event described in Section 11.05; subject, however, to the conditions set
forth in Section 11.05.
"Material Subsidiary" means a Subsidiary of the Company, including such
Subsidiary's subsidiaries, which meets any of the following conditions:
(i) the Company and its other Subsidiaries' investments in and advances
to such Subsidiary exceed 5% of the total assets of the Company and its
Subsidiaries consolidated as of the end of the most recently completed fiscal
year; or
(ii) the Company and its other Subsidiaries' proportional share of the
total assets (after intercompany eliminations) of such Subsidiary exceeds 5% of
the total assets of the Company and its Subsidiaries consolidated as of the end
of the most recently completed fiscal year; or
3
(iii) the Company and its other Subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items and cumulative
effect of a change in accounting principle of such Subsidiary exceeds 5% of such
income of the Company and its Subsidiaries consolidated as of the end of the
most recently completed fiscal year.
"Maturity Date" means August 1, 2023.
"Offering Memorandum" means the final offering memorandum, dated July 31,
2003, relating to the Notes, including any supplements and amendments thereto.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Financial Officer, the Chief Accounting Officer, any
Executive Vice President, Senior Vice President or Vice President (whether or
not designated by a number or numbers or word or words before or after the title
"Vice President"), the Treasurer, the Secretary and any Assistant Treasurer or
any Assistant Secretary of the Company.
"Officer's Certificate" means a certificate signed by an Officer of the
Company.
"Opinion of Counsel" means a written opinion from legal counsel, who may
be an employee of or counsel to the Company or the Trustee, except to the extent
otherwise indicated in this Indenture.
"Permitted Junior Securities" means securities of the Company or any other
corporation that are equity securities or are subordinated in right of payment
to all Senior Indebtedness that may at the time be outstanding to substantially
the same extent as, or to a greater extent than, the Notes are subordinated as
provided in Article 13.
"Permitted Holder" means each of Dr. Felix Zandman or his wife, children
or lineal descendants, the Estate of Mrs. Luella B. Slaner or her children or
lineal descendants, any trust established for the benefit of such persons, or
any "person" (as such term is used in Section 13(d) or 14(d) of the Exchange
Act), directly or indirectly, controlling, controlled by or under common control
with any such person mentioned in this paragraph or any trust established for
the benefit of such persons or any charitable trust or non-profit entry
established by a Permitted Holder, or any group in which such Permitted Holders
hold more than a majority of the voting power of the Common Stock and Class B
Common Stock deemed to be beneficially owned by such group.
A "person" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization, limited liability company or
government or any agency or political subdivision thereof.
"Premium" means any premium payable under the terms of the Notes.
"Purchase Agreement" means the Purchase Agreement related to the Notes,
dated July 31, 2003, between the Company and the Initial Purchasers.
"Qualified Institutional Buyer" has the meaning assigned to that term in
Rule 144A under the Securities Act
4
"Purchase Date" means August 1, 2008, August 1, 2010, August 1, 2013 and
August 1, 2018, as applicable, as specified in the relevant Purchase Notice.
"Redemption Date" means the business day specified for redemption of the
Notes in accordance with the terms of the Notes and this Indenture, as set forth
in a notice of redemption.
"Registration Rights Agreement" means the Registration Rights Agreement
relating to the Notes and the Common Stock issuable upon conversion of such
Notes, dated August 6, 2003, between the Company and the Initial Purchasers, as
such agreement may be amended, modified or supplemented from time to time.
"Regular Record Date" means the January 15 or July 15 immediately
preceding each Interest Payment Date.
"Restricted Common Stock Legend" means the legend labeled as such and that
is set forth in Exhibit B hereto.
"Restricted Securities Legend" means the legend labeled as such and that
is set forth in Exhibit A hereto.
"Rule 144" means Rule 144 promulgated under the Securities Act and any
successor rule or regulation of the Securities and Exchange Commission.
"Rule 144A means Rule 144A promulgated under the Securities Act and any
successor rule or regulation of the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Senior Indebtedness" means, without duplication, the principal of (and
premium, if any) and unpaid interest on all present and future (i) indebtedness
of the Company for borrowed money including, without limitation, under the
Credit Agreement and whether secured or unsecured, (ii) obligations of the
Company evidenced by bonds, debentures, notes or similar instruments, (iii)
obligations of the Company under (a) interest rate swaps, caps, collars, options
and similar arrangements, (b) any foreign exchange contract, currency swap
contract, futures contract, currency option contract, or other foreign currency
hedge or any other hedging arrangements, and (c) credit swaps, caps, floors,
collars and similar arrangements, (iv) indebtedness incurred, assumed or
guaranteed by the Company in connection with the acquisition by it or a
Subsidiary of any business, properties or assets (except purchase-money
indebtedness classified as accounts payable under generally accepted accounting
principles), (v) obligations of the Company as lessee under leases required to
be capitalized on the balance sheet of the lessee under generally accepted
accounting principles, (vi) reimbursement obligations of the Company in respect
of letters of credit, banker's acceptances, security purchase facilities or
similar credit transactions relating to indebtedness or other obligations of the
Company that qualify as indebtedness or obligations of the kind referred to in
clauses (i) through (v) above, (vii) pension plan obligations, and (viii)
obligations of the Company under direct or indirect guarantees or to which the
Company is liable as an obligor, surety or otherwise in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a
5
creditor against loss in respect of, indebtedness or obligations of others of
the kinds referred to in clauses (i) through (vii) above, in each case unless in
the instrument creating or evidencing the indebtedness or obligation or pursuant
to which the same is outstanding it is provided that such indebtedness or
obligation is subordinate to or ranks pari passu in right of payment to the
Notes and provided, however, that the Notes shall rank pari passu in right of
payment to the Company's Liquid Yield OptionTM Notes (LYONs) due 2021.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.
A "Subsidiary" means, with respect to any person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other subsidiaries of that person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or managing
general partner of which is such person or a Subsidiary of such person or (b)
the only general partners of which are such person or of one or more
subsidiaries of such person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-
77bbbb) as in effect on the date of execution of this Indenture, except as
provided in Sections 10.03 and 12.07.
"trading price" shall have the meaning specified in Article 12 hereof and
paragraph 9 of the Note, the form of which is attached hereto as Exhibit A.
"Trust 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, assistant treasurer,
trust officer or any other officer of the Trustee who customarily 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 having direct responsibility for the administration of this
Indenture.
"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor.
SECTION 1.02. Other Definitions.
Defined in
Section
-------
"Bankruptcy Law"............................................. 6.01(g)
"business day"............................................... 10.07
"Company's Notice"........................................... 4.08(h)
"Company's Notice Date"...................................... 4.08(h)
"Conversion Agent"........................................... 2.03
"Conversion Date"............................................ 11.02(d)
"Current Market Price"....................................... 11.05(g)(1)
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"Custodian".................................................. 6.01(g)
"Event of Default"........................................... 6.01
"Expiration Time"............................................ 11.05(f)
"fair market value".......................................... 11.05(g)(2)
"Fundamental Change"......................................... 4.09(a)
"Fundamental Change Date".................................... 4.09(b)
"Fundamental Change Notice".................................. 4.09(b)
"Fundamental Change Offer"................................... 4.09(b)
"Fundamental Change Offer Termination Date".................. 4.09(c)
"Fundamental Change Repurchase Date"......................... 4.09(b)
"Fundamental Change Repurchase Notice"....................... 4.09(d)
"Fundamental Change Repurchase Price"........................ 4.09(b)
"Global Security"............................................ 2.01(a)
"Investment Company Act"..................................... 3.09
"last reported sale price"................................... 11.05(g)(3)
"non-electing share"......................................... 11.06
"Paying Agent"............................................... 2.03
"Purchase Notice"............................................ 4.08(a)(i)
"Purchase Price"............................................. 4.08(a)
"Purchased Shares"........................................... 11.05(f)(ii)
"Record Date"................................................ 11.05(g)(4)
"Redemption Price"........................................... 4.01(a)
"Register"................................................... 2.03
"Registrar".................................................. 2.03
"Rule 144A Information"...................................... 3.10
"Securities"................................................. 11.05(d)
"Special Record Date"........................................ 2.12(b)
"trading day"................................................ 11.05(g)(5)
"Trigger Event".............................................. 11.05(d)
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. All other terms
in this Indenture that are defined by the TIA, defined by TIA reference to
another statute or defined by Commission rule under the TIA have the meanings so
assigned to them.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(c) "or" is not exclusive;
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(d) words in the singular include the plural, and in the plural include
the singular; and
(e) the male, female and neuter genders include one another.
ARTICLE 2
THE CONVERTIBLE SUBORDINATED NOTES
SECTION 2.01. Form.
(a) The Notes are being offered and sold by the Company pursuant to the
Purchase Agreement. The Notes are being offered and sold to Qualified
Institutional Buyers in reliance on Rule 144A, pursuant to the Purchase
Agreement and shall be issued in the form of one or more permanent global
securities in definitive, fully registered form without interest coupons with
the Global Securities Legend and Restricted Securities Legend as set forth in
Exhibit A hereto (each, a "Global Security"). Any Global Security shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Trustee, as custodian for the Depositary, and registered in the name of the
Depositary or a nominee of the Depositary for the accounts of participants in
the Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of a Global Security may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depositary or its nominee as hereinafter provided.
(b) This Section 2.01(b) shall apply only to a Global Security deposited
with or on behalf of the Depositary. The Company shall execute and the Trustee
shall, in accordance with this Section 2.01(b) and the written order of the
Company, authenticate and deliver initially one or more Global Securities that
(i) shall be registered in the name of Cede & Co. or other nominee of such
Depositary and (ii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions or held by the Trustee as custodian
for the Depositary.
Agent Members shall have no rights under this Indenture with respect to
any Global Security held on their behalf by the Depositary or by the Trustee as
the custodian of the Depositary or under such Global Security, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner 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 impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
(c) Except as provided in Section 2.10, owners of beneficial interests in
Global Securities will not be entitled to receive physical delivery of
certificated Notes in definitive form. If applicable, certificated Notes in
definitive form will bear the Restricted Securities Legend set forth on Exhibit
A unless removed in accordance with Section 2.06(f).
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SECTION 2.02. Execution and Authentication.
One Officer shall sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at
the time the Note is authenticated and delivered by the Trustee, the Note shall
nevertheless be valid as though the person who signed such Note had not ceased
to be such Officer.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
Upon a written order of the Company signed by an Officer of the Company,
the Trustee shall authenticate Notes for original issue up to an aggregate
principal amount of $450,000,000 (plus up to an additional $50,000,000 aggregate
principal amount of Notes that may be sold by the Company to the Initial
Purchasers pursuant to the option granted pursuant to the Purchase Agreement).
The aggregate principal amount of Notes outstanding at any time may not exceed
$500,000,000, except as provided in Section 2.07.
The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 or any integral multiple thereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same right as an Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.03. Registrar, Paying Agent and Conversion Agent.
The Company shall maintain or cause to be maintained in such locations as
it shall determine, which may be the Corporate Trust Office, an office or
agency: (i) where securities may be presented for registration of transfer or
for exchange ("Registrar"); (ii) where Notes may be presented for payment
("Paying Agent"); (iii) an office or agency where Notes may be presented for
conversion (the "Conversion Agent"); and (iv) where notices and demands to or
upon the Company in respect of Notes and this Indenture may be served by the
Holders. The Registrar shall keep a Register ("Register") of the Notes and of
their transfer and exchange. The Company may appoint one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents. The term "Registrar" includes any additional registrar, the term "Paying
Agent" includes any additional paying agent and the term "Conversion Agent"
includes any additional Conversion Agent. The Company may change any Paying
Agent, Registrar, Conversion Agent or co-registrar without prior notice. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture and shall enter into an appropriate agency agreement
with any Registrar, Paying Agent, Conversion Agent or co-registrar not a party
to this Indenture. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company or any of its subsidiaries may
act as Paying Agent, Registrar, Conversion Agent or co-registrar, except that
for purposes of Article 6 and Section 4.09, neither the Company nor any of its
subsidiaries shall act as Paying Agent. If the
9
Company fails to appoint or maintain another entity as Registrar, or Paying
Agent or Conversion Agent, the Trustee shall act as such, and the Trustee shall
initially act as such.
SECTION 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent (other than the Trustee, who
hereby so agrees) to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Trustee all money held by the Paying Agent for
the payment of principal of, interest or Additional Amounts, if any, on, or the
Redemption Price, Purchase Price or Fundamental Change Repurchase Price for, the
Notes, and will notify the Trustee of any default by the Company in respect of
making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent shall have no
further liability for the money. If the Company or a Subsidiary of the Company
acts as Paying Agent, it shall segregate and hold in a separate trust fund for
the benefit of the Holders all money held by it as Paying Agent.
SECTION 2.05. Holder 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
Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee at least seven business
days before each Interest Payment Date, and as the Trustee may request in
writing within fifteen (15) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form and as of such date as the Trustee may reasonably require of the
names and addresses of Holders.
SECTION 2.06. Transfer and Exchange.
(a) When Notes are presented to the Registrar or a co-registrar with a
request to register a transfer or to exchange them for an equal principal amount
of Notes for other denominations, the Registrar shall register the transfer or
make the exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Company shall issue and the
Trustee shall authenticate Notes at the Registrar's request, bearing
registration numbers not contemporaneously outstanding. No service charge shall
be made to a Holder for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company and the Registrar may
require payment of a sum sufficient to cover any transfer tax or other
governmental charge payable upon exchanges from the Holder requesting such
registration of transfer or exchange.
(b) The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of any Notes selected for redemption (except,
in the case of Notes to be redeemed in part, the portion thereof not to be
redeemed) or any Notes in respect of which a Purchase Notice or Fundamental
Change Repurchase Notice has been given and not withdrawn by the Holder thereof
in accordance with the terms of this Indenture (except, in the case of Notes to
be purchased in part, the portion thereof not to be purchased).
10
(c) All Notes issued upon any transfer or exchange of Notes in accordance
with this Indenture shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture as the
Notes surrendered upon such registration of transfer or exchange.
(d) 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 only be
made in accordance with Sections 2.01(b) and 2.10; provided, however, that,
subject to 2.01(b), beneficial interests in a Global Security may be transferred
to persons who take delivery thereof in the form of a beneficial interest in the
Global Security in accordance with the transfer restrictions set forth under the
heading "Notice to Investors" in the Offering Memorandum and, if applicable, in
the Restricted Securities Legend.
Except for transfers or exchanges made in accordance with Section 2.10,
transfers of a Global Security shall be limited to transfers of such Global
Security in whole, but not in part, to nominees of the Depositary or to a
successor of the Depositary or such successor's nominee.
(e) In the event that a Global Security is exchanged for certificated
Notes in definitive form pursuant to Section 2.10(b) prior to the effectiveness
of a Shelf Registration Statement with respect to such Notes, such exchange may
occur, and such Notes may be further exchanged or transferred, only upon receipt
by the Registrar of (1) such Global Security or such Notes in definitive form,
duly endorsed as provided herein, as applicable, (2) instructions from the
Holder directing the Trustee to authenticate and deliver one or more Notes in
definitive form of the same aggregate principal amount as the Global Security or
the Notes in definitive form (or portion thereof), as applicable, to be
transferred, such instructions to contain the name or names of the designated
transferee or transferees, the authorized denomination or denominations of the
Notes in definitive form to be so issued and appropriate delivery instructions,
and (3) such certifications or other information and, in the case of transfers
pursuant to Rule 144 or any other exemption from registration under the
Securities Act (other than a transfer to a Qualified Institutional Buyer
pursuant to Rule 144A), legal opinions as the Company may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
(including the certification requirements intended to ensure that such transfers
comply with Rule 144A), and upon compliance with such other procedures as may
from time to time be adopted by the Company and the Registrar.
(f) Except in connection with a Shelf Registration Statement contemplated
by and in accordance with the terms of the Registration Rights Agreement, if
Notes are issued upon the registration of transfer, exchange or replacement of
Notes bearing a Restricted Securities Legend, or if a request is made to remove
such a Restricted Securities Legend on the Notes, the Notes so issued shall bear
the Restricted Securities Legend, or a Restricted Securities Legend shall not be
removed, as the case may be, unless there is delivered to the Company such
satisfactory evidence, which, in the case of a transfer made pursuant to Rule
144 or any other exemption from registration under the Securities Act (other
than a transfer to a Qualified Institutional Buyer pursuant to Rule 144A), may
include an opinion of counsel, as may be reasonably required by the Company,
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
11
144A or Rule 144 or that such Notes are not "restricted" within the meaning of
Rule 144. Upon provision to the Company of such satisfactory evidence, the
Trustee, at the written direction of the Company, shall authenticate and deliver
Notes that do not bear the legend. The Company shall not otherwise be entitled
to require the delivery of a legal opinion in connection with any transfer or
exchange of Securities.
(g) Neither the Trustee nor any Agent shall have any responsibility for
any actions taken or not taken by the Depositary.
(h) The Trustee 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 Notes (including any transfers between or among the Depositary's
participants or beneficial owners of interests in any Global Security) other
than to require delivery of such certificates and other documentation as is
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 Convertible Subordinated Notes.
(a) If a mutilated Note is surrendered to the Trustee or if the Holder
claims that its Note has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate and deliver a replacement Note in
exchange for any such mutilated Note or in lieu of any such lost or destroyed or
stolen Note if the Trustee's and the Company's requirements are met. If required
by the Trustee or the Company as a condition of receiving a replacement Note,
the Holder must provide a certificate of loss and an indemnity and/or an
indemnity bond sufficient, in the judgment of both the Company and the Trustee,
to fully protect the Company, the Trustee, any Agent and any authenticating
agent from any loss, liability, cost or expense which any of them may suffer or
incur if the Note is replaced. The Company and the Trustee may charge the
relevant Holder for their expenses in replacing any Note.
(b) The Trustee or any authenticating agent may authenticate any such
substituted Note, and deliver the same upon the receipt of such security or
indemnity as the Trustee and the Company may require. Upon the issuance of any
substituted Note, the Company and the Trustee 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 connected therewith. In case any Note
which has matured or is about to mature, submitted for redemption or repurchase
pursuant to Article 4 or is about to be converted into Common Stock pursuant to
Articles 11 and 12, shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Note, pay or authorize the payment
of or convert or authorize the conversion of the same (without surrender thereof
except in the case of a mutilated Note), as the case may be, if the applicant
for such payment or conversion shall furnish to the Company, to the Trustee and,
if applicable, to the paying agent or conversion agent such security or
indemnity as may be required by the Company or the Trustee to save each of them
harmless for any loss, liability, cost or expense caused by or connected with
such substitution, and, in case of destruction, loss or theft, evidence
satisfactory to the Company, the Trustee and, if applicable, any paying agent or
conversion agent of the destruction, loss or theft of such Note and of the
ownership thereof.
12
(c) Every replacement Note is an additional obligation of the Company and
shall be entitled to all the benefits provided under this Indenture equally and
proportionately with all other Notes duly issued, authenticated and delivered
hereunder.
SECTION 2.08. Outstanding Convertible Subordinated Notes.
The Notes outstanding at any time are all the Notes properly authenticated
by the Trustee except for those cancelled by the Trustee, those delivered to it
for cancellation, and those described in this Section as not outstanding.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be
outstanding upon surrender of such Note and replacement thereof pursuant to
Section 2.07.
If Notes are considered paid under Section 3.01 or converted pursuant to
Articles 11 and 12, they cease to be outstanding, and interest and Additional
Amounts, if any, on them ceases to accrue.
Subject to Section 2.09 hereof, a Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Note.
SECTION 2.09. When Treasury Convertible Subordinated Notes Disregarded.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or an Affiliate of the Company shall be considered as though they are
not outstanding except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which a Trust Officer of the Trustee actually knows are so owned shall be
so disregarded.
SECTION 2.10. Temporary Convertible Subordinated Notes.
(a) In the event that definitive Notes are to be issued under the terms of
this Indenture, until such definitive Notes are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Notes (printed or
lithographed). Temporary Notes shall be substantially in the form of definitive
Notes but may have variations that the Company considers appropriate for
temporary Notes and shall be reasonably acceptable to the Trustee. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate
definitive Notes in exchange for temporary Notes.
(b) A Global Security deposited with the Depositary or with the Trustee as
custodian for the Depositary pursuant to Section 2.01 shall be transferred to
the beneficial owners thereof in the form of certificated Notes in definitive
form only if such transfer complies with Section 2.06 and (i) the Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Security or (ii) at any time such Depositary ceases to be a
"clearing agency" registered under the Exchange Act and a successor Depositary
is not appointed by the Company within 90 days of such notice.
13
(c) Any Global Security or interest thereon that is transferable to the
beneficial owners thereof in the form of certificated Notes in definitive form
shall, if held by the Depository, be surrendered by the Depositary to the
Trustee, without charge, and the Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Security, an equal aggregate
principal amount of Notes of authorized denominations in the form of
certificated Notes in definitive form. Any portion of a Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depositary shall direct. Any Notes in the form
of certificated Notes in definitive form delivered in exchange for an interest
in the Global Security shall, except as otherwise provided by Section 2.06(f),
bear the Restricted Securities Legend set forth in Exhibit A hereto.
(d) Prior to any transfer pursuant to Section 2.10(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
person, including Agent Members and persons that may hold interests through
Agent Members, to take any action that a Holder is entitled to take under this
Indenture or the Notes.
SECTION 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else may cancel Notes surrendered for registration of
transfer, exchange, payment, replacement, conversion, repurchase or
cancellation. Upon written instructions of the Company, the Trustee shall
dispose of cancelled Notes in accordance with its procedures for the disposition
of cancelled securities in effect as of the date of such disposition and, after
such disposition, shall deliver a certificate of disposition to the Company. The
Company may not issue new Notes to replace Notes that it has paid or repurchased
or that have been delivered to the Trustee for cancellation or that any Holder
has (i) converted pursuant to Articles 11 and 12 hereof or (ii) submitted for
repurchase pursuant to Article 4 hereof (unless such submission is withdrawn in
accordance with the terms of this Indenture).
SECTION 2.12. Defaulted Interest.
(a) If the Company fails to make a payment of interest on the Notes, it
shall pay such defaulted interest plus, to the extent lawful, any interest
payable on the defaulted interest, as provided in Section 3.01. It may pay such
defaulted interest, plus any such interest payable on it, to the persons who are
Holders on a subsequent special record date. The Company shall fix any such
record date.
(b) The Company may elect to make payment of any defaulted interest to the
persons in whose names the Notes 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 Note and the
date of the proposed payment (which shall not be less than 20 days after such
notice is received by the Trustee unless the Trustee shall consent to an earlier
date), and at the same time the Company shall deposit with the Trustee an amount
of money equal to the aggregate
14
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 Notes at his address as it appears on the list of Holders 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 Notes are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following paragraph (c).
(c) The Company may make payment of any defaulted interest on the Notes in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which such Notes 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 2.13. CUSIP Number.
The Company in issuing the Notes may use "CUSIP" numbers and, if so, the
Trustee shall use CUSIP numbers in notices of repurchase or exchange as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company will promptly
notify the Trustee of any change in the CUSIP number.
SECTION 2.14. Restrictions on Transfer.
The Company agrees that it will refuse to register any transfer of Notes
or any shares of Common Stock issued upon conversion of Notes that is not made
pursuant to a registration statement which has been declared effective under the
Securities Act or pursuant to an available exemption from the registration
requirements of the Securities Act; provided that the provisions of this
paragraph shall not be applicable to any Notes which do not bear a Restricted
Securities Legend or to any shares of Common Stock evidenced by certificates
which do not bear a Restricted Common Stock Legend.
15
ARTICLE 3
COVENANTS
SECTION 3.01. Payments on the Notes.
The Company shall promptly pay the principal of and interest and
Additional Amounts, if any, on the Notes on the dates and in the manner provided
in the Notes or pursuant to this Indenture. Principal, interest, Additional
Amounts, if any, Redemption Price, Purchase Price and Fundamental Change
Repurchase Price, as applicable, shall be considered paid on the date due if the
Trustee or Paying Agent (other than the Company or a Subsidiary of the Company)
holds as of 11:00 a.m., New York City time, on that date immediately available
funds designated for and sufficient to pay all principal, interest, Additional
Amounts, if any, Redemption Price, Purchase Price or the Fundamental Change
Repurchase Price then due.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue principal, at the rate borne by the Notes, compounded semiannually; and
(ii) overdue installments of interest and Additional Amounts, if any (without
regard to any applicable grace period) at the same rate, compounded
semiannually.
SECTION 3.02. Commission 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 Commission, 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
Commission may by rules and regulations prescribe) which the Company is required
to file with the Commission 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 provide the
Trustee with copies of such information, documents or reports which may be
required, in accordance with rules and regulations prescribed by the Commission,
pursuant to Section 13 of the Exchange Act. In such event, such reports shall
comply with Rule 144A(d)(4) under the Securities Act. 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 Officer's
Certificates).
SECTION 3.03. 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 December
31, 2003, an Officer's Certificate stating that a review of the activities of
the Company and its subsidiaries during the preceding fiscal year has been made
under the supervision of the signing Officer with a view to determining whether
the Company has fully performed its obligations under this Indenture and
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further stating, as to such Officer signing such certificate, that to the best
of his or her knowledge, the Company is not in default in the performance or
observance of any of the terms and conditions hereof (or, if any Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge) and, that to the best of his or
her knowledge, no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest or Additional Amounts, if
any, on the Notes are prohibited.
The Company shall, so long as any of the Notes are outstanding, deliver to
the Trustee, forthwith upon becoming aware of any Default or Event of Default,
an Officer's Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
SECTION 3.04. Maintenance of Office or Agency.
The Company shall maintain or cause to be maintained the office or agency
required under Section 2.03. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency not maintained by 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, presentations, surrenders, notices and demands with
respect to the Notes may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designation.
SECTION 3.05. Continued Existence.
Subject to Article 5, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence.
SECTION 3.06. Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 7.08, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 3.07. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter enforced, that may affect the Company's
obligation to pay the Notes; and the Company (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law insofar
as such law applies to the Notes, and covenants that it shall not, by resort to
any such law, 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 has been enacted.
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SECTION 3.08. Taxes.
The Company shall, and shall cause each of its subsidiaries to, pay prior
to delinquency all taxes, assessments and government levies; provided, however,
that the Company shall not be required to pay or cause to be paid any such tax,
assessment or levy (i) if the failure to do so will not, in the aggregate, have
a material adverse impact on the Company and its subsidiaries taken as a whole,
or (ii) if the amount, applicability or validity is being contested in good
faith by appropriate proceedings.
SECTION 3.09. Investment Company Act.
As long as any Notes are outstanding, the Company will conduct its
business and operations so as not to become an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act"), and will take all steps required in order for it to continue not
to be an "investment company" and not to be required to be registered under the
Investment Company Act, including, if necessary, redeployment of the assets of
the Company.
SECTION 3.10. 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 Notes or
shares of Common Stock 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 Notes or holder of shares of Common
Stock issued upon conversion of Notes, 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 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.
ARTICLE 4
REDEMPTION AND PURCHASE
SECTION 4.01. Right to Redeem; Notices to Trustee.
(a) The Company, at its option, may redeem all or a portion of the Notes
on or after August 1, 2010 at a redemption price in cash ("Redemption Price")
equal to 100% of the principal amount thereof, plus any accrued and unpaid
interest to, but excluding, the Redemption Date.
(b) If the Company elects to redeem Notes pursuant to the terms of the
Notes and this Indenture, it shall notify the Trustee in writing of the
Redemption Date, the principal amount of Notes to be redeemed and the Redemption
Price payable on the Redemption Date. The Company shall deliver to the Trustee
the notice of redemption provided for in this Section 4.01 by means of a written
request or order signed in the name of the Company by any Officer at least 45
days before the Redemption Date (unless a shorter notice shall be satisfactory
to the Trustee). If fewer than all of the Notes are to be redeemed, the record
date relating to such redemption
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shall be selected by the Company and given to the Trustee, which record date
shall not be fewer than 15 days after the date of notice to the Trustee (unless
a shorter notice shall be satisfactory to the Trustee). Any such notice may be
cancelled at any time prior to notice of such redemption being mailed to any
Holder and shall be thereby be void and of no effect.
Selection of Notes to Be Redeemed.
(c) If less than all the Notes are to be redeemed, the Trustee shall
select the Notes 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 Notes are then listed). The
Trustee shall make the selection at least 30 days but not more than 60 days
before the Redemption Date from outstanding Notes not previously called for
redemption.
(d) Notes and portions of them the Trustee selects shall be in principal
amounts of $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption. The Trustee shall notify the Company promptly of
the amount of Notes or portions thereof to be redeemed.
(e) If any Note selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Notes so selected, the converted portion of such Notes shall be deemed (so far
as may be) to be the portion selected for redemption. Notes that have been
converted during a selection of Notes to be redeemed may be treated by the
Trustee as outstanding for the purpose of such selection.
SECTION 4.02. Notice of Redemption.
(a) At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Notes to be redeemed. The notice shall identify the
Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the then current Conversion Price;
(iv) the name and address of the Paying Agent and Conversion
Agent;
(v) that Notes called for redemption may be converted at any
time prior to the close of business on the second business day immediately
preceding the Redemption Date;
(vi) that Holders who want to convert Notes must satisfy the
requirements set forth in paragraph 9 of the Note;
(vii) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
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(viii) if fewer than all the outstanding Notes are to be redeemed,
the certificate number and principal amounts of the particular Notes to be
redeemed;
(ix) that, unless the Company defaults in making payment of such
Redemption Price, the Notes called for redemption will cease to be
outstanding and interest, including any defaulted interest and Additional
Amounts, if any, on the Notes called for redemption will cease to accrue
on and after the Redemption Date;
(x) the election of the Company (which, subject to the
provisions of Article 11 hereof, shall be irrevocable) to deliver shares
of Common Stock or to pay cash in lieu of delivery of shares of Common
Stock with respect to any Notes that may be converted after the mailing of
such notice and prior to the Redemption Date;
(xi) the CUSIP number, if any, printed on the Notes to be
redeemed; and
(xii) that all rights of the Holder will terminate on and after
the Redemption Date (other than the right to receive the Redemption Price
upon delivery or transfer of the Notes called for redemption).
(b) 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 15 days (unless a shorter period shall be
satisfactory to the Trustee) prior to the date such notice of redemption must be
mailed.
SECTION 4.03. Effect of Notice of Redemption.
Once notice of redemption is given pursuant to Section 4.03, Notes called
for redemption become due and payable on the Redemption Date and at the
Redemption Price stated in the notice of redemption, except for Notes which are
converted in accordance with the terms of this Indenture. Upon surrender to the
Paying Agent, such Notes shall be paid at the Redemption Price stated in the
notice of redemption.
SECTION 4.04. Deposit of Redemption Price.
(a) Prior to 11:00 a.m. (New York City time) on the 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 for all Notes to be
redeemed on that date other than Notes or portions of Notes 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 Notes pursuant to Articles 11 and 12. If such
money is then held by the Company or its Subsidiary or an Affiliate of either of
them, as Paying Agent, in trust and is not required for such purpose it shall be
discharged from such trust.
(b) If as of 11:00 a.m. (New York City time) on any Redemption Date the
Paying Agent holds money sufficient to pay in full the Redemption Price for all
Notes to be redeemed on such Redemption Date, other than Notes or portions of
Notes called for redemption which on
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or prior thereto have been delivered by the Company to the Trustee for
cancellation or have been converted, the Notes will cease to be outstanding
immediately following the close of business on the Redemption Date and interest
and Additional Amounts, if any, on the Notes so purchased will cease to accrue
on and after such Redemption Date. In such event, all rights of the Holder will
terminate, other than the right to receive the Redemption Price upon delivery or
transfer of the Notes to be so purchased.
SECTION 4.05. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder a new Note
in an authorized denomination equal in principal amount to the unredeemed
portion of the Notes surrendered.
SECTION 4.06. Arrangement on Call for Redemption.
(a) In connection with any redemption of Notes, the Company may arrange at
or shortly before the time of the redemption for the purchase of any Notes
called for redemption by an agreement with one or more investment banks or other
purchasers to purchase such Notes by paying to the Trustee in trust for the
Holders, on or prior to 11:00 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 Notes, is not less than the Redemption Price
of such Notes. Notwithstanding anything to the contrary contained in this
Article 4, the obligation of the Company to pay the Redemption Prices of such
Notes shall be deemed to be satisfied and discharged to the extent such amount
is so paid by such purchasers.
(b) If such an agreement is entered into, any Notes 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 as of the close of business on the Redemption Date, subject to
payment of the above amount as aforesaid.
(c) The Trustee shall hold and pay to the Holders whose Notes are selected
for redemption any such amount paid to it for purchase in the same manner as it
would moneys deposited with it by the Company for the redemption of Notes.
Without the Trustee's prior written consent, no arrangement between the Company
and such purchasers for the purchase of any Notes 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 of any Notes
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 4.07. Purchase of Notes at the Option of the Holders.
(a) Notes shall be purchased by the Company, in whole or in part, at a
purchase price (the "Purchase Price") equal to 100% of the principal amount
thereof, plus any accrued and unpaid interest and Additional Amounts, if any,
to, but excluding, the relevant Purchase Date, at the option of the Holder
thereof upon:
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(i) delivery to the Paying Agent by the Holder of a written
notice of purchase substantially in the form attached in Exhibit A
hereto (a "Purchase Notice"), at any time from the opening of
business on the date that is at least 20 business days prior to the
relevant Purchase Date until the close of business on the third
business day prior to such Purchase Date stating:
(A) the relevant Purchase Date;
(B) if certificated notes have been issued, the certificate
number of the Notes which the Holder will deliver to be purchased;
(C) the portion of the principal amount of the Notes which
the Holder will deliver to be purchased, which portion must be a
principal amount of $1,000 or an integral multiple thereof;
(D) that such Notes shall be purchased as of the Purchase
Date pursuant to the terms and conditions specified in the Notes and
in this Indenture; and
(E) in the event the Company elects, pursuant to Section
4.08(e), to pay the Purchase Price to be paid as of such Purchase
Date, in whole or in part, in Common Stock, but such portion of the
Purchase Price shall ultimately be payable to such Holder 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 4.08(g), whether such
Holder elects (i) to withdraw such Purchase Notice as to some or all
of the Notes to which such Purchase Notice relates (stating the
principal amount and certificate numbers of the Notes as to which
such withdrawal shall relate), or (ii) to receive cash in respect of
the entire Purchase Price for all Notes (or portions thereof) to
which such Purchase Notice relates; and
(ii) delivery or book-entry transfer of such Note to the
Paying Agent for cancellation 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 4.08 only if
the Note so delivered to the Paying Agent shall conform in all
respects to the description thereof in the related Purchase Notice.
If a Holder, in such Holder's Purchase Notice, fails to indicate such
Holder's choice with respect to the election set forth in clause (E) of Section
4.08(a)(i), such Holder shall be deemed to have elected to receive cash in
respect of the Purchase Price for all Notes subject to such Purchase Notice in
the circumstances set forth in such clause (E).
(b) The Company shall purchase from the Holder thereof, pursuant to this
Section 4.08, a portion of a Note if the principal amount 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 Note also apply to the purchase of such
portion of such Note.
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(c) Any purchase by the Company contemplated pursuant to the provisions of
this Section 4.08 shall be consummated by the delivery of the Purchase Price
promptly following the later of the Purchase Date and the time of delivery of
the Note.
(d) Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this Section 4.08 shall
have the right to withdraw such Purchase Notice at any time prior to the close
of business on the business day prior to the Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section
4.10. The Paying Agent shall promptly notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.
(e) The Notes to be purchased pursuant to Section 4.08(a) may be paid for,
at the election of the Company, in cash or in Common Stock valued at the Market
Price, or in any combination of cash and shares of Common Stock, subject to the
conditions set forth in Sections 4.08(f) and (g). The Company shall designate,
in the Company's Notice delivered pursuant to Section 4.08(h), whether the
Company will purchase the Notes for cash or shares of Common Stock, or, if a
combination thereof, the percentages of the Purchase Price of Notes in respect
of which it will pay cash or shares of Common Stock; provided that the Company
shall pay cash for fractional shares of Common Stock. For purposes of
determining the existence of potential fractional shares of Common Stock, all
Notes 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 Notes are purchased pursuant to this Section 4.08 shall receive the
same percentage of cash or shares of Common Stock in payment of the Purchase
Price for such Notes, except (i) as provided in Section 4.08(g) 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 Notes of a Holder or Holders
for shares of Common Stock because any necessary qualifications or registrations
of the shares of Common Stock under applicable state or foreign securities laws
cannot be obtained, the Company may purchase the Notes 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 the Company's Notice to Holders except pursuant to
this Section 4.08(e) or pursuant to Section 4.08(g) 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 shares of Common
Stock.
If the Company elects to pay all or part of the Purchase Price in shares
of Common Stock, the portion of interest attributable to the period from the
later of August 6, 2003 and the date on which interest was last paid through the
Purchase Date and defaulted interest, if any, with respect to the surrendered
Note 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
shares of Common Stock (together with cash payment, if any, in lieu of
fractional Shares) and cash, if any, in exchange for the Note being purchased
pursuant to the terms hereof; and such cash and the fair market value of such
shares of Common Stock (together with any such cash payment in lieu of
fractional shares of Common Stock) shall be treated as delivered pro rata, to
the extent thereof, first in exchange for interest accrued through the Purchase
Date and defaulted interest, if any, and the balance, if any, of such cash and
the fair market value of such shares of Common Stock (and any such cash payment)
shall be treated as delivered in exchange for the principal amount of the Note
being purchased pursuant to the provisions hereof.
23
(f) On each Purchase Date, at the option of the Company, the Purchase
Price of Notes in respect of which a Purchase Notice pursuant to Section 4.08(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 Notes.
(g) On each Purchase Date, at the option of the Company, the Purchase
Price of Notes in respect of which a Purchase Notice pursuant to Section 4.08(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 Holders 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 Notes in cash by (ii) the Market
Price of a share of Common Stock, subject to the next succeeding paragraph.
The Company may not issue a fractional share of Common Stock in payment of
the Purchase Price. Instead the Company shall pay cash for the current market
value of the fractional share of Common Stock. The current market value of a
fraction of a share of Common Stock shall be determined, to the nearest
1/1,000th of a share of Common Stock, 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 Note purchased, the number of
shares of Common Stock shall be based on the aggregate amount of Notes to be
purchased.
The Company's right to exercise its election to purchase the Notes
pursuant to Section 4.08 through the issuance of shares of Common Stock shall be
conditioned upon:
(i) the Company's not having given its Company's Notice of an
election to pay entirely in cash and its giving of a timely Company's
Notice of election to purchase all or a specified percentage of the Notes
with shares of Common Stock as provided herein;
(ii) the listing of the shares of Common Stock to be issued in
respect of the payment of the Purchase Price on the principal United
States national securities exchange on which the shares of Common Stock
are then listed or quoted or, if there are no then-listed shares, on the
Nasdaq National Market;
(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 and the Exchange Act, if required; and
(iv) any necessary qualification or registration under
applicable state securities laws or the availability of an exemption from
such qualification and registration.
The Company may pay the Purchase Price (or any portion thereof) in shares
of 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 prior to the close of business on the Purchase Date
and the Company has elected to purchase the Notes pursuant to this Section 4.08
through the issuance of shares of Common Stock, the Company shall pay the entire
Purchase Price of the Notes of such Holder or Holders in cash.
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(h) The Company's notice of whether it intends to pay the Purchase Price
with cash or shares of Common Stock or any combination thereof shall be sent to
the Holders (and to beneficial owners as required by applicable law) in the
manner provided herein (the "Company's Notice"). The Company's Notice 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's Notice
Date"). The Company's Notice shall state the manner of payment and shall contain
the following information:
In the event the Company has elected to pay the Purchase Price (or a
specified percentage thereof) with shares of Common Stock, the Company's Notice
shall:
(1) state that each Holder will receive shares of Common Stock in
respect of the specified percentage of the Purchase Price of the Notes
held by such Holder (except any cash amount to be paid in lieu of
fractional shares of Common Stock);
(2) state that the total number of shares of Common Stock to be
issued to Holders will be equal to the quotient obtained by dividing (i)
the amount of cash to which the Holders 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 Notes in cash by (ii) the Market Price
of a share of Common Stock;
(3) set forth the method of calculating the Market Price of a
share of Common Stock; and
(4) state that because the Market Price of a share of Common Stock
will be determined prior to the Purchase Date, Holders will bear the
market risk with respect to the value of a share of Common Stock to be
received from the date such Market Price is determined to the Purchase
Date.
In any case, each Company's Notice shall include a form of Purchase Notice
to be completed by a Holder and shall state:
(i) the Purchase Price and the Conversion Rate applicable on the
Company's Notice Date;
(ii) the name and address of the Paying Agent and the Conversion
Agent;
(iii) that Notes 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 Notes must be surrendered to the Paying Agent for
cancellation to collect payment;
(v) that the Purchase Price for any Note as to which a Purchase
Notice has been given and not withdrawn will be paid promptly following
the later of the Purchase Date and the time of surrender of such Note as
described in (iv);
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(vi) the procedures the Holder must follow to exercise rights under
Section 4.08 and a brief description of those rights;
(vii) briefly, the conversion rights of the Notes;
(viii) the procedures for withdrawing a Purchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms of
Section 4.08(a)(i)(E) or Section 4.10);
(ix) that, unless the Company defaults in making payment of such
Purchase Price, interest, including defaulted interest, if any, on Notes
covered by any Purchase Notice, will cease to accrue on and after the
Purchase Date; and
(x) the CUSIP number of the Notes, if applicable.
At the Company's request, the Trustee shall give such Company's Notice in
the name of the Company and at the Company's expense; provided, however, that,
in all cases, the text of such Company's Notice shall be prepared by the
Company. In connection with providing the Purchase Notice, the Company shall
publish a notice containing the information contained in such Purchase Notice in
a newspaper of general circulation in The City of New York or publish the
information on the Company's web site or through such other public medium as the
Company may use at that time.
(i) All shares of Common Stock delivered upon purchase of the Notes shall
be newly issued shares of Common Stock or shares held in treasury, 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.
The Company shall use its best efforts to list or cause to have quoted any
share of Common Stock to be issued to purchase Notes on each United States
National Securities Exchange or automated over-the-counter trading market in the
United States on which the shares of Common Stock are then listed or quoted.
(j) The Company shall deposit cash (in respect of a cash purchase under
Section 4.08(f) or for fractional interests, as applicable) or shares of Common
Stock, or a combination thereof, as applicable, at the time and in the manner as
provided in Section 4.11, sufficient to pay the aggregate Purchase Price of all
Notes to be purchased pursuant to this Section 4.08. As soon as practicable
after the Purchase Date, the Company shall deliver to each Holder entitled to
receive shares of Common Stock through its stock transfer agent, a certificate
for the number of shares of Common Stock issuable in payment of the Purchase
Price. The Person in whose name the certificate for shares of 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. Subject to Section 4.08(g), no
payment or adjustment will be made for dividends on any shares of Common Stock
delivered in payment of the Purchase Price the record date for which occurred on
or prior to the Purchase Date.
(k) If a Holder of a Note is paid in shares of Common Stock, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on such
issue of shares of Common
26
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 shares of Common Stock being issued in a name other than the
Holder's name until the Paying Agent receives a sum that the Company deems to be
sufficient to pay any tax which will be due because the shares of Common Stock
are to be issued in a name other than the Holder's name. Nothing herein shall
preclude any income tax withholding required by law or regulations.
SECTION 4.08. Repurchase at the Option of Holders Upon Fundamental Change.
(a) A "Fundamental Change" shall be deemed to have occurred at such time
as:
(i) a "person" or "group" within the meaning of Section 13(d) of
the Exchange Act (other than the Company or any of its Subsidiaries or any
employee benefit plans of the Company or any of its Subsidiaries or any
Permitted Holders) files a Schedule 13D or Schedule TO (or any successors
to these schedules) under the Exchange Act disclosing that such person or
group has become the direct or indirect "beneficial owner", as defined in
Rule 13d-3 under the Exchange Act, of 50% or more, in the aggregate, of
the voting power of the (x) Common Stock and Class B Common Stock then
outstanding or (y) other Capital Stock into which the Common Stock or
Class B Common Stock is reclassified or changed;
(ii) one or more Permitted Holders file a Schedule 13D or Schedule
TO (or any successors to these schedules) under the Exchange Act stating
that they have 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 80% or more, in the aggregate, of
the voting power of the (x) Common Stock and Class B Common Stock of the
Company then outstanding or (y) other Capital Stock into which the Common
Stock or Class B Common Stock is reclassified or changed;
(iii) the consummation of any share exchange, consolidation or
merger of the Company pursuant to which the Common Stock will be converted
into cash, securities or other property or any sale, lease or other
transfer in one transaction or a series of transactions of all or
substantially all of the consolidated assets of the Company and its
Subsidiaries, taken as a whole, to any person other than to a Subsidiary
of the Company; provided, however, that a transaction where the holders of
the Common Stock and the Class B Common Stock immediately prior to such
transaction own, directly or indirectly, more than 50% of aggregate voting
power of all classes of common equity of the continuing or surviving
corporation or transferee entitled to vote generally in the election of
directors immediately after such event shall not be a Fundamental Change;
(iv) the Continuing Directors cease to constitute at least a
majority of the Company's board of directors;
(v) the stockholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company; or
27
(vi) the Common Stock ceases to be listed on a national securities
exchange or quoted on the Nasdaq National Market or another established
automated over-the-counter trading market in the United States.
A Fundamental Change shall not be deemed to have occurred, however, if
either:
(i) the last reported sale price of the Common Stock for any five
trading days within the 10 consecutive trading days ending immediately
before the later of the Fundamental Change or the announcement thereof,
equals or exceeds 105% of the Conversion Price in effect immediately
before the earlier to occur of the Fundamental Change or the public
announcement thereof; or
(ii) at least 90% of the consideration, excluding cash payments
for fractional shares, in the transaction or transactions constituting the
Fundamental Change consists of shares of Common Stock traded on a national
securities exchange or quoted on the Nasdaq National Market or which will
be so traded or quoted when issued or exchanged in connection with a
Fundamental Change (these securities being referred to as "publicly traded
securities") and as a result of this transaction or transactions the Notes
become convertible into such publicly traded securities, excluding cash
payments for fractional shares.
(b) Following a Fundamental Change (the date of each such occurrence being
the "Fundamental Change Date"), the Company shall notify the Holders in writing
of such occurrence (such written notice referred to herein as the "Fundamental
Change Notice") and shall make an offer (the "Fundamental Change Offer") to
repurchase all Notes then outstanding at a repurchase price (the "Fundamental
Change Repurchase Price") equal to:
(i) beginning on August 6, 2003 and ending on July 31, 2008, 105%
of the principal amount thereof, plus accrued and unpaid interest and
Additional Amounts, if any, to but excluding, the Fundamental Change
Repurchase Date (as defined below); or
(ii) on August 1, 2008 and thereafter, 100% of the principal
amount thereof, plus accrued and unpaid interest and Additional Amounts,
if any, to, but excluding, the Fundamental Change Repurchase Date (as
defined below).
The Fundamental Change Repurchase Price may be paid in cash or shares of Common
Stock or any combination thereof, subject to the conditions set forth in Section
4.09(j). If the Company elects to pay all or a portion of the Fundamental Change
Repurchase Price in shares of Common Stock, the shares of the Common Stock will
be valued at 98% of the Market Price of the Common Stock.
If the date on which payment of the Fundamental Change Repurchase Price is
made (the "Fundamental Change Repurchase Date") is an Interest Payment Date, the
Company shall pay interest to the person in whose name the Note is registered on
the relevant Regular Record Date. In connection with providing the Fundamental
Change Notice, the Company shall publish a notice containing the information
contained in such Fundamental Change Notice in a newspaper of general
circulation in The City of New York or publish the information on the Company's
web site or through such other public medium as the Company may use at that
time.
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(c) The Fundamental Change Notice shall be mailed by or at the direction
of the Company to the Holders as shown on the Register of such Holders
maintained by the Registrar not more than 20 days after the applicable
Fundamental Change Date at the addresses as shown on the Register maintained by
the Registrar, with a copy to the Trustee and the Paying Agent. The Fundamental
Change Offer shall remain open until a specified date (the "Fundamental Change
Offer Termination Date") that is no later than 35 business days from the date
the Fundamental Change Notice is mailed, subject to extension to comply with
applicable law. Prior to the Fundamental Change Offer Termination Date, Holders
may elect to tender their Notes in whole or in part in integral multiples of
$1,000. The Company shall make payment for the Notes properly tendered on the
Fundamental Change Repurchase Date, which shall promptly follow the Fundamental
Change Offer Termination Date.
(d) The Fundamental Change Notice, which shall govern the terms of the
Fundamental Change Offer, shall include a form of written notice of repurchase
substantially in the form attached in Exhibit A hereto (the "Fundamental Change
Repurchase Notice") to be completed by the Holder and shall state or include:
(i) that a Fundamental Change Offer is being made pursuant to
this Section 4.09 and that all Notes properly tendered will be accepted
for payment;
(ii) if certificated notes have been issued, the certificate
number(s) or CUSIP number(s) of the Notes pursuant to which the
Fundamental Change Offer is being made;
(iii) the event, transaction or transactions that constitute the
Fundamental Change, the date of such Fundamental Change and that Holders
have the right to elect to have their Notes repurchased in accordance with
the Company's Fundamental Change Offer;
(iv) whether the Company will purchase the Notes for cash, shares
of Common Stock or a combination thereof;
(v) the Fundamental Change Repurchase Price for each Note, the
Fundamental Change Offer Termination Date and the Fundamental Change
Repurchase Date;
(vi) the name and address of the Paying Agent and the Conversion
Agent;
(vii) the Conversion Price and any adjustments thereto;
(viii) that Notes as to which a Fundamental Change Repurchase Notice
has been given may be converted pursuant to this Section 4.09 only if the
Fundamental Change Repurchase Notice has been withdrawn in accordance with
the terms of this Indenture;
(ix) that any Note not accepted for payment will continue to
accrue interest and Additional Amounts, if applicable, in accordance with
the terms thereof;
(x) that, unless the Company defaults on making the Fundamental
Change Repurchase Price, any Note accepted for payment pursuant to the
Fundamental Change
29
Offer shall cease to accrue interest and Additional Amounts, if any, on
and after the Fundamental Change Repurchase Date and no further interest
or Additional Amounts, if any, shall accrue on or after such date and any
conversion rights associated with any Note accepted for payment pursuant
to the Fundamental Change Offer shall terminate on the Fundamental Change
Offer Termination Date;
(xi) that Holders electing to have Notes repurchased pursuant to a
Fundamental Change Offer will be required to surrender their Notes to the
Paying Agent at the address specified in the Fundamental Change Notice
prior to 5:00 p.m., New York City time, on the Fundamental Change Offer
Termination Date and must complete any form letter of transmittal proposed
by the Company and acceptable to the Trustee and the Paying Agent;
(xii) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than 5:00 p.m., New York City time,
on the Fundamental Change Offer Termination Date, a facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
Notes the Holder delivered for purchase, the certificate number(s) or
CUSIP number(s) of the Notes and a statement that such Holder is
withdrawing his election to have such Notes purchased;
(xiii) that Holders whose Notes are repurchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered;
(xiv) the procedures that Holders must follow in order to tender
their Notes;
(xv) that in the case of a Fundamental Change Repurchase Date that
is also an Interest Payment Date, the interest payment and Additional
Amounts, if any, due on such date shall be paid to the person in whose
name the Note is registered at the close of business on the relevant
Fundamental Change Offer Termination Date; and
(xvi) such other disclosures as are required by law.
In the event the Company has elected to pay the Fundamental Change
Repurchase Price (or a specified percentage thereof) with shares of Common
Stock, the Company's Fundamental Change Notice also shall:
(i) state that each Holder will receive shares of Common Stock in
respect of the specified percentage of the Fundamental Change Repurchase
Price of the Notes held by such Holder (except any cash amount to be paid
in lieu of fractional shares of Common Stock);
(ii) state that the total number of shares of Common Stock to be
issued to Holders will be equal to the quotient obtained by dividing (i)
the amount of cash to which the Holders would have been entitled had the
Company elected to pay all or such specified percentage, as the case may
be, of the Fundamental Change Repurchase Price of such Notes in cash by
(ii) 98% of the Market Price of a share of Common Stock;
30
(iii) set forth the method of calculating the Market Price of a
share of Common Stock;
(iv) state that because the Market Price of a share of Common
Stock will be determined prior to the Fundamental Change Repurchase Date,
Holders will bear the market risk with respect to the value of a share of
Common Stock to be received from the date such Market Price is determined
to the Fundamental Change Repurchase Date; and
(v) state that if (1) the Fundamental Change Repurchase Price
shall ultimately be payable to Holders entirely in cash because any of the
conditions to payment of the Fundamental Change Repurchase Price, in whole
or in part, in Common Stock is not satisfied prior to the close of
business on the Fundamental Change Repurchase Date and (2) a Holder fails
to elect in its Fundamental Change Repurchase Notice whether, under such
circumstances, to withdraw such Fundamental Change Repurchase Notice as to
some or all of the Notes to which such Fundamental Change Repurchase
Notice relates (stating the principal amount and certificate numbers of
the Notes as to which such withdrawal shall relate) or to receive cash in
respect of the entire Fundamental Change Repurchase Price for all Notes
(or portions thereof) to which such Fundamental Change Repurchase Notice
relates, such Holder shall be deemed to have elected to receive cash in
respect of the entire Fundamental Change Repurchase Price for all Notes
subject to the Fundamental Change Repurchase Notice.
(e) A Holder may exercise its rights specified in this Section 4.09 upon
delivery of a Fundamental Change Repurchase Notice, substantially in the form
attached in Exhibit A hereto, to the Trustee with a copy to the Paying Agent at
any time on or prior to the Fundamental Change Offer Termination Date, which
Fundamental Change Repurchase Notice shall state:
(i) if certificated Notes have been issued, the certificate number of the
Notes which the Holder will deliver to be repurchased;
(ii) the portion of the principal amount of the Notes which the
Holder will deliver to be repurchased, which portion must be a principal
amount of $1,000 or an integral multiple thereof;
(iii) that such Notes shall be purchased as of the Fundamental
Change Repurchase Date pursuant to the terms and conditions specified in
the Notes and in this Indenture; and
(iv) in the event the Company elects, pursuant to Section 4.09(h),
to pay the Fundamental Change Repurchase Price to be paid as of such
Fundamental Change Repurchase Date, in whole or in part, in Common Stock,
but such portion of the Fundamental Change Repurchase Price shall
ultimately be payable to such Holder entirely in cash because any of the
conditions to payment of the Fundamental Change Repurchase Price in Common
Stock is not satisfied prior to the close of business on such Fundamental
Change Repurchase Date, as set forth in Section 4.09(j), whether such
Holder elects (i) to withdraw such Fundamental Change Repurchase Notice as
to some or all of the Notes to which such Fundamental Change Repurchase
Notice relates (stating
31
the principal amount and certificate numbers of the Notes as to which such
withdrawal shall relate), or (ii) to receive cash in respect of the entire
Fundamental Change Repurchase Price for all Notes (or portions thereof) to
which such Fundamental Change Repurchase Notice relates.
If a Holder, in such Holder's Fundamental Change Repurchase Notice, fails to
indicate such Holder's choice with respect to the election set forth in clause
(iv) of Section 4.09(e), such Holder shall be deemed to have elected to receive
cash in respect of the Fundamental Change Repurchase Price for all Notes subject
to such Fundamental Change Repurchase Notice in the circumstances set forth in
such clause (iv).
(f) The delivery or book-entry transfer of a Holder's Notes to the Paying
Agent with the Fundamental Change Repurchase Notice (together with all necessary
endorsements) at the office of the Paying Agent shall be a condition to the
receipt by the Holder of the Fundamental Change Repurchase Price therefor;
provided, however, that such Fundamental Change Repurchase Price shall be so
paid pursuant to this Section 4.09 only if the Notes so delivered to the Paying
Agent shall conform in all respects to the description thereof set forth in the
related Fundamental Change Repurchase Notice.
(g) Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Fundamental Change Repurchase Notice contemplated by
this Section 4.09 shall have the right to withdraw such Fundamental Change
Repurchase Notice at any time on or prior to the Fundamental Change Offer
Termination Date by delivery of a written notice of withdrawal to the Paying
Agent in accordance with Section 4.10. The Paying Agent shall promptly notify
the Company of the receipt by it of any Fundamental Change Repurchase Notice or
written withdrawal thereof.
(h) Each Holder whose Notes are repurchased pursuant to this Section 4.09
shall receive the same percentage of cash or shares of Common Stock in payment
of the Fundamental Change Repurchase Price for such Notes, except (i) as
provided in Section 4.09(j) 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 repurchase the Notes of a Holder or Holders for shares of Common Stock
because any necessary qualifications or registrations of the shares of Common
Stock under applicable state or foreign securities laws cannot be obtained, the
Company may repurchase the Notes 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 the
Company's Fundamental Change Notice to Holders except pursuant to this Section
4.09(h) or pursuant to Section 4.09(j) in the event of a failure to satisfy,
prior to the close of business on the Fundamental Change Repurchase Date, any
condition to the payment of the Fundamental Change Repurchase Price, in whole or
in part, in shares of Common Stock.
If the Company elects to pay all or part of the Fundamental Change
Repurchase Price in shares of Common Stock, the portion of interest attributable
to the period from the later of August 6, 2003 and the date on which interest
was last paid through the Fundamental Change Repurchase Date and defaulted
interest, if any, with respect to the surrendered Note shall not be cancelled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
Holder
32
thereof through the delivery of the shares of Common Stock (together with cash
payment, if any, in lieu of fractional Shares) and cash, if any, in exchange for
the Note being repurchased pursuant to the terms hereof; and such cash and the
fair market value of such shares of Common Stock (together with any such cash
payment in lieu of fractional shares of Common Stock) shall be treated as
delivered pro rata, to the extent thereof, first in exchange for interest
accrued through the Fundamental Change Repurchase Date and defaulted interest,
if any, and the balance, if any, of such cash and the fair market value of such
shares of Common Stock (and any such cash payment) shall be treated as delivered
in exchange for the principal amount of the Note being repurchased pursuant to
the provisions hereof.
(i) On each Fundamental Change Repurchase Date, at the option of the
Company, the Fundamental Change Repurchase Price of Notes in respect of which a
Fundamental Change Repurchase Notice pursuant to Section 4.09(d) has been given,
or a specified percentage thereof, may be paid by the Company with cash equal to
the aggregate Fundamental Change Repurchase Price of such Notes.
(j) On each Fundamental Change Repurchase Date, at the option of the
Company, the Fundamental Change Repurchase Price of Notes in respect of which a
Fundamental Change Repurchase Notice pursuant to Section 4.09(d) has been given,
or a specified percentage thereof, may be paid by the Company by the issuance of
a number of shares of Common Stock equal to the quotient obtained by dividing
(i) the amount of cash to which the Holders would have been entitled had the
Company elected to pay all or such specified percentage, as the case may be, of
the Fundamental Change Repurchase Price of such Notes in cash by (ii) 98% of the
Market Price of a share of Common Stock, subject to the next succeeding
paragraph.
The Company may not issue a fractional share of Common Stock in payment of
the Fundamental Change Repurchase Price. Instead the Company shall pay cash for
the current market value of the fractional share of Common Stock. The current
market value of a fraction of a share of Common Stock shall be determined, to
the nearest 1/1,000th of a share of Common Stock, 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 Note repurchased, the
number of shares of Common Stock shall be based on the aggregate amount of Notes
to be repurchased.
The Company's right to exercise its election to repurchase the Notes
pursuant to Section 4.09 through the issuance of shares of Common Stock shall be
conditioned upon:
(i) the Company's not having given its Company's Fundamental
Change Notice of an election to pay entirely in cash and its giving of a
timely Company's Fundamental Change Notice of election to purchase all or
a specified percentage of the Notes with shares of Common Stock as
provided herein;
(ii) the listing of the shares of Common Stock to be issued in
respect of the payment of the Fundamental Change Repurchase Price on the
principal United States National Securities Exchange on which the shares
of Common Stock are then listed or quoted or, if there are no then-listed
shares, on the Nasdaq National Market;
33
(iii) the registration of the shares of Common Stock to be issued
in respect of the payment of the Fundamental Change Repurchase Price under
the Securities Act and the Exchange Act, if required; and
(iv) any necessary qualification or registration under applicable
state securities laws or the availability of an exemption from such
qualification and registration.
The Company may pay the Fundamental Change Repurchase Price (or any portion
thereof) in shares of 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 prior to the close of
business on the Fundamental Change Repurchase Date and the Company has elected
to repurchase the Notes pursuant to this Section 4.09 through the issuance of
shares of Common Stock, the Company shall pay the entire Fundamental Change
Repurchase Price of the Notes of such Holder or Holders in cash.
Upon determination of the actual number of shares of Common Stock which
the Holder of each $1,000 principal amount of the Notes shall receive, the
Company shall publish such determination in a newspaper of general circulation
in The City of New York or on the Company's website or through such other public
medium as the Company may use at that time.
(k) Promptly following the Fundamental Change Offer Termination Date, the
Company shall (i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Fundamental Change Offer, (ii) deposit with the Paying
Agent money or Common Stock sufficient to pay the Fundamental Change Repurchase
Price with respect to all Notes or portions thereof so tendered and accepted and
(iii) deliver or cause to be delivered to the Trustee for cancellation the Notes
so accepted together with an Officer's Certificate setting forth the aggregate
principal amount of Notes or portions thereof tendered to and accepted for
payment by the Company. On the Fundamental Change Repurchase Date, the Paying
Agent shall mail or deliver the Fundamental Change Repurchase Price to the
Holders so accepted and the Trustee shall promptly authenticate and mail or
cause to be transferred by book-entry to such Holders a new Note equal in
principal amount to any unpurchased portion of the Note surrendered, if any;
provided that such new Notes will be in a principal amount of $1,000 or an
integral multiple thereof. Any Notes not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof.
(l) In the case of any reclassification, change, consolidation, merger,
share exchange, combination or sale or conveyance to which Section 11.06 applies
in which the Common Stock of the Company is changed or exchanged as a result
into the right to receive stock, securities or other property or assets
(including cash) which includes shares of Common Stock of the Company or shares
of common stock of another person that are, or upon issuance will be, traded on
a United States national securities exchange or approved for trading on an
established automated over-the-counter trading market in the United States and
such shares constitute at the time such change or exchange becomes effective in
excess of 50% of the aggregate fair market value of such stock, securities other
property and assets (including cash) (as determined by the Company, which
determination shall be conclusive and binding), then the person formed by such
consolidation or which issues such shares of common stock and is, or is the
company that controls, the person resulting from such merger or share exchange
or which acquires such assets,
34
as the case may be, shall execute and deliver to the Trustee a supplemental
indenture (which shall comply with the TIA as in force at the date of execution
of such supplemental indenture) modifying the provisions of this Indenture
relating to the right of Holders to cause the Company to repurchase Notes
following a Fundamental Change, including the applicable provisions of this
Section 4.09 and the definition of Fundamental Change, as determined in good
faith by the Company (which determination shall be conclusive and binding), to
make such provision apply to such issuer and the common stock thereof if
different from the Company and Common Stock of the Company (in lieu of the
Company and the Common Stock of the Company).
SECTION 4.09. Effect of Purchase Notice or Fundamental Change Repurchase
Notice.
(a) Upon receipt by the Paying Agent of the Purchase Notice or Fundamental
Change Repurchase Notice specified in Section 4.08 or Section 4.09, as
applicable, the Holder in respect of which such Purchase Notice or Fundamental
Change Repurchase Notice, as the case may be, was given shall (unless such
Purchase Notice or Fundamental Change Repurchase Notice is withdrawn as
specified in the following two paragraphs) thereafter be entitled to receive
solely the Purchase Price or Fundamental Change Repurchase Price, as the case
may be, with respect to such Note. Such Purchase Price or Fundamental Change
Repurchase Price shall be paid to such Holder, subject to receipt of funds by
the Paying Agent, promptly following the later of (x) the Purchase Date or the
Fundamental Change Repurchase Date, as the case may be (provided the conditions
in Section 4.08 or Section 4.09, as applicable, have been satisfied), and (y)
the time of delivery of such Note to the Paying Agent by the Holder thereof in
the manner required by Section 4.08 or Section 4.09, as applicable. Notes in
respect of which a Purchase Notice or Fundamental Change Repurchase Notice, as
the case may be, has been given by the Holder thereof may not be converted
pursuant to Articles 11 and 12 hereof on or after the date of the delivery of
such Purchase Notice or Fundamental Change Repurchase Notice, as the case may
be, unless such Purchase Notice or Fundamental Change Repurchase Notice, as the
case may be, has first been validly withdrawn as specified in the following
paragraph.
(b) A Purchase Notice or Fundamental Change Repurchase 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
Fundamental Change Repurchase Notice, as the case may be, at any time prior to
the close of business on the business day prior to the Purchase Date or the
Fundamental Change Repurchase Date, as the case may be, specifying:
(i) the principal amount of the Note with respect to which such
notice of withdrawal is being submitted;
(ii) if certificated notes have been issued, the certificate
number(s) or CUSIP number(s) of the Note in respect of which such notice
of withdrawal is being submitted; and
(iii) the principal amount, if any, of such Note which remains
subject to the original Purchase Notice or Fundamental Change Repurchase
Notice, as the case may be, and which has been or will be delivered for
purchase by the Company.
35
(c) There shall be no purchase of any Notes pursuant to Section 4.08 or
Section 4.09 (other than through the issuance of shares of Common Stock in
payment of the Purchase Price or Fundamental Change Repurchase Price, as
applicable), including cash in lieu of fractional shares, if there has occurred
(prior to, on or after, as the case may be, the giving, by the Holders of such
Notes of the required Purchase Notice or Fundamental Change Repurchase Notice,
as the case may be) and is continuing an Event of Default (other than a default
in the payment of the Purchase Price or Fundamental Change Repurchase Price, as
the case may be, with respect to such Notes). The Paying Agent will promptly
return to the respective Holders thereof any Notes (x) with respect to which a
Purchase Notice or Fundamental Change Repurchase Notice, as the case may be has
been delivered 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 Fundamental Change Repurchase Price, as the case may be, with
respect to such Notes), in which case, upon such return, the Purchase Notice or
Fundamental Change Repurchase Notice, as the case may be with respect thereto
shall be deemed to have been withdrawn.
SECTION 4.10. Deposit of Purchase Price or Fundamental Change Repurchase
Price.
(a) Prior to 11:00 a.m. (New York City time) on the Purchase Date or the
Fundamental Change Repurchase 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 in
connection with a purchase pursuant to Section 4.08 or Section 4.09, 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
sufficient to pay the aggregate Purchase Price or Fundamental Change Repurchase
Price, as the case may be, of all the Notes or portions thereof which are to be
purchased as of the Purchase Date or Fundamental Change Repurchase Date, as the
case may be.
(b) If the Paying Agent holds money or Common Stock sufficient to pay in
full the relevant Purchase Price or Fundamental Change Repurchase Price, as
applicable, for all Notes to be purchased as of the relevant Purchase Date or
Fundamental Change Repurchase Date, as applicable, other than Notes or portions
of Notes which on or prior thereto have been delivered by the Company to the
Trustee for cancellation or have been converted, the Notes will cease to be
outstanding immediately following the close of business on the relevant Purchase
Date or Fundamental Change Repurchase Date, as applicable, and interest and
Additional Amounts, if any, on the Notes so purchased will cease to accrue on
and after such Purchase Date or Fundamental Change Repurchase Date, as
applicable. In such event, all rights of the Holder will terminate on and after
the relevant Purchase Date or Fundamental Change Repurchase Date, as applicable,
other than the right to receive the relevant Purchase Price or Fundamental
Change Repurchase Price, as applicable, upon delivery or transfer of the Notes
to be so purchased.
SECTION 4.11. Notes Purchased in Part.
Any Note 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 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 Note, without
service
36
charge, a new Note or Notes, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to, and in exchange for, the portion
of the principal amount of the Notes so surrendered which is not purchased.
SECTION 4.12. Covenant to Comply with Securities Laws upon Purchase of
Convertible Subordinated Notes.
In connection with any offer to purchase or purchase of Notes under
Section 4.08 or 4.09 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 4.08 and 4.09 to be exercised
in the time and in the manner specified in Sections 4.08 and 4.09.
SECTION 4.13. Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company any cash that
remains unclaimed, together with interest or dividends, if any, thereon (subject
to the provisions of Section 7.01(e)), held by them for the payment of the
Purchase Price or Fundamental Change Repurchase Price, as the case may be;
provided, however, that to the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 4.11 exceeds the aggregate Purchase
Price or Fundamental Change Repurchase Price, as the case may be, with respect
to the Notes or portions thereof which the Company is obligated to purchase as
of the Purchase Date or Fundamental Change Repurchase 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 Fundamental Change Repurchase 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(e)).
ARTICLE 5
SUCCESSORS
SECTION 5.01. Company May Consolidate, etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other person or
convey, transfer or lease all or substantially all of its properties and assets
to any person, and the Company shall not permit any person to consolidate with
or merge into the Company or convey, transfer or lease all or substantially all
of its properties and assets to the Company unless:
(a) either:
(i) the Company shall be the continuing corporation; or
37
(ii) the person formed by or surviving any such consolidation or
share exchange or into which the Company is merged (if other than the
Company) or the person which acquires by sale, assignment, transfer,
lease, conveyance or other disposition all or substantially all of the
properties and assets of the Company:
(1) shall be a corporation, partnership or trust organized under the
laws of the United States or any State thereof or the District of
Columbia; and
(2) shall expressly assume, by supplemental indenture in form
reasonably satisfactory to the Trustee, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and interest and Additional
Amounts, if any, on all of the Notes and the performance or
observance of every covenant of the Notes and this Indenture on the
part of the Company to be performed or observed, including, without
limitation, modifications to rights of Holders to cause the
repurchase of Notes upon a Fundamental Change in accordance with
Section 4.09(h) and conversion rights in accordance with Section
11.06 to the extent required by such Sections;
(b) in all cases, immediately after giving effect to such transaction no
Default and no Event of Default shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officer's
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 and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation of the Company with, or merger of the Company into,
any other person or any conveyance, transfer or lease of all or substantially
all of the properties and assets of the Company in accordance with this Article
5, the successor person formed by such consolidation or into which the Company
is merged or into 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 person
had been named as the Company herein, and thereafter, except in the case of a
sale, assignment, transfer, lease, conveyance or other disposition, the
predecessor person shall be relieved of all obligations and covenants under this
Indenture and the Notes.
SECTION 5.03. Repurchase at the Option of Holders upon Fundamental Change.
This Article 5 does not affect the obligations of the Company (including
without limitation any successor to the Company) under Section 4.09.
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" with respect to any Notes shall be deemed to have
occurred if:
(a) the Company defaults in the payment of principal of the Notes when due
at maturity upon redemption, repurchase or otherwise; or
(b) the Company defaults in the payment of any installment of interest or
Additional Amounts on the Notes when due (including any interest payable in
connection with a repurchase pursuant to Section 4.08 or Section 4.09 and a
redemption pursuant to Section 4.01) and continuance of such default for 30 days
or more; or
(c) the Company defaults in its obligation to satisfy its conversion
obligation upon exercise of a Holder's conversion right and continuance of such
default for 10 days; or
(d) the Company fails to comply or observe in any material respect (other
than a default set forth in clauses (a), (b) and (c) above) any other covenant
or agreement of the Company in respect of the Notes set forth in this Indenture
or the Notes, and fails to remedy such default or breach within a period of 60
days after the receipt of written notice to the Company from the Trustee or to
the Company and the Trustee from the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding; or
(e) a default under any credit agreement, mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company or any Material
Subsidiary, other than any such indebtedness which is non-recourse to the
Company or any Material Subsidiary, whether such indebtedness exists on the date
of this Indenture or shall hereafter be created, which default (i) is caused by
a failure to pay when due any principal on such indebtedness at the final stated
maturity date of such indebtedness (which failure continues beyond any
applicable grace period) (a "Payment Default") or (ii) results in the
acceleration of such indebtedness prior to its express maturity (without such
acceleration being rescinded or annulled) and, in each case, the principal
amount of such indebtedness, together with the principal amount of any other
such indebtedness under which there is a Payment Default or the maturity of
which has been so accelerated, aggregates to $25,000,000 or more and such
Payment Default is not cured or such acceleration is not annulled within 30 days
after receipt of written notice to the Company from the Trustee or to the
Company and the Trustee from Holders of at least 25% in aggregate principal
amount of the Notes then outstanding; or
(f) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company or any Material Subsidiary
in an involuntary case or proceeding under any Bankruptcy Law, or (ii) a decree
or order adjudging the Company or any Material Subsidiary bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any Material
Subsidiary under any applicable U.S. federal or state law, or appointing a
custodian,
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receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or of any substantial part of its property or any Material
Subsidiary or of any substantial part of such Subsidiary's property, or ordering
the winding-up or liquidation of the Company or any Material Subsidiary, and the
continuance of any such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 60 days; or
(g) the commencement by the Company or a Material Subsidiary of a
voluntary case or proceeding under any Bankruptcy Law or any other case or
proceeding to be adjudicated bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the Company or any Material
Subsidiary in an involuntary case or proceeding under any Bankruptcy Law or to
the commencement of any bankruptcy or insolvency case or proceeding against it,
or the filing by it of a petition or answer or consent seeking reorganization or
relief under any Bankruptcy Law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property or any Material Subsidiary or
of any substantial part of such Subsidiary's property, or the making by it of an
assignment for the benefit of creditors, or the admission by the Company or any
Material Subsidiary in writing of its inability to pay its debts generally as
they become due.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
SECTION 6.02. Acceleration.
(a) If an Event of Default (other than an Event of Default specified in
clauses (f) and (g) of Section 6.01) occurs and is continuing, then and in every
such case the Trustee, by written notice to the Company, or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding, by
written notice to the Company and the Trustee, may declare the unpaid principal
of and accrued and unpaid interest and Additional Amounts, if any, on all the
Notes then outstanding to be due and payable. Upon such declaration such
principal amount and accrued and unpaid interest and Additional Amounts, if any,
shall become immediately due and payable, notwithstanding anything contained in
this Indenture or the Notes to the contrary. If any Event of Default specified
in clauses (f) or (g) of Section 6.01 occurs, all unpaid principal of and
accrued and unpaid interest and Additional Amounts, if any, on the Notes then
outstanding shall become automatically due and payable, without any declaration
or other act on the part of the Trustee or any Holder.
(b) The Holders of a majority in aggregate principal amount of the Notes
then outstanding by written notice to the Trustee may rescind any acceleration
of the Notes and its consequences if all existing Events of Default (other than
nonpayment of principal of and interest and Additional Amounts, if any, on the
Notes which has become due solely by virtue of such acceleration) have been
cured or waived and if the rescission would not conflict with any judgment or
decree of any court of competent jurisdiction. No such rescission shall affect
any subsequent Default or Event of Default or impair any right consequent
thereto.
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SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
principal of or interest or Additional Amounts, if any, on the Notes or to
enforce the performance of any provision of the Notes or this Indenture. The
Trustee may maintain a proceeding even if it does not possess any of the Notes
or does not produce any of them in the proceeding. A delay or omission by the
Trustee or any Holder in exercising any right or remedy occurring upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
SECTION 6.04. Waiver of Past Defaults.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding may, on behalf of the Holders of all the Notes then outstanding,
waive any past Default or Event of Default and its consequences, except a
Default or Event of Default in the payment of the principal or interest or
Additional Amounts, if applicable, on the Notes (other than the non-payment of
principal, interest or Additional Amounts, if any, on the Notes which has become
due solely by virtue of an acceleration which has been duly rescinded as
provided above), or in respect of a covenant or provision of this Indenture
which cannot be modified or amended without the consent of all Holders. When a
Default or Event of Default is waived, it is cured and stops continuing. No
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
SECTION 6.05. Control by Majority.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or 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 that the Trustee determines
may be unduly prejudicial to the rights of other Holders or that may involve the
Trustee in personal liability; provided that the Trustee shall have no duty or
obligation (subject to Section 7.01) to ascertain whether or not such actions of
forbearances are unduly prejudicial to such Holders; provided, further, that the
Trustee may take any other action the Trustee deems proper that is not
inconsistent with such directions.
SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture unless:
(a) the Holder gives to the Trustee written notice of a continuing Event
of Default on the Notes;
(b) the Holders of at least 25% in aggregate principal amount of the Notes
then outstanding make a written request to the Trustee to pursue the remedy;
(c) such Holders offer and, if requested, provide to the Trustee indemnity
reasonably satisfactory to the Trustee against any cost, expense or liability;
41
(d) the Trustee does not act on the request on or prior to the 60th day
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the Notes then outstanding do not give the Trustee a direction
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder. This Section
6.06 does not affect the right of the Holders to bring an action for enforcement
of the payment of the principal, interest or Additional Amounts, if any, the
Redemption Price, Purchase Price or Fundamental Change Repurchase Price, as
applicable, on such Holders' Notes on or after the respective due dates
expressed in the Notes or such Holders' right to convert its Notes in accordance
with the terms of this Indenture.
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 principal and interest and Additional Amounts, if
any, the Redemption Price, Purchase Price or Fundamental Change Repurchase
Price, as applicable, on the Notes, on or after the respective due dates
expressed in the Notes, or to bring suit for the enforcement of any such payment
on or after such respective dates, or to bring suit for the enforcement of the
right to convert the Notes shall not be impaired or affected without the consent
of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) 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 of principal, and
interest and Additional Amounts, if any, and Redemption Price, Purchase Price
and Fundamental Change Repurchase Price, if applicable, remaining unpaid on the
Notes and interest on overdue principal, interest and Additional Amounts, if
any, and Redemption Price, Purchase Price and Fundamental Change Repurchase
Price, if applicable, and such further amount as shall be sufficient to cover
the costs and, to the extent lawful, expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
Holders allowed in any judicial proceedings relative to the Company, its
creditors or its property. Nothing contained herein 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 Notes 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, it shall pay
out the money in the following order:
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First: to the Trustee for amounts due under Section 7.07,
including payment of all compensation, expenses and liabilities
incurred, and all advances made, by the Trustee, and the costs
and expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal, interest and Additional Amounts, if any, and the
Redemption Price, Purchase Price and Fundamental Change Repurchase
Price, if applicable, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
principal, interest and Additional Amounts, if any, and the
Redemption Price, Purchase Price and Fundamental Change Repurchase
Price, if applicable, respectively; and
Third: to the Company.
Except as otherwise provided in Section 2.12, the Trustee may fix a record
date and payment date for any payment to Holders.
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 a Trustee, a court in its discretion may require the filing by any party
litigant in the suit, other than the Trustee, of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys fees, 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 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
principal amount of the Notes then outstanding.
ARTICLE 7
THE TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed. Whether or not
herein expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Article 7.
SECTION 7.01. Duties of the Trustee.
(a) If an Event of Default known to a Trust Officer of the Trustee has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default known to the
Trustee:
(i) The duties of the Trustee shall be determined solely by the
express provisions of this Indenture, and the Trustee need perform only
those duties that are
43
specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) 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 any statements, certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the form required by
this Indenture.
(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:
(i) This paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) 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.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any financial liability in the performance of any of
its duties or the exercise of any of its rights and powers hereunder, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk of liability is not reasonably assured to
it.
(e) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. Rights of the Trustee.
(a) The Trustee may conclusively rely on and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate, or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, security or other document believed in good faith by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter contained therein.
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officer's Certificate (unless other
evidence in respect thereof is herein specifically prescribed). In addition,
before the Trustee acts or refrains from acting, it may require an Officer's
Certificate, an Opinion of Counsel or both. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such Officer's
Certificate or Opinion of Counsel. The Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection from
44
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through its attorneys and
agents and other persons not regularly in its employ and shall not be
responsible for the misconduct or negligence of any attorney or agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith without negligence or willful misconduct which it believes to
be authorized or within its discretion, rights or powers.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(f) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(g) 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 discretion of
any of the Holders pursuant to the provisions of this Indenture, unless such
Holders have offered to the Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities which might be incurred therein or
thereby.
(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, consent, order, security or other document
unless requested in writing to do so by the Holders of not less than a majority
in aggregate principal amount of the Notes then outstanding, provided that if
the Trustee determines in its discretion to make any such investigation, then it
shall be entitled, upon reasonable prior notice and during normal business
hours, to examine the books and records and the premises of the Company,
personally or by agent or attorney, and the reasonable expenses of every such
examination shall be paid by the Company or, if paid by the Trustee or any
predecessor Trustee, shall be reimbursed by the Company upon demand.
(i) The permissive rights of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct.
(j) The Trustee shall not be responsible for the computation of any
adjustment to the Conversion Price or for any determination as to whether an
adjustment is required and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received the notice from the Company
contemplated by Section 11.05(k).
(k) 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 each agent, custodian and other Person employed to act hereunder.
45
(l) The Trustee may request that the Company deliver an Officer's
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 Officer's Certificate may be signed by any person authorized to sign an
Officer's Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 7.03. Individual Rights of the Trustee.
Subject to Sections 7.10 and 7.11, the Trustee in its individual or any
other capacity may become the owner or pledgee of Notes with the same rights it
would have if it were not the Trustee and may otherwise deal with the Company or
an Affiliate of the Company and receive, collect, hold and retain collections
from the Company with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes. It shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture. It shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to a Trust Officer of the Trustee, the Trustee shall mail to each Holder a
notice of the Default or Event of Default within 90 days after the occurrence of
such Default or Event of Default. A Default or an Event of Default shall not be
considered known to a Trust Officer of the Trustee unless it is a Default or
Event of Default in the payment of principal, interest or Additional Amounts, if
any, when due under Section 6.01(a) or (b) (including any principal or interest
payable in connection with a repurchase pursuant to Section 4.08 or Section 4.09
and a redemption pursuant to Section 4.01), or a Trust Officer of the Trustee
shall have received notice thereof, in accordance with this Indenture, from the
Company or from the Holders of a majority in principal amount of the outstanding
Notes. Except in the case of a Default or Event of Default in payment of
principal of, or interest or Additional Amounts, if any, or payment of any
Redemption Price, Purchase Price or Fundamental Change Repurchase Price, if
applicable, on any Note, the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interest of the Holders.
SECTION 7.06. Reports by the Trustee to Holders.
(a) Within 60 days after the reporting date stated in Section 10.10, the
Trustee shall mail to Holders a brief report dated as of such reporting date
that complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a)
has occurred within twelve months preceding the reporting date, no report need
be transmitted). The Trustee also shall comply with TIA ss. 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA ss. 313(c).
46
(b) A copy of each report at the time of its mailing to Holders shall be
filed, at the expense of the Company, by the Trustee with the Commission and
each stock exchange or securities market, if any, on which the Notes are listed
or quoted. The Company shall timely notify the Trustee when the Notes are listed
or quoted on any stock exchange or securities market.
SECTION 7.07. Compensation and Indemnity.
(a) The Company shall pay to the Trustee from time to time, and the
Trustee shall be entitled to such compensation for its acceptance of this
Indenture and its services hereunder as the Company and the Trustee shall from
time to time agree in writing. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by or on behalf of it in addition to the
compensation for its services. Such expenses may include the reasonable
compensation, disbursements and expenses of the Trustee's agents, counsel and
other persons not regularly in its employ.
(b) The Company shall indemnify the Trustee against, and defend and hold
the Trustee harmless from, any loss, liability or expense incurred by it arising
out of or in connection with the acceptance or administration of its duties
under this Indenture and the trusts hereunder, including the costs and expenses
of defending itself against or investigating any claim of liability in the
premises, except as set forth in the next subsection. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim with counsel
designated by the Company, who may be outside counsel to the Company but shall
in all events be reasonably satisfactory to the Trustee, and the Trustee shall
cooperate in the defense. In addition, the Trustee may retain one separate
counsel and, if deemed advisable by such counsel, local counsel, and the Company
shall pay the reasonable fees and expenses of such separate counsel and local
counsel. The indemnification herein extends to any settlement, provided that the
Company will not be liable for any settlement made without its consent,
provided, further, that such consent will not be unreasonably withheld.
(c) The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or willful
misconduct.
(d) The Trustee shall have a lien prior to the Notes on all money or
property held or collected by the Trustee to secure the Company's payment
obligations in this Section 7.07, except that held in trust to pay principal,
interest and Additional Amounts, if any, on the Notes. Such liens and the
Company's obligations under this Section 7.07 shall survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(f) or (g) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
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SECTION 7.08. Replacement of the Trustee.
(a) A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
(b) The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying the Company. The Holders of a majority in
principal amount of the Notes then outstanding may remove the Trustee by so
notifying the Trustee and the Company in writing and may appoint a successor
Trustee. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(iii) a Custodian or public officer takes charge of the Trustee or
its property; or
(iv) the Trustee becomes incapable of acting.
(c) 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 a successor
Trustee.
(d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, at the Company's
expense, the Company or the Holders of at least 10% in principal amount of the
Notes then outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(e) If the Trustee after written request by any Holder who has been a
Holder for at least six months fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(f) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to 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 Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided that all sums owing to
the retiring Trustee hereunder have been paid and subject to the lien provided
for in Section 7.07. Notwithstanding the replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07 shall continue
for the benefit of the retiring Trustee with respect to expenses and liabilities
incurred by it prior to such replacement.
(g) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in the
preceding paragraph.
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SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business (including the trust
created by this Indenture) to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
SECTION 7.10. Eligibility, Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss. 310(a)(1). The Trustee shall always have a combined capital and
surplus as stated in Section 10.10. The Trustee is subject to TIA ss. 310(b)
regarding the disqualification of a trustee upon acquiring a conflicting
interest.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship set forth in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01. Discharge of Indenture.
When:
(a) the Company delivers to the Trustee for cancellation all Notes
theretofore authenticated pursuant to this Indenture (other than any other
Notes which have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes have been authenticated and delivered)
and not theretofore cancelled; or
(b) (i) all the Notes not theretofore cancelled or delivered to the
Trustee for cancellation have become due and payable, and (ii) the Company
deposits with the Trustee, the Paying Agent or the Conversion Agent, as
applicable, in trust, amounts in cash or shares of Common Stock (as
applicable in accordance with the terms hereof) sufficient to pay, whether
at stated maturity, or any Redemption Date, or any Purchase Date, or any
Fundamental Change Repurchase Date, or upon conversion or otherwise, all
of the Notes (other than any Notes which have been mutilated, destroyed,
lost or stolen and in lieu of or in substitution for which other Notes
have been authenticated and delivered) not theretofore cancelled or
delivered to the Trustee for cancellation, including principal, interest
and Additional Amounts, if any, due and (iii) the Company also pays, or
causes to be paid, all other sums payable hereunder by the Company,
then this Indenture shall cease to be of further effect, except as to:
49
(A) rights of registration of transfer, substitution, replacement and
exchange and conversion of Notes;
(B) rights hereunder of Holders to receive payments of principal of and
interest and Additional Amounts, if any, and the Redemption Price,
Purchase Price and Fundamental Change Repurchase Price, if applicable, on,
the Notes;
(C) the obligations under Sections 2.03 and 8.05 hereof; and
(D) the rights, obligations and immunities of the Trustee hereunder,
and the Trustee, on written demand of the Company accompanied by an Officer's
Certificate and an Opinion of Counsel as required by Section 10.04, and at the
Company's cost and expense, shall execute proper instruments acknowledging
satisfaction and discharging of this Indenture. The Company, however, hereby
agrees to reimburse the Trustee for any costs or expenses thereafter reasonably
and properly incurred by the Trustee and to compensate the Trustee for any
services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Notes.
SECTION 8.02. Deposited Monies to Be Held in Trust by Trustee.
Subject to Section 8.04, all monies deposited with the Trustee pursuant to
Section 8.01 shall be held in trust and applied by it to the payment either
directly or through the Paying Agent, to the Holders of the particular Notes for
the payment of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal, interest and Additional
Amounts, if any, and the Redemption Price, Purchase Price and Fundamental Change
Repurchase Price, if applicable.
SECTION 8.03. Paying Agent to Repay Monies Held.
Upon the satisfaction and discharge of this Indenture, all monies then
held by any Paying Agent (other than the Trustee and not pursuant to Section
8.01) shall, upon the Company's demand, be repaid to it or paid to the Trustee,
and thereupon such Paying Agent shall be released from all further liability
with respect to such monies.
SECTION 8.04. Return of Unclaimed Monies.
Subject to the requirements of applicable law, any monies deposited with
or paid to the Trustee for payment of the principal of or interest or Additional
Amounts, if any, and the Redemption Price, Purchase Price and Fundamental Change
Repurchase Price, if applicable, on the Notes and not applied but remaining
unclaimed by the Holders thereof for two years after the date upon which the
principal of or interest or Additional Amounts, if any, and the Redemption
Price, Purchase Price and Fundamental Change Repurchase Price, if applicable, on
such Notes, as the case may be, have become due and payable, shall be repaid to
the Company by the Trustee on written demand; provided, however, that the
Company, or the Trustee at the written request and expense of the Company, shall
have first caused notice of such payment to the Company to be mailed to each
Holder entitled thereto no less than 30 days prior to such payment and all
liability of the Trustee shall thereupon cease with respect to such monies; and
the Holder shall
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thereafter look only to the Company for any payment which such Holder may be
entitled to collect unless an applicable abandoned property law designates
another person.
SECTION 8.05. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 8.02 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.01 until such time as the Trustee or the Paying Agent is permitted to apply
all such money in accordance with Section 8.02; provided, however, that if the
Company makes any payment of principal of, or interest or Additional Amounts, if
any, on, and the Redemption Price, Purchase Price and Fundamental Change
Repurchase Price, if applicable, on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders
thereof to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without the Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Notes without notice to or the consent of any Holder for the purposes of:
(a) curing any ambiguity, defect or inconsistency or making any other
changes in the provisions of this Indenture which the Company and the Trustee
may deem necessary or desirable, provided that such amendment does not
materially and adversely affect the rights of the Holders under this Indenture;
(b) providing for the assumption of the covenants and obligations of the
Company hereunder and in the Notes in the circumstances required by Section
5.01;
(c) providing for conversion rights of Holders in the event of
consolidation, merger, or sale of all or substantially all of the assets of the
Company as required to comply with Sections 5.01 and/or 11.06;
(d) in the case of any reclassification, change, consolidation, merger,
share exchange or conveyance to which Section 11.06 applies, modifying the
provisions of this Indenture relating to the rights of Holders to repurchase
Notes following a Fundamental Change, as provided in Section 4.09;
(e) reducing the Conversion Price;
(f) evidencing and providing for the acceptance of appointment under this
Indenture of a successor Trustee;
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(g) making any change that would provide any additional rights or benefits
to the Holders or that does not adversely affect the legal rights under this
Indenture of any such Holder;
(h) complying with the requirements of the Commission in order to effect
or maintain the qualification of the Indenture under the TIA; or
(i) modifying the restrictions on, and procedures for, resale and other
transfers of the Notes or shares of Common Stock issuable upon conversion of the
Notes pursuant to law, regulation or practice relating to the resale or transfer
of restricted securities generally.
SECTION 9.02. With the Consent of Holders.
Subject to Section 6.07, the Company and the Trustee may amend or
supplement this Indenture or the Notes with the consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for the Notes).
Subject to Sections 6.04 and 6.07, the Company and the Trustee may waive
any existing Default or compliance in any particular instance by the Company
with any provision of this Indenture or the Notes with the consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for the Notes).
However, without the consent of each Holder affected, an amendment or
waiver under this Section may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or,
except as permitted pursuant to Section 9.01, alter the redemption or repurchase
provisions with respect thereto;
(c) reduce the rate of or amount of, or change the time for payment of,
interest, including defaulted interest and Additional Amounts, if any, and any
Redemption Price, Purchase Price or Repurchase Price, if applicable, on any
Note;
(d) waive a Default or Event of Default in the payment of principal of or
interest or Additional Amounts, if any, on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding and a waiver of the payment
default that resulted from such acceleration);
(e) make any Note payable in money other than as provided for herein and
in the Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or Events of Default or the rights of Holders to
receive payments of principal of or
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interest or Additional Amounts, if any, and any Redemption Price, Purchase Price
or Fundamental Change Repurchase Price, if applicable, on the Notes;
(g) waive the payment of any Fundamental Change Repurchase Price with
respect to any Note;
(h) increase the Conversion Price or, except as permitted herein
(including Section 9.01), modify the provisions contained herein relating to
conversion of the Notes in a manner adverse to the Holders thereof; or
(i) impair the right of the Holders to institute suit for the enforcement
of any payment with respect to, or conversion of, the Notes or the provisions of
clauses (a) through (i) of this Section 9.02.
To secure a consent of the Holders under this Section, it shall not be
necessary for such Holders to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to Holders a notice briefly describing the amendment or
waiver.
SECTION 9.03. Compliance with the Trust Indenture Act.
Every amendment to this Indenture or the Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of a
Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. However,
any such Holder or subsequent Holder may revoke the consent as to his or her
Note or portion of a Note if the Trustee receives the notice of revocation
before the date on which the Trustee receives an Officer's Certificate
certifying that the Holders of the requisite principal amount of Notes have
consented to the amendment or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment or
waiver. If a record date is fixed, then notwithstanding the provisions of the
immediately preceding paragraph, those persons who were Holders at such record
date (or their duly designated proxies), and only those persons, shall be
entitled to consent to such amendment or waiver or to revoke any consent
previously given, whether or not such persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from Holders of the principal amount of Notes
required hereunder for such amendment or waiver to be effective shall have also
been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every Holder,
unless it is of the type described in clauses (a) - (i) of Section 9.02. In such
case, the amendment or waiver
53
shall only bind each Holder who has consented to it and every subsequent Holder
of a Note or portion of a Note that evidences the same debt as the consenting
Holder's Note.
SECTION 9.05. Notation on or Exchange of Convertible Subordinated Notes.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article 9 may, and shall if required by the Trustee,
bear a notation in the form approved by the Trustee as to any matter provided
for in such supplemental indenture. If the Company shall so determine, new Notes
so modified as to conform, in the opinion of the Company and the Trustee, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for outstanding Notes
without charge to the Holders, except as specified in Section 2.07.
SECTION 9.06. Trustee Protected.
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article 9 if such amendment or supplemental indenture does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If such amendment or supplemental indenture does adversely affect the rights,
duties, liabilities or immunities of the Trustee, the Trustee may, but need not,
sign it. In signing such amendment or supplemental indenture, the Trustee shall
be entitled to receive, and shall be fully protected in relying upon, an
Officer's Certificate and an Opinion of Counsel as conclusive evidence that such
amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE 10
GENERAL PROVISIONS
SECTION 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA ss. 318(c), such duties imposed by such section of the TIA
shall control. If any provision of this Indenture expressly modifies or excludes
any provision of the TIA that may be so modified or excluded, the Indenture
provision so modifying or excluding such provision of the TIA shall be deemed to
apply.
SECTION 10.02. Notices.
Any notice or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in person or mailed by first-class mail,
with postage prepaid (registered or certified, return receipt requested), or
sent by facsimile or overnight air couriers guaranteeing next day delivery, to
the other's address as stated in Section 10.10. The Company or the Trustee by
notice to the other may designate additional or different addresses for
subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given at the time delivered by hand, if personally
delivered; five business days
54
after being deposited in the mail, postage prepaid, if mailed; when transmission
is confirmed, if transmitted by facsimile; and the next business day after
timely delivery to the courier, if sent by overnight air courier guaranteeing
next day delivery. Notwithstanding the foregoing, all notices to the Trustee
shall be effective only upon receipt by a Trust Officer.
Any notice or communication to a Holder shall be mailed by first-class
mail, with postage prepaid, to his or her address shown on the Register kept by
the Registrar. Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication to a Holder is sent in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company sends a notice or communication to Holders, it shall send a
copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
SECTION 10.03. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and the Paying Agent shall have the protection of TIA ss.
312(c).
SECTION 10.04. 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:
(a) an Officer's Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 10.05)
stating that, in the opinion of such person, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 10.05)
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall include:
(a) a statement that the person making such certificate or opinion has
read such covenant or condition;
55
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
Any Officer's Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such Officer knows that the opinion
with respect to the matters upon which his or her certificate may be based as
aforesaid is erroneous. Any Opinion of Counsel may be based, insofar as it
relates to factual matters, upon certificates, statements or opinions of, or
representations by an officer or officers of the Company, or other persons or
firms deemed appropriate by such counsel, unless such counsel knows that the
certificates, statements or opinions or representations with respect to the
matters upon which his or her opinion may be based as aforesaid are erroneous.
Any Officer's Certificate, statement or Opinion of Counsel may be based,
insofar as it relates to accounting matters, upon a certificate or opinion of or
representation by an accountant (who may be an employee of the Company), or firm
of accountants, unless such Officer or counsel, as the case may be, knows that
the certificate or opinion or representation with respect to the accounting
matters upon which his or her certificate, statement or opinion may be based as
aforesaid is erroneous.
SECTION 10.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by, or a meeting of,
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 10.07. Legal Holidays.
The term "business day" means any day other than a Saturday, a Sunday or a
day on which banking institutions in The City of New York are authorized or
required by law, regulation or executive order to close. If any Interest Payment
Date, the Maturity Date, Purchase Date or Fundamental Change Repurchase Date
falls on a day that is not a business day, the required payment of principal of,
interest and Additional Amounts, if any, on and the Purchase Price and
Fundamental Change Repurchase Price with respect to any Note will be made on the
next succeeding business day as if made on the date that such payment was due
and no interest will accrue on that payment for the period from and after the
Interest Payment Date, the Maturity Date, the relevant Purchase Date or the
Fundamental Change Repurchase Date, as applicable, to the date of payment on the
next succeeding business day.
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SECTION 10.08. No Recourse Against Others.
No director, officer, employee, stockholder or Affiliate of the Company
shall have any liability or any obligations under the Notes or this Indenture or
for any claim based on, in respect of, or by reason of such obligations or the
creation of such obligations. Each Holder by accepting a Note waives and
releases all such liability with respect to each director, officer, employee,
stockholder and Affiliate of the Company. This waiver and release are part of
the consideration for the Notes. Each of such directors, officers, employees,
stockholders and Affiliates of the Company is a third party beneficiary of this
Section 10.08.
SECTION 10.09. Counterparts.
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
SECTION 10.10. Other Provisions.
The Company initially appoints the Trustee as Paying Agent, Registrar,
Conversion Agent and authenticating agent. The reporting date for Section 7.06
is May 15 of each year. The first reporting date is the May 15 following the
issuance of the Notes hereunder.
The Trustee shall always have, or shall be a Subsidiary of a bank or bank
holding company that has, a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition.
The Company's address is:
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, Pennsylvania 19355
Attention: Chief Financial Officer
Facsimile No.: (610) 889-2161
The Trustee's address is:
Wachovia Bank, National Association
123 South Broad Street
Philadelphia, Pennsylvania 19109
Attention: Corporate Trust Administration, PA1249
Facsimile: (215) 670-6340
SECTION 10.11. Governing Law.
The laws of the State of New York shall govern this Indenture and the
Notes.
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SECTION 10.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such other indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 10.13. Successors.
All agreements of the Company in this Indenture and the Notes shall bind
its successor. All agreements of the Trustee in this Indenture shall bind its
successor.
SECTION 10.14. Severability.
In case any provision in this Indenture or in the Notes 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 10.15. Table of Contents, Headings, etc.
--------------------------------
The Table of Contents, Cross-Reference Table and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
ARTICLE 11
CONVERSION OF CONVERTIBLE SUBORDINATED NOTES
SECTION 11.01. Right to Convert.
Each Holder shall have the right to convert its Notes into shares of
Common Stock at any time during the period stated in Article 12 hereof and
paragraph 9 of the Note, the form of which is attached hereto as Exhibit A. The
principal amount of any Note held by such holder, or any portion of such
principal amount which is $1,000 or an integral multiple thereof, may be
converted, subject to the Company's election to pay cash provided in Section
11.02, into that number of fully paid and non-assessable shares of Common Stock
obtained by dividing the principal amount of the Note or portion thereof to be
converted by the Conversion Price in effect at such time, as set forth in
paragraph 9 of the Note, subject to adjustment as herein set forth. A Holder is
not entitled to any rights of a holder of Common Stock until such Holder has
converted his or her Notes into Common Stock, and only to the extent such Notes
are deemed to have been converted to Common Stock pursuant to this Article 11
and Article 12 hereof.
SECTION 11.02. Exercise of Conversion Privilege; Issuance of Common Stock
and/or Payment of Cash on Conversion; No Adjustment for Interest or Dividends.
(a) To exercise, in whole or in part, the conversion privilege with
respect to any Note, the Holder shall surrender such Note, duly endorsed, at an
office or agency maintained by the Company pursuant to Section 2.03, accompanied
by funds, if any, required by Section 11.02(e) hereof, and shall give written
notice of conversion in the form provided on the Notes (or such
58
other notice which is acceptable to the Company), duly signed and completed, to
the office or agency stating that the Holder elects to convert such Note or such
portion thereof specified in said notice. Such notice shall also state the name
or names (with address or addresses) in which the certificate or certificates
for shares of Common Stock which are issuable on such conversion shall be
issued, and shall be accompanied by transfer taxes, if required pursuant to
Section 11.07.
(b) Each Note surrendered for conversion shall, unless the shares issuable
on conversion are to be issued in the same name as the registration of such
Note, be duly endorsed by, or be accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the Holder or his or her duly
authorized attorney. The Holder will not be required to pay any tax or duty
which may be payable in respect of the issue or delivery of Common Stock on
conversion, but will be required to pay any tax or duty which may be payable in
respect of any transfer involved in the issue or delivery of Common Stock in a
name other than the same name as the registration of such Note. Certificates
representing shares of Common Stock will not be issued or delivered unless all
taxes and duties, if any, payable by the Holder have been paid. In case any Note
of a denomination of an integral multiple greater than $1,000 is surrendered for
partial conversion, and subject to Section 2.02, the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder surrendering such Note,
without charge to him or her, a new Note or Notes in authorized denominations in
an aggregate principal amount equal to the unconverted portion of the
surrendered Note.
(c) The Holders' right to convert Notes into shares of Common Stock is
subject to the Company's right to elect to instead pay such Holder, in whole or
in part, the amount of cash set forth in the next succeeding sentence in lieu of
delivering such shares of Common Stock; provided, however, that if an Event of
Default (other than a default in a cash payment upon conversion of the Notes)
shall have occurred and be continuing or during any period when the Company is
prohibited from making payments on the Notes pursuant to Article 13 hereof, the
Company shall deliver shares of Common Stock (and cash in lieu of fractional
shares of Common Stock) in accordance with this Article 11, whether or not the
Company has delivered a notice pursuant to Section 4.03 or 11.02(d) to the
effect that the Notes would be paid in cash. The amount of cash to be paid
pursuant to Section 11.02 for each $1,000 of principal amount of a Note upon
conversion shall be equal to (i) the average of the last reported sale prices of
Common Stock for the five consecutive trading days immediately following the
date of the Company's notice of election to deliver cash pursuant to Section
11.02(d) below, if the Company has not given notice of redemption pursuant to
Section 4.03, multiplied by the Conversion Rate in effect on the Conversion Date
or (ii) the Market Price of shares of Common Stock multiplied by the Conversion
Rate in effect on such Conversion Date, in the case of a conversion following
the Company's notice of redemption pursuant to Section 4.03 specifying that the
Company intends to deliver cash upon conversion.
(d) Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the date on which the requirements set forth above
in this Section 11.02 have been satisfied as to such Note (or portion thereof)
(the "Conversion Date"). Except as otherwise provided below, the Company shall
deliver to the Holder through the Conversion Agent as soon as practicable after
the Conversion Date a certificate for the number of shares of Common Stock
issuable upon the conversion and cash in lieu of any fractional share of Common
Stock determined pursuant to Section 11.03. Within two business days following
the Conversion Date,
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the Company shall deliver to the Holder, through the Conversion Agent, written
notice of whether such Note shall be converted into shares of Common Stock or
paid in cash, unless the Company shall have delivered such notice previously
pursuant to Section 4.03. If the Company shall have notified the Holder that all
of such Note shall be converted into shares of Common Stock, the Company shall
deliver to the Holder through the Conversion Agent no later than the fifth
business day following the Conversion Date a certificate for the number of
shares of Common Stock issuable upon the conversion and cash in lieu of any
fractional share determined pursuant to Section 11.03. Except as provided in the
proviso to Section 11.02(c) above, if the Company shall have notified the Holder
that all or a portion of such Note shall be paid in cash, the Company shall
deliver to the Holder surrendering such Note the amount of cash payable with
respect to such Note no later than the tenth business day following such
Conversion Date, together with a certificate for the number of shares of Common
Stock issuable upon the conversion and cash in lieu of any fractional share
determined pursuant to Section 11.03. Except as provided in the proviso to
Section 11.02(c) above, the Company may not change its election with respect to
the consideration to be delivered upon conversion of a Note once the Company has
notified the Holder in accordance with this paragraph. If shares of Common Stock
are delivered as consideration, then the Person in whose name the certificate
representing the shares of Common Stock issuable upon conversion is registered
shall be treated as a stockholder of record on and after the Conversion Date;
provided, however, that no surrender of a Note 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 Note shall have been surrendered
for conversion, as if the stock transfer books of the Company had not been
closed. Upon conversion of a Note, such Person shall no longer be a Holder of
such Note and such Note shall be cancelled and no longer outstanding.
(e) Any Note or portion thereof surrendered for conversion during the
period from the close of business on any Regular Record Date immediately
preceding any Interest Payment Date to the opening of business on such Interest
Payment Date shall be accompanied by payment, in funds acceptable to the
Company, of an amount equal to the interest and Additional Amounts, if any,
otherwise payable on such Interest Payment Date on the principal amount being
converted; provided, however, that no such payment need be made if:
(i) there exists at the time of conversion a default in the
payment of principal of or interest or Additional Amounts, if applicable,
on the Notes (including any principal of or interest payable in connection
with a repurchase pursuant to Section 4.08 or Section 4.09 and a
redemption pursuant to Section 4.01); or
(ii) the Company shall have specified a Redemption Date that is
after the Regular Record Date and prior to such Interest Payment Date.
An amount equal to such payment shall be paid by the Company on such
Interest Payment Date to the Holder at the close of business on the Regular
Record Date; provided,
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however, that if the Company defaults in the payment of interest or Additional
Amounts, if applicable, on such Interest Payment Date, such amount shall be paid
to the person who made such required payment.
(f) Except as provided above in this Section 11.02, no adjustment shall be
made for interest and Additional Amounts, if any, accrued on any Note converted
or for dividends on any shares issued upon the conversion of such Note as
provided in this Article 11. Delivery by the Company to the Holder of the Note
converted of the number of shares of Common Stock into which the Note is
convertible, and/or cash instead of such shares as provided in Section 11.02(c),
at the Conversion Price in effect at such time, shall satisfy the obligations of
the Company to pay the principal amount of such Note being converted and the
accrued but unpaid interest on such converted Note through the Conversion Date.
The portion of interest attributable to the period from the later of
August 6, 2003 and the date on which interest was last paid through the
Conversion Date and defaulted interest, if any, with respect to the surrendered
Note 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
shares of Common Stock (together with cash payment, if any, in lieu of
fractional Shares) and/or cash, if any, in exchange for the Note being converted
pursuant to the terms hereof; and such cash and the fair market value of such
shares of Common Stock (together with any such cash payment in lieu of
fractional shares of Common Stock) shall be treated as delivered pro rata, to
the extent thereof, first in exchange for interest accrued through the
Conversion Date and defaulted interest, if any, and the balance, if any, of such
cash and the fair market value of such shares of Common Stock (and any such cash
payment) shall be treated as delivered in exchange for the principal amount of
the Note being converted pursuant to the provisions hereof.
SECTION 11.03. Cash Payments in Lieu of Fractional Shares.
No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of the Notes. If more than one Note shall
be surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Notes (or specified portions thereof to
the extent permitted hereby) so surrendered for conversion. If any fractional
share of stock otherwise would be issuable upon the conversion of any Note or
Notes, the Company shall make an adjustment therefor in cash based upon the
Current Market Price (as defined in Section 11.05(g)) of the Common Stock for
the 5 consecutive trading days immediately preceding the Conversion Date.
SECTION 11.04. Conversion Price.
The Conversion Price shall be as specified in paragraph 9 of the Note, the
form of which is attached as Exhibit A hereto, subject to adjustment as provided
in this Article 11.
SECTION 11.05. Adjustment of Conversion Price.
The Conversion Price shall be adjusted from time to time by the Company as
follows:
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(a) If the Company shall hereafter pay a dividend or make a distribution
to all holders of the outstanding Common Stock in shares of Common Stock, the
Conversion Price in effect at the opening of business on the date following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such Conversion
Price by a fraction of which:
(i) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the Record Date (as defined in
Section 11.05(g) fixed for such determination; and
(ii) the denominator shall be the sum of (1) the number of shares
of Common Stock outstanding at the close of business on the Record Date
(as defined in Section 11.05(g)) fixed for such determination and (2) the
total number of shares of Common Stock constituting such dividend or other
distribution,
such reduction to become effective immediately after the opening of business on
the day following the Record Date. If the dividend or distribution of the type
described in this Section 11.05(a) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.
(b) If the outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and, conversely, if the
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(c) If the Company shall issue rights or warrants to all holders of its
outstanding shares of Common Stock entitling them to subscribe for or purchase,
for a period expiring within 60 days after the date of issuance, shares of
Common Stock at a price per share less than the Current Market Price (as defined
in Section 11.05(g)) on the Record Date fixed for the determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on such Record Date by a fraction of which:
(i) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the Record Date plus the number of
shares which the aggregate offering price of the total number of shares so
offered would purchase at such Current Market Price; and
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(ii) the denominator shall be the number of shares of Common Stock
outstanding on the close of business on the Record Date plus the total
number of additional shares of Common Stock so offered for subscription or
purchase,
such adjustment shall become effective immediately after the opening of business
on the day following the Record Date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock are not delivered pursuant to such rights or warrants, upon the expiration
or termination of such rights or warrants, the Conversion Price shall be
readjusted to be the Conversion Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. If such rights or warrants are not so issued, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in effect
if such date fixed for the determination of stockholders entitled to receive
such rights or warrants had not been fixed. In determining whether any rights or
warrants entitle the Holders to subscribe for or purchase shares of Common Stock
at less than such Current Market Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken into account
any consideration received by the Company for such rights or warrants, and any
amount payable upon exercise thereof, with the value of such consideration, if
other than cash, to be determined by the Board of Directors (whose determination
shall be conclusive and described in a resolution of the Board of Directors).
(d) If the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock shares of any class of Capital Stock of the Company
(other than any dividends or distributions to which Section 11.05(a) applies) or
evidences of its indebtedness or other assets (including securities, but
excluding (i) any rights or warrants of a type referred to in Section 11.05(c)
and (ii) dividends and distributions paid exclusively in cash referred to in
Section 11.05(e)) (the foregoing hereinafter in this Section 11.05(d) called the
"Securities"), then, in each such case, the Conversion Price shall be reduced so
that the same shall be equal to the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on such
Record Date (as defined in Section 11.05(g)) with respect to such distribution
by a fraction of which:
(i) the numerator shall be the Current Market Price (determined
as provided in Section 11.05(g)) on such Record Date less the fair market
value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a resolution of the Board of Directors), on
such Record Date of the portion of the Securities so distributed
applicable to one share of Common Stock; and
(ii) the denominator shall be such Current Market Price on such
Record Date,
such reduction to become effective immediately after the opening of business on
the day following the Record Date; provided, however, that in the event the then
fair market value (as so determined) of the portion of the Securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive upon conversion of a Note (or any portion thereof) the amount
of Securities such Holder would have received had such Holder converted such
Note (or portion thereof)
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immediately prior to such Record Date. If such dividend or distribution is not
so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price that would then be in effect if such dividend or distribution
had not been declared. If the Board of Directors determines the fair market
value of any distribution for purposes of this Section 11.05(d) by reference to
the actual or when issued trading market for any securities comprising all or
part of such distribution, it must in doing so consider the prices in such
market over the same period used in computing the Current Market Price pursuant
to Section 11.05(g) to the extent possible.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's Capital Stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"):(i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 11.05(d) (and no adjustment to the Conversion Price
under this Section 11.05(d) shall be required) until the occurrence of the
earliest Trigger Event, whereupon such rights and warrants shall be deemed to
have been distributed and an appropriate adjustment to the Conversion Price
under this Section 11.05(d) shall be made. If any such rights or warrants,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to Trigger Events, then the occurrence of each such
event shall be deemed to be such date of issuance and Record Date with respect
to new rights or warrants (and a termination or expiration of the existing
rights or warrants without exercise by the holder thereof). In addition, in the
event of any distribution (or deemed distribution) of rights or warrants, or any
Trigger Event with respect thereto, that was counted for purposes of calculating
a distribution amount for which an adjustment to the Conversion Price under this
Section 11.05(d) was made, (1) in the case of any such rights or warrants which
shall all have been redeemed or repurchased without exercise by any holders
thereof, the Conversion Price shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the case may
be, as though it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder or holders of Common Stock with respect to
such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Common Stock as of the date of such redemption
or repurchase, and (2) in the case of such rights or warrants which shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Price shall be readjusted as if such rights and warrants had not been
issued.
Notwithstanding any other provision of this Section 11.05(d) to the
contrary, rights, warrants, evidences of indebtedness, other securities, cash or
other assets (including, without limitation, any rights distributed pursuant to
any stockholders rights plan, and any rights or warrants distributed or deemed
to be distributed upon the occurrence of a Trigger Event) shall be deemed not to
have been distributed for purposes of this Section 11.05(d) if the Company
elects to reserve such rights, warrants, evidences of indebtedness, other
securities, cash or other assets (including, without limitation, any rights
distributed pursuant to any stockholders rights plan, and any rights or warrants
distributed or deemed to be distributed upon the occurrence of a Trigger Event)
for distribution to each Holder who converts a Note (or any portion thereof) so
that such Holder shall be entitled to receive upon such conversion, in addition
to the shares of Common Stock issuable upon such conversion, the amount and kind
of such distributions that such Holder
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would have been entitled to receive if such Holder had, immediately prior to the
applicable Record Date, converted such Note into Common Stock.
For purposes of this Section 11.05(d) and Sections 11.05(a) and (c), any
dividend or distribution to which this Section 11.05(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock to which Section 11.05(a) or Section 11.05(c)
applies, or both, shall be deemed instead to be (1) a dividend or distribution
of the evidences of indebtedness, assets, shares of Capital Stock, rights or
warrants other than such shares of Common Stock or rights or warrants to which
Section 11.05(a) or Section 11.05(c) applies (and any Conversion Price reduction
required by this Section 11.05(d) with respect to such dividend or distribution
shall then be made) immediately followed by (2) a dividend or distribution of
such shares of Common Stock or such rights or warrants to which Section 11.05(a)
or Section 11.05(c) applies (and any further Conversion Price reduction required
by Sections 11.05(a) and (c) with respect to such dividend or distribution shall
then be made, except that (A) the Record Date of such dividend or distribution
shall be substituted for "the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution," "Record Date fixed for
such determination" and "Record Date" within the meaning of Section 11.05(a) and
for "the date fixed for the determination of stockholders entitled to receive
such rights or warrants," "the Record Date fixed for the determination of the
stockholders entitled to receive such rights or warrants" and "such Record Date"
within the meaning of Section 11.05(c) and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such determination" within the
meaning of Section 11.05(a)).
(e) If the Company shall, by dividend or otherwise, distribute cash to all
holders of its Common Stock (excluding any cash that is distributed as part of a
distribution referred to in Section 11.05(d)), then, and in each such case, the
Conversion Price shall be reduced, so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the Record Date with respect to such distribution by a
fraction:
(i) the numerator of which shall be equal to the Current Market
Price on the Record Date less the per share amount of such distribution;
and
(ii) the denominator of which shall be equal to the Current Market
Price on such Record Date,
such adjustment to be effective immediately after the opening of business on the
day following the Record Date. If such dividend or distribution is not so paid
or made, the Conversion Price shall again be adjusted to be the Conversion Price
that would then be in effect if such dividend or distribution had not been
declared.
(f) If a tender offer or exchange offer (other than the purchase of Notes
on any Purchase Date or as part of a Fundamental Change) made by the Company or
any of its subsidiaries for all or any portion of the Common Stock and such
tender offer or exchange offer (as amended upon the expiration thereof) requires
the payment to stockholders (based on the acceptance (up to any maximum
specified in the terms of the tender offer or exchange offer) of Purchased
Shares (as defined below)) of cash and the fair market value (as determined by
the
65
Board of Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors) of any other consideration included in the
payment per share of Common Stock exceeds the last reported sale price per share
of the Common Stock on the trading day next succeeding the last date on which
tenders or exchanges could have been made pursuant to such tender offer or
exchange offer (the "Expiration Time"), then, and in each such case, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
close of business on the date of the Expiration Time by a fraction of which:
(i) the numerator shall be the number of shares of Common Stock
outstanding (including any Purchased Shares) on the Expiration Time
multiplied by the Current Market Price of the Common Stock as of the
Expiration Time; and
(ii) the denominator shall be the sum of (x) the fair market value
(determined as aforesaid), as of the expiration of the tender offer or
exchange offer, of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of the
tender offer) of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased Shares)
as of the Expiration Time and the Current Market Price of the Common Stock
as of the Expiration Time,
such reduction to be effective immediately after the opening of business on the
day following the date of the Expiration Time. If the Company is obligated to
purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such tender offer had not
been made. If the application of this Section 11.05(f) to any tender offer would
result in an increase in the Conversion Price, no adjustment shall be made for
such tender offer under this Section 11.05(f).
(g) For purposes of this Section 11.05, the following terms shall have the
meaning indicated:
(1) "Current Market Price" means the average of the last reported sale
prices per share of Common Stock for, unless otherwise specified herein, the 10
consecutive trading days ending on the earlier of the date of determination and
the day before the "ex" date (as hereinafter defined) with respect to the
distribution requiring such computation (or, if such trading day is not a
trading day, the next preceding trading day), appropriately adjusted to take
into account the occurrence during such period of any event described in Section
11.05(a), (b), (c), (d), (e) or (f); subject, however, to the conditions set
forth in this Section 11.05. For purposes of any computation under Section
11.05(f), the Current Market Price on any date shall be deemed to be the average
of the last reported sale prices per share of Common Stock for such day and the
next two succeeding trading days, appropriately adjusted to take into account
the occurrence of any event (other than the tender offer or exchange offer
requiring such computation) during the period of computation that requires an
adjustment to the Conversion Price pursuant to Section 11.05(a), (b), (c), (d),
(e) or (f). Notwithstanding the foregoing, whenever successive adjustments to
the Conversion Price are called for pursuant to this Section 11.05, such
adjustments shall be made to the Current Market Price as may be necessary or
appropriate to effectuate the intent of this Section 11.05 and to avoid unjust
or inequitable results as determined in good faith by the Board of Directors.
66
The term "ex" date, (1) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
on the relevant exchange or in the relevant market from which the closing price
was obtained without the right to receive such issuance or distribution, (2)
when used with respect to any subdivision or combination of shares of Common
Stock, means the first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective, and (3) when used with respect to any tender or
exchange offer means the first date on which the Common Stock trades regular way
on such exchange or in such market after the Expiration Time of such offer.
(2) "fair market value" shall mean the amount which a willing buyer would
pay a willing seller in an arm's length transaction.
(3) "last reported sale price" with respect to any securities on any day
means the closing sale price per share (or, if no closing sale price is
reported, the average of the bid and asked prices or, if more than one in either
case, the average of the average bid and the average asked prices) on such day
as reported in composite transactions for the principal U.S. securities exchange
on which such security is traded or, if such security is not listed on a U.S.
national or regional securities exchange, as reported by the Nasdaq National
Market. If such security is not listed for trading on a U.S. national or
regional securities exchange and not reported by the Nasdaq National Market on
the relevant date, the "closing price" shall be the last quoted bid price for
such security in the over-the-counter market on the relevant date as reported by
the National Quotation Bureau or similar organization. If such security is not
so quoted, the "closing price" shall be the average of the mid-point of the last
bid and asked prices for such security on the relevant date from each of at
least three nationally recognized independent investment banking firms selected
by the Company for such purpose.
(4) "Record Date" shall mean, with respect to any dividend, distribution
or other transaction or event in which the holders of Common Stock have the
right to receive any cash, securities or other property or in which the Common
Stock (or other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
(5) "trading day" shall mean (x) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another U.S. national or
regional securities exchange, a day on which the New York Stock Exchange or such
other U.S. national or regional securities exchange is open for business or (y)
if the applicable security is quoted on the Nasdaq National Market, a day on
which trades may be made thereon, or (z) if the applicable security is not so
listed, admitted for trading or quoted, any business day (as defined herein).
67
(h) The Company may make such adjustments in the Conversion Price, in
addition to those required by Sections 11.05(a), (b), (c), (d), (e) or (f), as
the Board of Directors considers to be advisable to avoid or diminish any
potential income tax liability to holders of Common Stock or rights to purchase
Common Stock which may result from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes.
The Company from time to time may, to the extent permitted by law, reduce
the Conversion Price by any amount for any period of at least 20 days, if the
Board of Directors has made a determination that such reduction would be in the
Company's best interests, which determination shall be conclusive and described
in a resolution of the Board of Directors. The reduction in Conversion Price
shall be irrevocable during this period. Whenever the Conversion Price is
reduced pursuant to the preceding sentence, the Company shall mail to the
Holders at his or her last address appearing on the Register maintained for that
purpose a notice of the reduction at least 15 days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Conversion Price then in effect; provided, however, that any adjustments which
by reason of this Section 11.05(i) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article 11 shall be made by the Company and shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may be.
No adjustment need be made for a change in the par value or no par value
of the Common Stock.
(j) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee an Officer's Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the Conversion Price
to each Holder at his or her last address appearing on the Register maintained
for that purpose within 20 days of the effective date of such adjustment.
Failure to deliver such notice shall not affect the legality or validity of any
such adjustment.
(k) In any case in which this Section 11.05 provides that an adjustment
shall become effective immediately after a Record Date for an event, the Company
may defer until the occurrence of such event issuing to the Holder of any Note
converted after such Record Date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment.
(l) For purposes of this Section 11.05, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common
68
Stock. The Company shall not pay any dividend or make any distribution on shares
of Common Stock held in the treasury of the Company.
SECTION 11.06. Effect of Reclassification, Consolidation, Merger or Sale.
If any of the following events occur:(i) any reclassification or change of
the outstanding shares of Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation, merger, share
exchange or combination of the Company with another corporation as a result of
which holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, other than a consolidation, merger, share exchange or
combination in which the Company is the continuing corporation and which does
not result in reclassification (other than a change in name, or par value, or
from par value to no par value, or from no par value to par value or as a result
of a subdivision or combination), conversion, exchange or cancellation of the
Common Stock, or (iii) any sale or conveyance or other disposition of all or
substantially all of the properties and assets of the Company to any other
corporation as a result of which holders of Common Stock shall be entitled to
receive stock, other securities or other property or assets (including cash)
with respect to or in exchange for such Common Stock, then the Company or the
successor or purchasing corporation, as the case may be, shall execute with the
Trustee a supplemental indenture (which shall comply with the TIA as in force at
the date of execution of such supplemental indenture if such supplemental
indenture is then required to so comply) providing that the Notes shall be
convertible into the kind and amount of shares of stock and other securities or
property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, share exchange, combination, sale, conveyance or
other disposition by a holder of a number of shares of Common Stock issuable
upon conversion of the Notes (assuming, for such purposes, a sufficient number
of authorized shares of Common Stock available to convert all such Notes)
immediately prior to such reclassification, change, consolidation, merger, share
exchange, combination, sale, conveyance or other disposition assuming such
holder of Common Stock did not exercise his or her rights of election, if any,
as to the kind or amount of securities, cash or other property receivable upon
such reclassification, change, consolidation, merger, share exchange, sale,
conveyance or other disposition (provided that, if the kind or amount of
securities, cash or other property receivable upon such reclassification,
change, consolidation, merger, share exchange, sale, conveyance or other
disposition is not the same for each share of Common Stock in respect of which
such rights of election have not been exercised ("non-electing share"), then,
for the purposes of this Section 11.06, the kind and amount of securities, cash
or other property receivable upon such reclassification, change, consolidation,
merger, share exchange, sale, conveyance or other disposition for each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). Such supplemental indenture
shall provide for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 11. If, in the case
of any such reclassification, change, consolidation, merger, share exchange,
combination, sale, conveyance or other disposition, the stock or other
securities and assets receivable thereupon by a holder of shares of Common Stock
includes shares of stock or other securities and assets of a corporation other
than the successor or purchasing corporation, as the case may be, in such
reclassification, change, consolidation, merger, share exchange, combination,
sale, conveyance or other disposition, then such
69
supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the Holders
as the Board of Directors shall reasonably consider necessary by reason of the
foregoing.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder at his or her address appearing on the
Register for that purpose within 20 days after execution of such supplemental
indenture. Failure to deliver such notice shall not affect the legality or
validity of such supplemental indenture.
The above provisions of this Section 11.06 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, share exchanges,
combinations, sales, conveyances and other dispositions.
If this Section 11.06 applies to any event or occurrence, Section 11.05
shall not apply.
SECTION 11.07. Taxes on Shares Issued.
The issue of stock certificates on conversions of the Notes shall be made
without charge to the converting Holder for any tax in respect of the issue
thereof. The Company shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of stock
in any name other than that of the Holder of any Note converted, and the Company
shall not be required to issue or deliver any such stock certificate unless and
until the person or persons requesting the issue thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
SECTION 11.08. Reservation of Shares; Shares to Be Fully Paid; Listing of
Common Stock.
(a) The Company shall provide, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient shares to
provide for the conversion of the Notes from time to time as such Notes are
presented for conversion.
(b) Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company shall take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
(c) The Company covenants that all shares of Common Stock issued upon
conversion of the Notes will be duly authorized and validly issued and fully
paid and non-assessable by the Company and free from all taxes, liens and
charges with respect to the issue thereof.
(d) The Company further covenants that as long as the Common Stock is
listed on the New York Stock Exchange, the Company shall cause all Common Stock
issuable upon conversion of the Notes to be eligible for such listing in
accordance with, and at the times required under, the requirements of the New
York Stock Exchange, and if at any time the Common Stock becomes listed on any
other U.S. national securities exchange, or quoted on the Nasdaq National Market
System or any other automated quotation system, the Company shall
70
cause all Common Stock issuable upon conversion of the Notes to be so listed or
quoted and kept so listed or quoted.
SECTION 11.09. Responsibility of Trustee.
The Trustee shall not at any time be under any duty or responsibility to
any Holders to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee shall not be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Note; and the Trustee makes no representations with
respect thereto. Subject to the provisions of Section 7.01, the Trustee shall
not be responsible for any failure of the Company to issue, transfer or deliver
any shares of Common Stock or stock certificates or other securities or property
or cash upon the surrender of any Note for the purpose of conversion or to
comply with any of the duties, responsibilities or covenants of the Company
contained in this Article 11. Without limiting the generality of the foregoing,
the Trustee shall not have any responsibility to determine the correctness of
any provisions contained in any supplemental indenture entered into pursuant to
Section 11.06 relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Holders upon the
conversion of their Notes after any event referred to in such Section 11.06 or
to any adjustment to be made with respect thereto, but, subject to the
provisions of Section 7.01, may accept as conclusive evidence of the correctness
of any such provisions, and shall fully be protected in relying upon, the
Officer's Certificate and Opinion of Counsel (which the Company shall be
obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
SECTION 11.10. Notice to Holders Prior to Certain Actions.
If (a) the Company declares a dividend (or any other distribution) on its
Common Stock (other than in cash out of retained earnings); or
(b) the Company authorizes the granting to the holders of its Common Stock
of rights or warrants to subscribe for or purchase any share of any class of
Common Stock or any other rights or warrants (other than rights or warrants
referred to in the second paragraph of Section 11.05(d)); or
(c) there is any reclassification of the Common Stock (other than a
subdivision or combination of outstanding Common Stock, or a change in par
value, or from par value to no par value, or from no par value to par value), or
of any consolidation, merger or share exchange to which the Company is a party
and for which approval of any stockholders of the Company is required, or of the
sale or transfer or other disposition of all or substantially all of the assets
of the Company; or
(d) there is any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
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then the Company shall cause to be filed with the Trustee and to be mailed to
each Holder at his or her address appearing on the Register maintained for that
purpose as promptly as possible but in any event at least 15 days prior to the
applicable date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution or rights
or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution
or rights or warrants are to be determined, or (y) the date on which such
reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, share
exchange, sale, transfer, dissolution, liquidation or winding-up. Failure to
give such notice, or any defect therein, shall not affect the legality or
validity of such dividend, distribution, reclassification, consolidation,
merger, share exchange, sale, transfer, dissolution, liquidation or winding-up.
SECTION 11.11. Restriction on Common Stock Issuable Upon Conversion.
(a) Shares of Common Stock to be issued upon conversion of Notes prior to
the effectiveness of a Shelf Registration Statement shall be physically
delivered in certificated form to the Holders converting such Notes, and the
certificate representing such shares of Common Stock shall bear the Restricted
Common Stock Legend unless removed in accordance with Section 11.11(c).
(b) If (i) shares of Common Stock to be issued upon conversion of a Note
prior to the effectiveness of a Shelf Registration Statement are to be
registered in a name other than that of the Holder of such Note or (ii) shares
of Common Stock represented by a certificate bearing the Restricted Common Stock
Legend are transferred subsequently by such Holder, then, unless the Shelf
Registration Statement has become effective and such shares are being
transferred pursuant to the Shelf Registration Statement, the Holder must
deliver to the transfer agent for the Common Stock a certificate in
substantially the form of Exhibit C as to compliance with the restrictions on
transfer applicable to such shares of Common Stock, and neither the transfer
agent nor the registrar for the Common Stock shall be required to register any
transfer of such Common Stock not so accompanied by a properly completed
certificate.
(c) Except in connection with a Shelf Registration Statement, if
certificates representing shares of Common Stock are issued upon the
registration of transfer, exchange or replacement of any other certificate
representing shares of Common Stock bearing the Restricted Common Stock Legend,
or if a request is made to remove such Restricted Common Stock Legend from
certificates representing shares of Common Stock, the certificates so issued
shall bear the Restricted Common Stock Legend, or the Restricted Common Stock
Legend shall not be removed, as the case may be, unless there is delivered to
the Company such satisfactory evidence, which may include an opinion of counsel,
as may be reasonably required by the Company, that neither the legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of the Securities Act and the rules and
regulations promulgated thereunder or that such shares of Common Stock are
securities that are not "restricted" within the meaning of Rule 144. Upon
provision to the Company of such reasonably satisfactory evidence, the Company
shall cause the transfer agent for the Common
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Stock to countersign and deliver certificates representing shares of Common
Stock that do not bear the legend.
ARTICLE 12
CONVERSION EVENTS
SECTION 12.01. Conversion Upon Satisfaction of Sale Price Condition.
Subject to and upon compliance with the provisions of this Indenture, and
notwithstanding the fact that any other condition to conversion has not been
satisfied, the Holders of the Notes shall have the right to convert their Notes
into shares of Common Stock in any calendar quarter after the quarter ending
September 30, 2003 if the last reported sale price of the Common Stock for at
least 20 trading days during the period of 30 consecutive trading days ending on
the last trading day of the immediately preceding calendar quarter is greater
than 130% of the Conversion Price on such last trading day.
SECTION 12.02. Conversion Based on Trading Price of the Notes.
(a) Subject to and upon compliance with the provisions of this Indenture,
and notwithstanding the fact that any other condition to conversion has not been
satisfied, the Holders of the Notes shall have the right to convert their Notes
into shares of Common Stock during the five business day period following any 10
consecutive trading days in which the average of the trading prices for the
Notes for that 10 trading days was less than 98% of the average last reported
sale prices of the Common Stock during such period multiplied by the Conversion
Rate. The "Conversion Rate" shall be equal to the number of shares of Common
Stock issuable upon conversion of a Note per $1,000 of principal amount thereof
(i.e., $1,000 principal amount of the Note being converted divided by the
applicable Conversion Price).
(b) The "trading price" of the Notes on any date of determination means
the average of the secondary market bid quotations per $1,000 principal amount
of Notes obtained by the Trustee for $10,000,000 principal amount of the Notes
at approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers selected by the
Company; provided that if at least three such bids cannot be obtained, but two
such bids are obtained by the Trustee, then the average of the two bids shall be
used. If the Trustee cannot reasonably obtain at least two bids for $10,000,000
principal amount of the Notes from a nationally recognized securities dealer or,
in the reasonable judgment of the Company, the bid quotations are not indicative
of the secondary market value of the Notes, then the trading price of the Notes
will be deemed to be equal to 97.9% of (a) the Conversion Rate of the Notes as
of the applicable date of determination multiplied by (b) the last reported sale
price (as defined in Section 11.05(g)) of the Common Stock on such determination
date.
(c) The Trustee will determine the trading price of the Notes during the
applicable period at the request of the Company. The Company shall make such
request upon receipt of reasonable evidence from the Holder that the condition
to conversion under this Section 12.02 has been or may be satisfied.
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SECTION 12.03. Conversion Upon Credit Rating Event.
Subject to and upon compliance with the provisions of this Indenture, and
notwithstanding the fact that any other condition to conversion has not been
satisfied, the Holders of the Notes shall have the right to convert their Notes
in shares of Common Stock during any period that the Notes are rated by either
Standard & Poor's Rating Group and Moody's Investor Services, Inc. and the
credit rating initially assigned to the Notes by either rating agency is reduced
by two or more ratings levels, if the credit rating assigned to the Notes is
suspended or withdrawn by both such rating agencies or if the Notes are no
longer rated by at least one of such rating agencies.
SECTION 12.04. Conversion Upon Notice of Redemption.
Subject to and upon compliance with the provisions of this Indenture, and
notwithstanding the fact that any other condition to conversion has not been
satisfied, the Holders of the Notes shall have the right to convert into shares
of Common Stock the Notes or the portions thereof that have been called for
redemption pursuant to Article 4 above; provided that such Notes or portions
thereof are surrendered for conversion on or prior to the close of business on
the second business day prior to the Redemption Date in accordance with the
terms of this Indenture.
SECTION 12.05. Conversion Upon Specified Corporate Transactions.
(a) Subject to and upon compliance with the provisions of this Indenture,
and notwithstanding the fact that any other condition to conversion has not been
satisfied, the Holders of the Notes shall have the right to convert their Notes
into shares of Common Stock in the event that the Company (i) issues rights or
warrants to all holders of its outstanding shares of Common Stock entitling them
to subscribe for or purchase, for a period expiring within 60 days after the
date of issuance, shares of Common Stock at a price per share less than the last
reported sale price (as defined in Section 11.05(g)) per share of Common Stock
on the trading day (as defined in Section 11.05(g)) immediately preceding the
date of the issuance; or (ii) distributes to all holders of its outstanding
shares of Common Stock any assets or debt securities of the Company, or rights
to purchase any securities of the Company, which distribution has a value per
share of Common Stock, as determined by the Board of Directors (whose
determination shall be conclusive and described in a resolution of the Board of
Directors), that exceeds 15% of the last reported sale price (as defined in
Section 11.05(g)) per share of Common Stock on the trading day (as defined in
Section 11.05(g)) immediately preceding the date of declaration of such
distribution. The Company shall give notice to the Holders at least 20 business
days prior to the "ex" date (as defined in Section 11.05(g)) for such
distribution, and Notes may be surrendered for conversion at any time thereafter
until the earlier of the close of business on the business day immediately prior
to the "ex" date and the announcement by the Company that such distribution will
not take place, even if the Notes are not otherwise convertible at such time.
(b) Subject to and upon compliance with the provisions of this Indenture,
and notwithstanding the fact that any other condition to conversion has not been
satisfied, the Holders of the Notes shall have the right to convert their Notes
into shares of Common Stock in the event the Company is a party to any
consolidation, merger, share exchange, combination or a
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sale, conveyance or other disposition of all or substantially all of the
property and assets of the Company as set forth in Section 11.06 pursuant to
which the Common Stock would be converted into cash, securities or other
property. In any such case, the Notes may be surrendered for conversion at any
time from and after the date which is 15 days prior to the anticipated effective
date of the transaction until 15 days after the actual effective date of such
transaction and, following the effective time of such transaction, the Notes
shall be convertible 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 Notes immediately prior to the applicable record
date for such transaction.
SECTION 12.06. Notification of Right to Convert.
The Company shall notify the Holders upon determination that Holders are
or will be entitled to convert their Notes, or any portion of such principal
amount which is $1,000 or an integral multiple thereof, into fully paid and
non-assessable shares of Common Stock in accordance with this Article 12 and
paragraph 9 of the Note, by issuing a press release and publishing such
determination on the Company's web site; provided, however, that, after issuing
a press release that the Holders are or will be entitled to convert their Notes,
the Company shall not be required to issue any subsequent press release to the
same effect unless at any time thereafter the Holders shall cease to be entitled
to convert their Notes, in which case the provisions of this Section 12.06 shall
apply at such later time as the Holders once again are or will be entitled to
convert their Notes.
ARTICLE 13
SUBORDINATION
SECTION 13.01. Notes Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Note by its
acceptance thereof likewise covenants and agrees, that to the extent and in the
manner hereinafter set forth in this Article (subject to Section 8.01 hereof
with respect to amounts in cash or or shares of Common Stock previously held in
trust) the indebtedness represented by the Notes and the payment of the
principal amount, premium, if any, plus accrued and unpaid interest and
Additional Amounts, if any, on (including, without limitation, interest, as
provided in the Notes, accruing after the filing of a petition initiating any
proceeding referred to in Section 6.01(f) or 6.01(g), whether or not such
interest accrues after the filing of such petition for purposes for purposes of
Title 11 of the United States Code or is an allowed claim in such proceeding),
any payment of the redemption or repurchase price with respect to, and all fees,
expenses or other amounts payable under or in respect of, each and all of the
Notes (the "Subordinated Debt") are hereby expressly made subordinate and
subject in right of payment to the prior payment in full of all Senior
Indebtedness in cash or other payment satisfactory to holders of Senior
Indebtedness, in their sole discretion, whether outstanding at the date of this
Indenture or thereafter incurred.
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SECTION 13.02. No Payments in Certain Circumstances; Payment Over of
Proceeds upon Dissolution, Etc.
No payment shall be made by or on behalf of the Company for or on account
of any Subordinated Debt, and neither the Trustee nor any holder of any Note
shall take or receive from the Company, directly or indirectly, in cash or other
property or by setoff or in any other manner, including, without limitation,
from or by way of collateral (other than payments made from any trust previously
created pursuant to Section 8.01 hereof) if, at the time of such payment: (a) a
default in the payment of principal, premium, if any, or interest or other
amounts due on or in connection with any Senior Indebtedness, including any
default under any redemption or repurchase obligation, occurs and is continuing
(or, in the case of Senior Indebtedness for which there is a period of grace, in
the event of such a default that continues beyond the period of grace, if any,
specified in the instrument or lease evidencing such Senior Indebtedness),
unless and until such default shall have been cured or waived or shall have
ceased to exist (a "Payment Default"); or (b) a default, other than a payment
default, on Senior Indebtedness occurs and is continuing that then permits
holders of such Senior Indebtedness to accelerate its maturity, or in the case
of a lease, a default occurs and is continuing that permits the lessor to either
terminate the lease or require the Company to make an irrevocable offer to
terminate the lease following an event of default under the lease, and the
Trustee receives a notice of such default (a "Payment Blockage Notice") from the
Company or any other person permitted to give such notice thereunder.
If the Trustee receives any Payment Blockage Notice pursuant to clause (b)
above, no subsequent Payment Blockage Notice shall be effective for purposes of
this Section 13.02 unless and until at least nine months shall have elapsed
since the initial effectiveness of the immediately prior Payment Blockage
Notice. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee (unless such default was
waived, cured or otherwise ceased to exist and thereafter subsequently
reoccurred) shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
The Company may and shall resume payments on and distributions in respect
of the Subordinated Debt (including missed payments, if any): (A) in the case of
a Payment Default, the date upon which the default is cured or waived or ceases
to exist, or (B) in the case of a default referred to in clause (b) of the
second preceding paragraph, the earlier of the date on which such nonpayment
default is cured or waived or ceases to exist or 179 days after such Payment
Blockage Notice is received, if the maturity of such Senior Indebtedness has not
been accelerated, or in the case of any lease, 179 days after notice is received
if the Company has not received notice that the lessor under such lease has
exercised its rights to terminate the lease or require the Company to make an
irrevocable offer to terminate the lease following an event of default under
such lease.
Upon (i) any acceleration of the principal amount due on the Notes or (ii)
any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution,
winding up or total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all principal amount, premium, if any, sinking fund and
interest or other amounts due, or to become due, upon or in connection with all
Senior
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Indebtedness shall first be paid in full in cash or other payment satisfactory
to the holders of such Senior Indebtedness, in their sole discretion, before any
payment (other than Permitted Junior Securities) is made on account of the
Subordinated Indebtedness, and upon any such dissolution or winding up or
liquidation or reorganization any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities (other
than Permitted Junior Securities), to which the Holders of the Notes or the
Trustee under this Indenture would be entitled, except for the provisions
hereof, shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
or by the Holders of the Notes or by the Trustee under this Indenture if
received by them or it, as the case may be, directly to the holders of Senior
Indebtedness (pro rata to each such holder on the basis of the respective
amounts of Senior Indebtedness held by such holder) or their representatives, to
the extent necessary to pay all Senior Indebtedness in full, in cash, or other
payment satisfactory to the holders of such Senior Indebtedness, in their sole
discretion, after giving effect to any concurrent payment or distribution to or
for the holders of Senior Indebtedness, before any payment or distribution is
made to the Holders of the Notes or to the Trustee under the Subordinated Debt.
The consolidation of the Company with, or the merger of the Company into,
another person or the liquidation or dissolution of the Company following the
conveyance or transfer of all or substantially all of its properties and assets
to another person upon the terms and conditions set forth in Article 5 shall not
be deemed a dissolution, winding-up, liquidation, reorganization, assignment for
the benefit of creditors or marshalling of assets and liabilities of the Company
for the purposes of this Section if the person formed by such consolidation or
into which the Company is merged or the person which acquires by conveyance or
transfer all or substantially all of such properties and assets, as the case may
be, shall as part of such consolidation, merger, conveyance or transfer, comply
with the conditions set forth in Article 5.
In the event that, contrary to the foregoing, any payment or distribution
of assets of the Company of any kind or character, whether in cash, property or
securities (other than Permitted Junior Securities), shall be received by the
Trustee or the Holders of the Notes before all Senior Indebtedness is paid in
full in cash or other payment satisfactory to the holders of Senior
Indebtedness, in their sole discretion, such payment or distribution shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness have been issued, as their respective interests may appear, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all such Senior Indebtedness in full in cash or other
payment satisfactory to the holders of such Senior Indebtedness, in their sole
discretion, in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness.
Subject to the payment in full in cash of all Senior Indebtedness or other
payment satisfactory to holders of such Senior Indebtedness, in their sole
discretion, the Holders of the Notes (together with the holders of any other
indebtedness of the Company that is subordinated in right of payment to the
payment in full in cash of all Senior Indebtedness that is not subordinated in
right of payment to the Notes and that by its terms grants such right of
subrogation to the holders thereof) shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distribution of assets of
the Company made on the Senior Indebtedness until the principal of, premium, if
any, and interest on, or amounts payable upon
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redemption or repurchase of, the Notes shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
Senior Indebtedness of any cash, property or securities to which the Holders of
the Notes or the Trustee would be entitled except for the provisions of this
Article, and no payment over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by the Holders of the Notes or the Trustee,
shall, as between the Company, its creditors other than the holders of Senior
Indebtedness, and the Holders of Notes, be deemed to be a payment by the Company
to the holders of or on account of Senior Indebtedness, it being understood that
the provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Notes, on the one hand, and
the holders of Senior Indebtedness, on the other hand.
The holders of the Subordinated Debt, the Trustee and the Company each
will, at the Company's expense and at any time and from time to time, promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable in order to protect any right or
interest granted or purported to be granted hereby or to enable any holder of
Senior Indebtedness to exercise and enforce its rights and remedies hereunder.
No amendment, waiver or other modification of this Indenture, and no
indenture supplemental to this Indenture, may adversely affect the rights or
interests of any holder of Senior Indebtedness hereunder.
SECTION 13.03. Trustee to Effectuate Subordination.
Each holder of a Note by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article and appoints the Trustee
his attorney-in-fact for any and all such purposes.
SECTION 13.04. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder of any Senior
Indebtedness or by any non-compliance by the Company with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Notes, without
incurring responsibility to the Holders of the Notes and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Notes to the holders of Senior Indebtedness, do
any one or more of the following: (a) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior Indebtedness
or otherwise amend or supplement in any manner Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (c) release any
person
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liable in any manner for the collection of Senior Indebtedness; and (d) exercise
or refrain from exercising any rights against the Company and any other person.
The provisions of this Article 13 shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the Senior
Indebtedness is rescinded or must otherwise be returned by any holder of Senior
Indebtedness upon the insolvency, bankruptcy or reorganization of the Company or
otherwise, all as though such payment had not been made.
SECTION 13.05. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company that would prohibit the making of any payment to or by the
Trustee in respect of the Notes. Notwithstanding the provisions of this Article
or any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment to or by the Trustee in respect of the Notes, unless and until a Trust
Officer of the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee, agent or
representative therefor; and, prior to the receipt of any such written notice,
the Trustee shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section 13.05 prior to the date upon which by the terms
hereof any money may become payable for any purpose (including without
limitation the payment of the principal of (and premium, if any) or interest on
any Note), then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary that may be received by it within two
business days prior to such date.
Subject to the provisions of Section 7.01, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a person representing
himself to be a holder of Senior Indebtedness (or a trustee, agent or
representative therefor) to establish that such notice has been given by a
holder of Senior Indebtedness (or a trustee, agent or representative therefor).
In the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article 13, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article 13, and if such evidence is not furnished, the
Trustee may defer any payment to such person pending judicial determination as
to the right of such person to receive such payment.
SECTION 13.06. Reliance on Judicial Order of Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 7.01, and the
Holders of the Notes shall be entitled to rely upon any order or decree entered
by any court of competent jurisdiction in which any insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders of Notes, for the purpose
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of ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 13.07. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness and shall not be liable to any such holders if it shall
in good faith mistakenly pay over or distribute to Holders of Notes or to the
Company or to any other person cash, property or securities to which any holders
of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
With respect to the holders of Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants or obligations as are
specifically set forth in this Article 13, and no implied covenants or
obligations with respect to holders of Senior Indebtedness shall be read into
this Indenture against the Trustee.
SECTION 13.08. Reliance by Holders of Senior Indebtedness on Subordination
Provisions.
Each Holder by accepting a Note acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness, whether such Senior
Indebtedness was created or acquired before or after the issuance of the Notes,
to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness, and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness. Such
holders of the Company's Senior Indebtedness are intended by the parties to the
Indenture to be third party creditor beneficiaries under this Indenture for the
purposes of enforcing the provisions of this Article 13.
SECTION 13.09. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article 13 with respect to any Senior Indebtedness that may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article 13 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07.
SECTION 13.10. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such paying agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article 13 in addition to or in place of the Trustee; provided,
however, that Section 13.09 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
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SECTION 13.11. Certain Conversions and Repurchases Deemed Payment.
For the purposes of this Article 13 only, (a) the issuance and delivery of
Permitted Junior Securities upon conversion of Notes in accordance with Article
11 or upon the repurchase of Notes in accordance with Article 4 shall not be
deemed to constitute a payment or distribution on account of the principal
amount, or premium or interest on the Notes or on account of the purchase or
other acquisition of Notes, and (b) the payment, issuance or delivery of cash,
property or securities (other than Permitted Junior Securities and other than
the payment of cash in lieu of fractional shares of Common Stock in accordance
with Article 11) upon conversion of a Note in accordance with Article 11 or upon
redemption or repurchase of a Note in accordance with Article 4 shall be deemed
to constitute payment on account of the principal of such Note. Nothing
contained in this Article 13 or elsewhere in this Indenture or in any of the
Securities shall prevent the conversion by a Holder of any Notes into Common
Stock in accordance with the provisions for conversion of such Notes set forth
in this Indenture, including the payment of cash in lieu of fractional shares of
Common Stock in accordance with Article 11.
81
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written, signifying their agreements
contained in this Indenture.
VISHAY INTERTECHNOLOGY, INC.
By: /s/ Richard N. Grubb
---------------------------------
Name: Richard N. Grubb
Title: Chief Financial Officer and
Executive Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION
not in its individual capacity
but solely as Trustee
By: /s/ Alan G. Finn
--------------------------
Name: Alan G. Finn
Title: Vice President
82
EXHIBIT A
(Face of Security)
[Global Securities Legend]
[The following legend shall appear on the face of each Global Security:
THIS CONVERTIBLE SUBORDINATED NOTE IS A GLOBAL SECURITY WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY,
THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS CONVERTIBLE
SUBORDINATED NOTE FOR ALL PURPOSES.]
[The following legend shall appear on the face of each Global Security for
which The Depository Trust Company is to be the Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY 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 THE AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED
CONVERTIBLE SUBORDINATED NOTES IN DEFINITIVE REGISTERED FORM IN THE LIMITED
CIRCUMSTANCES REFERRED TO IN THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
NOMINEE.]
A-1
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF,
BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF VISHAY INTERTECHNOLOGY,
INC. THAT THIS SECURITY MAY NOT BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED PRIOR TO THE LATER OF (X) THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO THE SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(k) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION) OR (Y) THREE MONTHS AFTER SUCH
HOLDER CEASES TO BE AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE
SECURITIES ACT) OF VISHAY INTERTECHNOLOGY, INC. OTHER THAN (1) TO VISHAY
INTERTECHNOLOGY, INC., (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF AVAILABLE) UNDER THE SECURITIES ACT, (4) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES AND OTHER JURISDICTIONS AND, IN THE CASE OF ANY OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (3) OR (4), SUBJECT TO THE RIGHTS OF THE COMPANY
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT. THE
HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE
BENEFIT OF VISHAY INTERTECHNOLOGY, INC. THAT IT IS A QUALIFIED INSTITUTIONAL
BUYER. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN
ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES
ACT.
A-2
CUSIP No.:
--------------------
ISIN: $
------------------------- -----------------------
Vishay Intertechnology, Inc.
3 5/8% CONVERTIBLE SUBORDINATED NOTE DUE 2023
VISHAY INTERTECHNOLOGY, INC. promises to pay to CEDE & CO. or
registered assigns, the principal sum of _____________________
($______________) on August 1, 2023, and to pay interest thereon, as provided
on the reverse hereof, until the principal and any unpaid and accrued
interest is paid or duly provided for.
Interest Payment Dates: February 1 and August 1 commencing February 1,
2004
Regular Record Dates: January 15 and July 15
The provisions on the back of this certificate are incorporated as if set
forth on the face hereof.
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
VISHAY INTERTECHNOLOGY, INC.
By:
------------------------------
Name:
Title:
Certificate of Authentication
This is one of the Convertible Subordinated Notes described in the
within-mentioned Indenture.
WACHOVIA BANK, NATIONAL ASSOCIATION
as Trustee
By:
---------------------------------
Authorized Signatory
Dated:
------------------------------
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(Back of Security)
VISHAY INTERTECHNOLOGY, INC.
3 5/8% CONVERTIBLE SUBORDINATED NOTES DUE 2023
1. Interest. Vishay Intertechnology Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. The Company will pay interest (and Additional
Amounts, if any) semiannually in arrears on February 1 and August 1 of each
year, beginning February 1, 2004. Interest on the Notes will accrue from the
most recent Interest Payment Date to which interest has been paid or, if no
interest has been paid, from August 6, 2003. Interest and Additional Amounts, if
any will be computed on the basis of a 360-day year composed of twelve 30-day
months and, in the case of an incomplete month, the actual number of days
elapsed. Interest payments on this Note will include accrued interest from and
including the next preceding Interest Payment Date in respect of which interest
has been paid (or from and including August 6, 2003, if no interest has been
paid), to but excluding the related Interest Payment Date or date of maturity,
as the case may be.
2. Method of Payment. The Company will pay interest and Additional
Amounts, if any, on the Notes (except defaulted interest) to the person in whose
name each Note is registered at the close of business on the January 15 or July
15 (each, a "Regular Record Date") immediately preceding the relevant Interest
Payment Date (other than with respect to a Note or portion thereof (i) with
respect to which a notice of redemption shall have been mailed by the Company in
accordance with Section 4.03 of the Indenture, which notice of redemption shall
specify a Redemption Date that is after the close of business on a Regular
Record Date and prior to the next Interest Payment Date, or (ii) repurchased in
connection with a Fundamental Change on a Fundamental Change Repurchase Date
that is after the close of business on a Regular Record Date and prior to the
next Interest Payment Date, in which case accrued interest and Additional
Amounts, if any, shall be payable (unless such Note or portion thereof is
converted) to the Holder of the Note or portion thereof redeemed or repurchased
in accordance with the applicable provisions of the Indenture).
The Holder must surrender Notes to a Paying Agent to collect principal
payments. The Company will pay the principal and interest, Additional Amounts,
if any, and Redemption Price, Purchase Price and Fundamental Change Repurchase
Price, as applicable), on the Notes at the office or agency of the Company
maintained for such purpose, in money of the United States that at the time of
payment is legal tender for payment of public and private debts. Until otherwise
designated by the Company, the Company's office or agency maintained for such
purpose will be the principal Corporate Trust Office of the Trustee. If the
Notes are held in global form, principal and interest (including Additional
Amounts, if any, Redemption Price, Purchase Price and Fundamental Change
Repurchase Price, as applicable), on the Notes shall be paid by wire transfer in
immediately available funds in accordance with the written wire transfer
instruction supplied by such Holder from time to time to the Trustee and Paying
Agent (if different from the Trustee) at least two days prior to the applicable
Regular Record Date. With respect to Notes held other than in global form, the
Company will make payments by wire transfer of immediately available funds to
the account specified by the Holders thereof or, if no such account is specified
with respect to a Holder, by mailing a check to the Holder's registered address.
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3. Paying Agent, Registrar and Conversion Agent. Wachovia Bank, National
Association (together with any successor Trustee under the Indenture referred to
below, the "Trustee") will act as Paying Agent, Registrar and Conversion Agent.
The Company may change any Paying Agent, Registrar, Conversion Agent or
co-registrar without prior notice. Subject to certain limitations in the
Indenture, the Company or any of its subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture, dated as of
August 6, 2003 (the "Indenture"), between the Company and the Trustee. The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
ss.ss.77aaa-77bbbb) (the "TIA") as in effect on the date of the Indenture. The
Notes are subject to, and qualified by, all such terms, certain of which are
summarized hereon, and Holders are referred to the Indenture and the TIA for a
statement of such terms. The Notes are general unsecured obligations of the
Company limited as provided in the Indenture to $450,000,000 in aggregate
principal amount, unless an election has been made as set forth in Article 2 of
the Indenture to increase such aggregate principal amount to an amount not to
exceed $500,000,000.
Capitalized terms not defined herein have the same meaning as is given to
them in the Indenture.
5. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. As a condition of transfer, the Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents, and the Company and the Registrar may require a Holder to
pay any taxes and fees permitted by the Indenture.
6. Persons Deemed Owners. The person in whose name the Notes are
registered on the Registrar's books will be treated as its owner for all
purposes.
7. Amendments and Waivers. Subject to certain exceptions, the Indenture
and the Notes may be amended or supplemented with the consent of the Holders of
at least a majority in aggregate principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for the Notes), and any existing Default or Event of Default (except a Default
or Event of Default in the payment of principal of or interest or Additional
Amounts, if any, on the Notes) may be waived with the consent of the Holders of
at least a majority in aggregate principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for the Notes).
Without the consent of any Holder, the Indenture or the Notes may be
amended to: (a) cure any ambiguity, defect or inconsistency or make any other
changes in the provisions of the Indenture which the Company and the Trustee may
deem necessary or desirable, provided that such amendment does not materially
and adversely affect the rights of the Holders under the Indenture; (b) evidence
the succession of another person to the Company and provide for the assumption
by such successor of the covenants and obligations of the Company under the
Indenture and the Notes; (c) provide for the conversion rights of Holders in the
event of
A-6
consolidation or merger or sale of all or substantially all of the assets of the
Company; (d) in the case of certain corporate transactions, modify the
provisions of the Indenture relating to the rights of Holders to repurchase
Notes following a Fundamental Change; (e) reduce the Conversion Price; (f)
evidence and provide for the acceptance of appointment under the Indenture of a
successor Trustee; (g) make any changes that would provide the Holders with any
additional rights or benefits or that do not adversely affect the legal rights
under the Indenture of any Holder; (h) comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the TIA; or (i) modify the restrictions on, and procedures for, resale and
other transfers of the Notes or the shares of Common Stock issuable upon
conversion of the Notes pursuant to law, regulation or practice relating to the
resale or transfer of restricted securities generally.
Without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Notes held by a non-consenting Holder): (a) reduce the
principal amount of Notes whose Holders must consent to an amendment, supplement
or waiver; (b) reduce the principal of or change the fixed maturity of any Note
or, except as permitted pursuant to Section 9.01 of the Indenture, alter the
redemption or repurchase provisions with respect to the Notes; (c) reduce the
rate of, or change the time for payment of, interest, including defaulted
interest, and Additional Amounts, if any, and any Redemption Price, Purchase
Price or Fundamental Change Repurchase Price, if applicable, on any Note; (d)
waive a Default or Event of Default in the payment of principal or interest or
Additional Amounts, if any, on the Notes (except a rescission of acceleration of
the Notes by the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding and a waiver of the payment default that resulted
from such acceleration); (e) make the principal or interest or Additional
Amounts, if any, on any Note payable in money other than as provided for in the
Indenture and in the Notes; (f) make any change in the provisions of the
Indenture relating to waivers of past Defaults or Events of Default or the
rights of Holders to receive payments of principal of or interest or Additional
Amounts, if any, and any Redemption Price, Purchase Price or Fundamental Change
Repurchase Price, if applicable, on the Notes; (g) waive a Fundamental Change
Repurchase Price with respect to any Note; (h) increase the Conversion Price or,
except as permitted by the Indenture (including Section 9.01), modify the
provisions of the Indenture relating to conversion of the Notes in a manner
adverse to the Holders thereof; or (i) impair the right to institute suit for
the enforcement of any payment with respect to, or conversion of, the Notes or
the provisions of clauses (a) through (i) of Section 9.02 of the Indenture.
8. Redemption and Purchase. The Company, at its option, may redeem all or
a portion of the Notes on or after August 1, 2010 at a redemption price in cash
("Redemption Price") equal to 100% of the principal amount thereof, plus any
accrued and unpaid interest and Additional Amounts, if any, to, but excluding,
the Redemption Date. At least 30 days but not more than 60 days before a
Redemption Date, the Company shall mail a notice of redemption by first-class
mail, postage prepaid, to each Holder of Notes to be redeemed.
Subject to the terms and conditions of the Indenture, Notes shall be
purchased by the Company at the option of the Holder thereof, in whole or in
part, at a purchase price (the "Purchase Price") equal to 100% of the principal
amount thereof, plus any accrued and unpaid interest and Additional Amounts, if
any, to, but excluding, the relevant Purchase Date of August 1, 2008, August 1,
2010, August 1, 2013 and August 1, 2018, as applicable, upon
A-7
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 at least
20 business days prior to the relevant Purchase Date until the close of business
on the third business day prior to such Purchase Date. The Company may choose to
pay the Purchase Price in cash or shares of Common Stock or any combination of
cash and Common Stock, as provided in the Indenture.
Following a Fundamental Change, the Company shall make a Fundamental
Change Offer to repurchase all Notes then outstanding at a Fundamental Change
Repurchase Price equal to (i) beginning on August 6, 2003 and ending on July 31,
2008, 105% of the principal amount thereof, plus accrued and unpaid interest and
Additional Amounts, if any, to, but excluding, the Fundamental Change Repurchase
Date or (ii) on August 1, 2008 and thereafter, 100% of the principal amount
thereof, plus accrued and unpaid interest and Additional Amounts, if any, to,
but excluding, the Fundamental Change Repurchase Date, in each case in
accordance with the terms and conditions set forth in the Indenture. The Company
may choose to pay the Fundamental Change Repurchase Price in cash or shares of
Common Stock or any combination of cash and shares of Common Stock, as provided
in the Indenture. If the Company elects to pay all or a portion of the
Fundamental Change Repurchase Price in shares of Common Stock, the shares of the
Common Stock will be valued at 98% of the Market Price of the Common Stock. To
accept the Fundamental Change Offer, the Holder hereof must comply with the
terms thereof, including surrendering this Note with the "Fundamental Change
Repurchase Notice" portion thereof completed to the Trustee, with a copy to the
Paying Agent, at any time on or prior to the Fundamental Change Offer
Termination Date, as provided in the Indenture.
9. Conversion. Subject to the provisions of this paragraph 9 and the
Company's right to deliver cash or a combination of cash and Common Stock in
lieu of delivering Common Stock upon a conversion, and subject to and upon
compliance with the provisions of the Indenture, the principal amount of the
Note, or any portion of such principal amount which is $1,000 or an integral
multiple thereof, may be converted, prior to the close of business on the
maturity date of the Notes, subject to the conditions and during the periods
described below, into that number of fully paid and non-assessable shares of
Common Stock obtained by dividing the principal amount of the Note or portion
thereof to be converted by the conversion price of $21.28 per share, as adjusted
from time to time as provided in the Indenture (the "Conversion Price"), upon
surrender of the Note to the Company at the office or agency maintained for such
purpose (or at such other offices or agencies designated for such purpose by the
Company), accompanied by written notice of conversion duly executed (and if the
shares of Common Stock to be issued on conversion are to be issued in any name
other than that of the registered Holder of this Note, by instruments of
transfer, in form satisfactory to the Company, duly executed by the registered
Holder or its duly authorized attorney).
In case such surrender shall be made during the period from the close of
business on any Regular Record Date immediately preceding any Interest Payment
Date to the opening of business on such Interest Payment Date, the Note also
shall be accompanied by payment, in funds acceptable to the Company, of an
amount equal to the accrued and unpaid interest, if any, otherwise payable on
such Interest Payment Date on the principal amount of the Note then being
converted; provided, however, that no such payment need be made if (i) there
exists at the time of conversion a default in the payment of principal of or
interest or Additional Amounts, if applicable, on the Notes (including any
principal of or interest payable in connection with a
A-8
repurchase pursuant to Section 4.08 or Section 4.09 and a redemption pursuant to
Section 4.01); or (ii) the Company shall have specified a Redemption Date that
is after the Regular Record Date and prior to such Interest Payment Date.
Subject to the aforesaid requirement for a payment in the event of conversion
during the period from the close of business on any Regular Record Date
immediately preceding any Interest Payment Date to the opening of business on
such Interest Payment Date, no adjustment shall be made on conversion for
interest, if any, accrued and unpaid hereon or for dividends on Common Stock
delivered on conversion.
The Conversion Price will be adjusted for dividends or distributions on
Common Stock payable in Common Stock; subdivisions or combinations of Common
Stock; distributions to all holders of Common Stock of certain rights or
warrants to purchase Common Stock, for a period expiring within 60 days after
the date of such distribution, at a price less than the Current Market Price;
distributions to all holders of Common Stock of shares of Capital Stock (other
than Common Stock), cash or evidences of the Company's indebtedness or assets;
purchases of the Common Stock pursuant to tender offers by the Company or any
Subsidiary of the Company; and certain reclassifications, consolidations,
mergers, share exchanges, combinations and sales, conveyances or other
dispositions of all or substantially all of the property and assets of the
Company, in each case, in accordance with the terms and conditions set forth in
the Indenture. Additionally, the Indenture permits the Company to, from time to
time, to the extent permitted by law, reduce the Conversion Price by any amount
for any period of at least 20 days, if the Board of Directors has made a
determination that such reduction would be in the Company's best interests,
which determination shall be conclusive and described in a resolution of the
Board of Directors.
The Company shall not issue fractional shares or scrips representing
fractions of shares of Common Stock upon any such conversion, but shall make an
adjustment therefor in cash based upon the Current Market Price of the Common
Stock for the five consecutive trading days immediately preceding the Conversion
Date. If more than one Note shall be surrendered for conversion at one time by
the same Holder, the number of full shares which shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Notes (or specified portions thereof to the extent permitted hereby) so
surrendered for conversion.
A Note in respect of which a Holder has delivered a Purchase Notice or
Fundamental Change Repurchase Notice exercising the option of such Holder to
require the Company to purchase such Note may be converted only if such notice
of exercise is withdrawn in accordance with the terms of the Indenture.
Conversion Upon Satisfaction of Sale Price Condition. Subject to the
provisions of this paragraph 9, and subject to and upon compliance with the
provisions of the Indenture, and notwithstanding the fact that any other
condition to conversion has not been satisfied, the Holder of this Note has the
right to convert this Note into shares of Common Stock in any calendar quarter
after the quarter ending September 30, 2003 if the last reported sale price of
the Common Stock for at least 20 trading days during the period of 30
consecutive trading days ending on the last trading day of the immediately
preceding calendar quarter is greater than or equal to 130% of the Conversion
Price on such last trading day.
A-9
The "last reported sale price" of the Common Stock on any date means the
last reported sale price for such Common Stock, as set forth in Section 11.05(g)
of the Indenture.
Conversion Based on Trading Price of the Notes. Subject to the provisions
of this paragraph 9, and subject to and upon compliance with the provisions of
the Indenture, and notwithstanding the fact that any other condition to
conversion has not been satisfied, the Holder of this Note has the right to
convert this Note into shares of Common Stock during the five business day
period following any 10 consecutive trading days in which the average of the
trading prices for the Notes for that 10 trading days was less than 98% of the
average of the last reported sale prices (as defined in Section 11.05(g) of the
Indenture) of the Common Stock during such period multiplied by the Conversion
Rate. The "Conversion Rate" shall be equal to the number of shares of Common
Stock issuable upon conversion of a Note per $1,000 of principal amount thereof
(i.e., $1,000 principal amount of the Note being converted divided by the
applicable Conversion Price).
The "trading price" of the Notes on any date of determination means the
average of the secondary market bid quotations per $1,000 principal amount of
Notes obtained by the Trustee for $10,000,000 principal amount of the Notes at
approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers selected by the
Company; provided that if at least three such bids cannot be obtained, but two
such bids are obtained by the Trustee, then the average of the two bids shall be
used. If the Trustee cannot reasonably obtain at least two bids for $10,000,000
principal amount of the Notes from a nationally recognized securities dealer or,
in the reasonable judgment of the Company, the bid quotations are not indicative
of the secondary market value of the Notes, then the trading price of the Notes
will be deemed to be equal to 97.9% of (a) the Conversion Rate of the Notes as
of the applicable date of determination multiplied by (b) the last reported sale
price (as set forth in Section 11.05 of the Indenture) of the Common Stock on
such determination date.
The Trustee will determine the trading price of the Notes during the
applicable period at the request of the Company. The Company shall make such
request upon receipt of reasonable evidence from the Holder that the condition
to conversion based upon the trading price of the Notes has been or may be
satisfied.
Conversion Upon Credit Rating Event. Subject to the provisions of this
paragraph 9, and subject to and upon compliance with the provisions of the
Indenture, and notwithstanding the fact that any other condition to conversion
has not been satisfied, the Holder of this Note has the right to convert this
Note into shares of Common Stock at any time during any period that the Notes
are rated by either Standard & Poor's Rating Group and Moody's Investor
Services, Inc. and the credit rating initially assigned to the Notes by either
such rating agency is reduced by two or more ratings levels, if the credit
rating assigned to the Notes is suspended or withdrawn by both such rating
agencies or if the Notes are no longer rated by at least one of such rating
agencies..
Conversion Upon Notice of Redemption. Subject to the provisions of this
paragraph 9, and subject to and upon compliance with the provisions of the
Indenture, and notwithstanding the fact that any other condition to conversion
has not been satisfied, the Holder of this Note has the right to convert into
shares of Common Stock this Note or a portion hereof that has been
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called for redemption pursuant to Article 4 of the Indenture; provided that such
Note or portion hereof is surrendered for conversion on or prior to the close of
business on the second business day immediately preceding the Redemption Date in
accordance with the terms of the Indenture.
Conversion Upon Specified Corporate Transactions. Subject to the
provisions of this paragraph 9, and subject to and upon compliance with the
provisions of the Indenture, and notwithstanding the fact that any other
condition to conversion has not been satisfied, the Holder of this Note has the
right to convert this Note into shares of Common Stock in the event that the
Company (i) issues rights or warrants to all holders of its outstanding shares
of Common Stock entitling them to subscribe for or purchase, for a period
expiring within 60 days after the date of issuance, shares of Common Stock at a
price per share less than the last reported sale price (as defined in Section
11.05(g) of the Indenture) per share of Common Stock on the trading day (as
defined in Section 11.05(g) of the Indenture) immediately preceding the date of
the issuance; or (ii) distributes to all holders of its outstanding shares of
Common Stock any assets or debt securities of the Company, or rights to purchase
any securities of the Company, which distribution has a per share value, as
determined by the Board of Directors (whose determination shall be conclusive
and described in a resolution of the Board of Directors), that exceeds 15% of
the last reported sale price (as defined in Section 11.05(g) of the Indenture)
per share of Common Stock on the trading day (as defined in Section 11.05(g) of
the Indenture) immediately preceding the date of declaration of such
distribution. The Company will be required to give notice to the Holders at
least 20 business days prior to the "ex" date (as defined in Section 11.05(g) of
the Indenture) for such distribution, and Notes may be surrendered for
conversion at any time thereafter until the earlier of the close of business on
the business day immediately prior to the "ex" date and the announcement by the
Company that such distribution will not take place, even if the Notes are not
otherwise convertible at such time.
Subject to the provisions of this paragraph 9, and subject to and upon
compliance with the provisions of the Indenture, and notwithstanding the fact
that any other condition to conversion has not been satisfied, the Holder of
this Note has the right to convert this Note into shares of Common Stock in the
event the Company is a party to any consolidation, merger, share exchange or
combination or a sale, conveyance or other disposition of all or substantially
all of the property and assets of the Company pursuant to which the Common Stock
would be converted into cash, securities or other property as set forth in
Section 11.06 of the Indenture, the Notes may be surrendered for conversion at
any time from and after the date which is 15 days prior to the anticipated
effective date of the transaction until 15 days after the actual effective date
of such transaction and, at the effective time of such transaction, the right to
convert a Note into Common Stock will be deemed to have changed into a right to
convert such Note 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 Notes immediately prior to the applicable record date
for such transaction.
Notification of Right to Convert. The Company shall notify the Holders
upon determination that Holders are or will be entitled to convert their Notes,
or any portion of such principal amount which is $1,000 or an integral multiple
thereof, into fully paid and non-assessable shares of Common Stock in accordance
with this paragraph 9, by issuing a press release and publishing such
determination on the Company's web site.
A-11
10. Subordination. The indebtedness evidenced by this Note is, to the
extent and in the manner provided in the Indenture, subordinate and junior in
right of payment to the prior payment in full in cash of all Senior
Indebtedness. Any Holder by accepting this Note agrees to and shall be bound by
such subordination provisions, authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose. In addition to all
other rights of Senior Indebtedness described in the Indenture, the Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any terms of any instrument relating to the Senior
Indebtedness or any extension or renewal of the Senior Indebtedness. Such
subordination is intended for the benefit of, and may be enforced by, each
holder of Senior Indebtedness.
11. Defaults and Remedies. An Event of Default is: (a) a default in
payment of the principal on the Notes when due upon redemption, repurchase or
otherwise; (b) a default for 30 days in the payment of any installment of
interest or Additional Amounts on the Notes when due (including any interest
payable in connection with a repurchase or redemption of the Notes pursuant to
the terms of the Indenture); (c) a default for 10 days in the Company's
obligation to satisfy its conversion obligations upon a Holder's exercise of its
conversion rights; (d) a failure to comply with or observe in any material
respect any covenant or agreement of the Company in respect of the Notes as set
forth in the Indenture for 60 days after written notice to the Company from the
Trustee or to the Company and the Trustee from Holders of at least 25% in
aggregate principal amount of the then outstanding Notes; (e) a default under
any credit agreement, mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by the Company or any Material Subsidiary (other than any such
Indebtedness which is non-recourse to the Company or such Subsidiary), which
default is caused by a failure to pay when due any principal on such
Indebtedness at the final stated maturity date of such Indebtedness, which
failure continues beyond any applicable grace period, or results in the
acceleration of such indebtedness prior to its express maturity, without such
acceleration being rescinded or annulled, and, in each case, the principal
amount of such Indebtedness, together with the principal amount of any other
such Indebtedness under which there is a payment default at the final stated
maturity thereof or the maturity of which has been so accelerated, aggregates to
$25 million or more and such payment default is not cured or such acceleration
is not annulled within 30 days after written notice to the Company by the
Trustee or to the Company and the Trustee by Holders of not less than 25% in
aggregate principal amount of the Notes then outstanding; and (f) certain events
involving bankruptcy, insolvency or reorganization of the Company or its
Material Subsidiaries.
If an Event of Default occurs and is continuing, the Trustee, by written
notice to the Company, or the Holders of at least 25% in principal amount of the
then outstanding Notes, by written notice to the Company and the Trustee, may
declare the unpaid principal of, and accrued and unpaid interest and Additional
Amounts, if any, on all Notes then outstanding to be due and payable
immediately, except that in the case of an Event of Default arising from certain
events of bankruptcy, insolvency, or reorganization with respect to the Company,
all outstanding Notes become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require an indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations,
A-12
Holders of at least a majority in principal amount of the then outstanding Notes
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders notice of any continuing default (except a default in
payment of principal of, or interest or Additional Amounts, if any, and the
Redemption Price, Purchase Price or Fundamental Change Repurchase Price, if
applicable) if it determines that withholding notice is in their interests. The
Company must furnish annual compliance certificates to the Trustee in accordance
with the terms of the Indenture.
12. Trustee Dealings With the Company. Subject to Section 7.10 of the
Indenture, the Trustee or any of its Affiliates, in their individual or any
other capacities, may make or continue loans to or guaranteed by, accept
deposits from and perform services for the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates as if it were not Trustee.
13. No Recourse Against Others. No director, officer, employee,
stockholder or Affiliate, as such, of the Company shall have any liability for
any obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability with respect
to each director, officer, employee, stockholder and Affiliate of the Company.
The waiver and release are part of the consideration for the Notes.
14. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
15. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN CO = 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 Gifts to Minors Act.
16. Registration Rights Agreement. The Holder of this Note is entitled to
the benefits of a Registration Rights Agreement, dated August 6, 2003, between
the Company and the Initial Purchasers (the "Registration Rights Agreement").
In accordance with the terms of the Registration Rights Agreement, during
any period in which a Registration Default (as defined in the Registration
Rights Agreement) has occurred and is continuing, the Company will pay
Additional Amounts in an amount equal to (1) .25% (or 25 basis points) per annum
per $1,000 principal amount of Notes or $2.50 per annum per 46.9925 shares of
Common Stock (subject to adjustment from time to time in the event of a stock
split, stock recombination, stock dividend and similar events) constituting
Transfer Restricted Securities (as defined in the Registration Rights
Agreement), for the period up to and including the 90th day during which a
Registration Default has occurred and is continuing and (2) .50% (or 50 basis
points) per annum per $1,000 principal amount of Notes, or $5.00 per annum per
46.9925 shares of our common stock (subject to adjustment in the event of a
stock split, stock recombination, stock dividend and similar events)
constituting Transfer Restricted Securities for the period including and
subsequent to the 91st day during which such Registration Default has occurred
and is continuing.
A-13
Additional Amounts in respect of the Notes, if any, will be payable in
cash semiannually, in arrears, on each Interest Payment Date to the person in
whose name each Note is registered at the close of business on the Regular
Record Date immediately preceding the relevant Interest Payment Date, and will
cease to accrue on the date the Registration Default is cured. The above
description of certain provisions of the Registration Rights Agreement is
qualified by reference to, and is subject in its entirety to, the more complete
description thereof contained in the Registration Rights Agreement.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and the Registration Rights Agreement.
Requests may be made to: Vishay Intertechnology, Inc., 63 Lincoln Highway,
Malvern, Pennsylvania 19355, Attention: Secretary, Telephone No.: (610)
644-1300.
17. Sinking Fund. The Notes do not have the benefit of any sinking fund
obligations.
A-14
FORM OF CONVERSION NOTICE
To: VISHAY INTERTECHNOLOGY, INC.
The undersigned beneficial owner of this Note hereby irrevocably exercises
the option to convert this Note, or portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of
Vishay Intertechnology, Inc. in accordance with the terms of the Indenture
referred to in this Note, and directs that the shares issuable and deliverable
upon the conversion, together with any check in payment for fractional shares
and Notes representing any unconverted principal amount hereof, be issued and
delivered to the beneficial owner hereof unless a different name has been
indicated below. If shares or any portion of this Note not converted are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto. Any amount required to be
paid by the undersigned on account of interest and taxes accompanies this Note.
Dated: ------------------------------------
Fill in for registration of shares if ------------------------------------
to be delivered, and Notes if to be
issued, other than to and in the name ------------------------------------
of the beneficial owner (Please Print): Signature(s)
_____________________________________ Principal amount to be converted
(Name) (if less than all):
_____________________________________ $____________,000
(Street Address)
____________________________________ Social Security or other Taxpayer
(City, State and Zip Code) Identification Number
Signature Guarantee:*
- --------------------------------------
* Signatures must be guaranteed by an eligible Guarantor Institution (banks,
brokers, dealers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares are to be issued,
or Notes are to be delivered, other than to and in the name of the registered
Holder(s).
A-15
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
- ------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________________ as agent to
transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Your Signature:
- -----------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Date: ________________________________
Medallion Signature Guarantee:
---------------------------------------------
[FOR INCLUSION ONLY IF THIS NOTE BEARS A RESTRICTED SECURITIES LEGEND] In
connection with any transfer of any of the Notes evidenced by this certificate
that are "restricted securities" (as defined in Rule 144 (or any successor
thereto) under the Securities Act), the undersigned confirms that such Notes are
being transferred:
CHECK ONE BOX BELOW
(1) [_] to the Company; or
(2) [_] pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) [_] pursuant to an exemption from registration under the Securities
Act of 1933 provided by Rule 144 thereunder; or
(4) [_] pursuant to and in compliance with another available exemption
from the registration requirements of the Securities Act of
1933.
Unless one of the boxes is checked, the Registrar will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided, however, that if box (3) or (4) is checked,
the Trustee may require, prior to registering any such transfer of the Notes,
such certifications, legal opinions and other information as the
A-16
Company has reasonably requested in writing; provided that this paragraph shall
not be applicable to any Notes which are not "restricted securities" (as defined
in Rule 144 (or any successor thereto) under the Securities Act).
Your Signature:
---------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Date:
------------------
Medallion Signature Guarantee:
--------------------------------------------------
A-17
FORM OF PURCHASE NOTICE
----------------, ---
Wachovia Bank, National Association
123 South Broad Street
Philadelphia, Pennsylvania 19109
Attention: Corporate Trust Administration, PA1249
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, PA 19355
Re: Re: Purchase of $________ Principal Amount of
3 5/8% Convertible Subordinated Notes due 2023
(the "Securities") of Vishay Intertechnology, Inc. (the "Company")
Certificate No(s). of Securities:
-------------------
This is a Purchase Notice as defined in Section 4.08(a) of the Indenture
dated as of August 6, 2003 (the "Indenture") between the Company and Wachovia
Bank, National Association, as Trustee. Terms used but not defined herein shall
have the meanings ascribed to them in the Indenture.
I intend to deliver the following aggregate principal amount of Securities
for purchase by the Company pursuant to Section 4.08(a) of the Indenture (in
multiples of $1,000): $__________________.
I hereby agree that the Securities will be purchased as of the Purchase
Date pursuant to the terms and conditions thereof and of the Indenture.
A-18
[In the event that the Company elects, pursuant to the Indenture, to pay
the Purchase Price, in whole or in part, in shares of Common Stock but such
portion of the Purchase Price is ultimately payable entirely in cash because any
of the conditions to payment of the Purchase Price in shares of Common Stock is
not satisfied prior to the close of business on the Purchase Date, I elect
(check one):
[ ] (1) to withdraw this Purchase Notice as to all of the Securities to
which it relates;
[ ] (2) to withdraw this Purchase Notice as to $___________________
principal amount of Securities (Certificate No(s).
____________________); or
[ ] (3) to receive cash in respect of the entire Purchase Price for all
Securities or portions thereof to which this Purchase Notice
relates.]
Signed:
------------------------------------
Signature(s) must be guaranteed by a commercial
bank or trust company or a member firm of a
major stock exchange if Notes are to be
delivered, other than to or in the name of the
registered holder.
___________________________________________
Signature Guarantee
A-19
FUNDAMENTAL CHANGE REPURCHASE NOTICE
If you wish to have this Note repurchased by the Company pursuant to Section
4.09 of the Indenture, check the Box: [_]
If you wish to have a portion of this Note (Certificate No(s) _________)
repurchased by the Company pursuant to Section 4.09 of the Indenture, state the
amount (in multiples of $1,000): $____________, 000.
[In the event that the Company elects, pursuant to the Indenture, to pay
the Fundamental Change Repurchase Price, in whole or in part, in shares of
Common Stock but such portion of the Fundamental Change Repurchase Price is
ultimately payable entirely in cash because any of the conditions to payment of
the Fundamental Change Repurchase Price in shares of Common Stock is not
satisfied prior to the close of business on the Fundamental Change Repurchase
Date, I elect (check one):
[ ] (1) to withdraw this Fundamental Change Repurchase Notice as to all
of the Securities to which it relates;
[ ] (2) to withdraw this Fundamental Change Repurchase Notice as to
$___________________ principal amount of Securities (Certificate
No(s). ____________________); or
[ ] (3) to receive cash in respect of the entire Fundamental Change
Repurchase Price for all Securities or portions thereof to which
this Fundamental Change Repurchase Notice relates.]
Date: _________________
Your Signature:
---------------------------------
(Sign exactly as your name appears on the
other side of this Note)
Signature(s) must be guaranteed by a commercial bank or trust company or a
member firm of a major stock exchange if Notes are to be delivered, other than
to or in the name of the registered holder.
_______________________________________________
Signature Guarantee
A-20
EXHIBIT B
[FORM OF RESTRICTED COMMON STOCK LEGEND]
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF,
BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF VISHAY INTERTECHNOLOGY,
INC. THAT THIS SECURITY MAY NOT BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED PRIOR TO THE LATER OF (X) THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO THE SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(k) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION) OR (Y) THREE MONTHS AFTER SUCH
HOLDER CEASES TO BE AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE
SECURITIES ACT) OF VISHAY INTERTECHNOLOGY, INC., OTHER THAN (1) TO VISHAY
INTERTECHNOLOGY, INC., (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF AVAILABLE) UNDER THE SECURITIES ACT, (3)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS AND, IN THE CASE
OF ANY OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (2) OR (3), SUBJECT TO THE
RIGHTS OF THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO IT. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY
EXCEPT AS PERMITTED BY THE SECURITIES ACT."
B-1
EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
OF RESTRICTED COMMON STOCK
(Transfers pursuant to Section 11.11(b) of the Indenture)
American Stock Transfer & Trust Company
59 Maiden Lane
Plaza Level
New York, NY 10038
Re: Vishay Intertechnology, Inc. 3 5/8% Convertible Subordinated Notes
due 2023 (the "Convertible Subordinated Notes")
Reference is hereby made to the Indenture dated as of August 6, 2003 (the
"Indenture") between Vishay Intertechnology, Inc. and Wachovia Bank, National
Association, as Trustee. Capitalized terms used but not defined herein shall
have the meanings given them in the Indenture.
This letter relates to _________ shares of Common Stock [represented by
the accompanying certificate(s) that were] [to be] issued upon conversion of
Convertible Subordinated Notes and which are held in the name of [name of
transferor] (the "Transferor") to effect the transfer of such Common Stock.
In connection with the transfer of such shares of Common Stock, the
undersigned confirms that such shares of Common Stock are being transferred:
CHECK ONE BOX BELOW
(1) [_] to the Company; or
(2) [_] pursuant to an exemption from registration under the Securities
Act of 1933 provided by Rule 144 thereunder; or
(3) [_] pursuant to and in compliance with another available exemption
from the registration requirements of the Securities Act of 1933
.
C-1
Unless one of the boxes is checked, the transfer agent will refuse to
register any of the Common Stock [evidenced by this certificate] [to be issued
to] in the name of any person other than the registered Holder thereof;
provided, however, that if box (2) or (3) is checked, the transfer agent may
require, prior to registering any such transfer of the Common Stock such
certifications, legal opinions and other information as the Company has
reasonably requested in writing.
[Name of Transferor],
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Dated:
------------------
C-2
Exhibit 4.2
VISHAY INTERTECHNOLOGY, INC.
3 5/8 Convertible Subordinated Notes due 2023
REGISTRATION RIGHTS AGREEMENT
August 6, 2003
J.P. Morgan Securities Inc.
Banc of America Securities LLC
Wachovia Capital Markets, LLC
As Representatives of the Initial Purchasers
Named in Schedule I to the Purchase Agreement
c/o J.P. Morgan Securities Inc.
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Vishay Intertechnology, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell (such issuance and sale, the "Initial Placement") to
the Initial Purchasers (as defined below), upon the terms set forth in a
purchase agreement, dated July 31, 2003 (the "Purchase Agreement"), $450,000,000
aggregate principal amount, plus an option (the "Option") to purchase up to an
additional $50,000,000 aggregate principal amount, of its 3 5/8% Convertible
Subordinated Notes due 2023 (the "Securities"). The Securities will be
convertible into shares of Common Stock (as defined herein), at the conversion
price set forth in the Offering Memorandum (as defined herein), as the same may
be adjusted from time to time pursuant to the Indenture (as defined herein). As
an inducement to you to enter into the Purchase Agreement and in satisfaction of
a condition to your obligations thereunder, the Company agrees with you, (i) for
your benefit and (ii) for the benefit of the Holders (as defined herein) from
time to time of the Securities and the shares of Common Stock issuable upon
conversion of the Securities, as follows:
1. Definitions. Capitalized terms used herein without definition
shall have the respective meanings set forth in the Purchase Agreement. As used
in this Agreement, the following capitalized terms shall have the following
meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
"Additional Amounts" has the meaning set forth in Section 2(e) hereof.
"Additional Amounts Payment Date" means, with respect to the Securities,
each Interest Payment Date under the Indenture, and each February 1 and August 1
in the case of the shares of Common Stock issuable upon conversion of the
Securities.
"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" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such person
whether through the ownership of voting securities or by agreement or otherwise.
"Business Day" has the meaning set forth in the Indenture.
"Closing Date" means August 6, 2003.
"Common Stock" means the common stock, par value $0.10 per share, of the
Company, as it exists on the date of this Agreement and any other shares of
capital stock or other securities of the Company into which such Common Stock
may be reclassified or changed, together with any and all other securities which
may from time to time be issuable upon conversion of Securities.
"Company" has the meaning set forth in the preamble hereto.
"DTC" has the meaning set forth in the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Holder" means a person who is a holder or beneficial owner of any
Securities or shares of Common Stock issuable upon conversion of Securities;
provided that, unless otherwise expressly stated herein, only registered holders
of Securities or Common Stock issued on conversion thereof shall be counted for
purposes of calculating any proportion of holders entitled to take any action or
give notice pursuant to this Agreement.
"Holder Information" with respect to any Holder means information with
respect to such Holder required to be included in any Shelf Registration
Statement or the related Prospectus pursuant to the Act or included at the
request of such Holder pursuant to Section 3(p) and which information is
included therein in reliance upon and in conformity with information furnished
to the Company in writing by such Holder for inclusion therein. In the event
that a Holder shall participate with the Majority Holders in requiring the
inclusion of information pursuant to Section 3(p), such information shall be
deemed to be Holder Information of such Holder.
"Indemnified Person" has the meaning set forth in Section 5(c) hereof.
"Indemnifying Person" has the meaning set forth in Section 5(c) hereof.
2
"Indenture" means the Indenture relating to the Securities, dated August
6, 2003, between the Company and Wachovia Bank, National Association, as
trustee, as the same may be amended from time to time in accordance with the
terms thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
"Initial Purchasers" mean J.P. Morgan Securities Inc., Banc of America
Securities LLC, Wachovia Capital Markets, LLC and the other initial purchasers
named in and a party to the Purchase Agreement.
"Interest Payment Date" shall mean February 1 and August 1 of each year,
beginning February 1, 2004.
"Losses" has the meaning set forth in Section 5(d) hereof.
"Majority Holders" means the Holders of a majority of the then outstanding
aggregate principal amount of Securities being registered under a Shelf
Registration Statement; provided that Holders of the shares of Common Stock
issued upon conversion of Securities shall be deemed to be Holders of the
aggregate principal amount of Securities from which such Common Stock was
converted; and provided, further, that Securities or shares of Common Stock
which have been sold or otherwise transferred pursuant to the Shelf Registration
Statement or pursuant to Rule 144 shall not be included in the calculation of
Majority Holders.
"NASD" has the meaning set forth in Section 3(i) hereof.
"NASD Rules" means the rules and regulation promulgated by the NASD.
"Notice and Questionnaire" means a Selling Securityholder Notice and
Questionnaire substantially in the form of Annex A to the Offering Memorandum.
"Notice Holder" shall mean, on any date, any Holder of Transfer Restricted
Securities that has delivered a completed and signed Notice and Questionnaire to
the Company on or prior to such date.
"Offering Memorandum" means the Final Memorandum as defined in the
Purchase Agreement.
"Option" has the meaning set forth in the preamble hereto.
"Person" has the meaning set forth in the Indenture.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities or shares of Common Stock issuable
upon conversion thereof covered by such Shelf Registration Statement, and all
amendments and
3
supplements to such prospectus, including all documents incorporated or deemed
to be incorporated by reference in such prospectus.
"Purchase Agreement" has the meaning set forth in the preamble hereto.
"Record Date" means, with respect to any Additional Amounts Payment Date,
the January 15 or July 15 immediately preceding any such Additional Amounts
Payment Date.
"Record Holder" with respect to any Additional Amounts Payment Date means,
with respect to any Securities, each person who is registered on the books of
the registrar of the Securities as holder of Securities on the Record Date
immediately preceding such Additional Amounts Payment Date and, with respect to
any Common Stock issued on conversion of any Securities, each person who is
registered on the books of the transfer agent for the Common Stock as a holder
of such Common Stock on the Record Date immediately preceding such Additional
Amounts Payment Date.
"Registration Default" has the meaning set forth in Section 2(e) hereof.
"Rule 144" means Rule 144 under the Act (or any similar provision then in
force).
"Rule 144A" means Rule 144A under the Act (or any successor provision
promulgated by the SEC).
"Rule 144(k)" means Rule 144(k) under the Act (or any successor provision
promulgated by the SEC).
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning set forth in the preamble hereto.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Period" has the meaning set forth in Section 2(c)
hereof.
"Shelf Registration Statement" means any "shelf" registration statement of
the Company filed pursuant to the provisions of Section 2 hereof which covers
the Securities and the shares of Common Stock issuable upon conversion thereof,
as applicable, on Form S-3 or on another appropriate form for an offering to be
made on a delayed or continuous basis pursuant to Rule 415 under the Act, or any
similar rule that may be adopted by the SEC, and all amendments and supplements
to such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
documents incorporated or deemed to be incorporated by reference therein.
"Suspension Period" has the meaning set forth in Section 2(d) hereof.
"Transfer Restricted Securities" means each Security and each share of
Common Stock issuable upon conversion thereof (and any security issued with
respect thereto upon any stock dividend, split or similar event) until the
earliest of the date on which such Security or share of
4
Common Stock, or any security issued with respect thereto upon any stock
dividend, split or similar event, as the case may be, (i) has been transferred
pursuant to a Shelf Registration Statement or another registration statement
covering such Security or share of Common Stock which has been filed with the
SEC pursuant to the Act, in either case after such registration statement has
become effective and while such registration statement is effective under the
Act, (ii) has been transferred pursuant to Rule 144 (or any similar provision
then in force) or (iii) may be sold or transferred pursuant to Rule 144(k) (or
any successor provision promulgated by the SEC).
"Trustee" means the trustee with respect to the Securities under the
Indenture.
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included," or "stated" in the Shelf
Registration Statement, any preliminary Prospectus or Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in such Shelf Registration Statement,
preliminary Prospectus or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Shelf Registration Statement,
any preliminary Prospectus or Prospectus shall be deemed to mean and include any
document filed with the SEC under the Exchange Act, after the date of such Shelf
Registration Statement, preliminary Prospectus or Prospectus, as the case may
be, which is incorporated or deemed to be incorporated by reference therein.
2. Shelf Registration Statement.
(a) The Company shall, at its expense, prepare and file with the SEC
within 90 days following the Closing Date a Shelf Registration Statement with
respect to resales of the Transfer Restricted Securities by the Holders from
time to time in accordance with the methods of distribution elected by such
Holders and set forth in such Shelf Registration Statement (it being understood,
however, that no distribution may take the form of an underwritten offering
without the prior agreement of the Company in its sole discretion) and
thereafter shall use its reasonable best efforts to cause such Shelf
Registration Statement to be declared effective under the Act within 180 days
after the Closing Date; provided that if any Securities are issued upon exercise
of the Option granted to the Initial Purchasers in the Purchase Agreement and
the date on which such Securities are issued occurs after the Closing Date, the
Company will take such steps, prior to the effective date of the Shelf
Registration Statement, to ensure that such Securities issued upon an exercise
of the Option and the shares of Common Stock issuable upon conversion thereof
are included in the Shelf Registration Statement on the same terms as the
Securities issued on the Closing Date. The Company shall supplement or amend the
Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for the
Shelf Registration Statement, or by the Act, the Exchange Act or the SEC.
(b) (1) The Company shall give notice to all Holders of Transfer
Restricted Securities not less than 30 calendar days prior to the date on which
the Company intends in good faith to have the Shelf Registration Statement
declared effective, by issuing a press release to Reuters Economic Services and
Bloomberg Business News or similar financial news service.
5
The Company shall take action to name each Holder that is a Notice Holder as of
the date that is 20 calendar days prior to the effectiveness of the Shelf
Registration Statement so that such Holder is named as a selling securityholder
in the Shelf Registration Statement at the time of its effectiveness and is
permitted to deliver the Prospectus forming a part thereof as of such time to
purchasers of such Holder's Transfer Restricted Securities in accordance with
applicable law. The Company shall be under no obligation to name any Holder that
is not a Notice Holder as a selling security holder in the Shelf Registration
Statement.
(2) After the Shelf Registration Statement has become effective, the
Company shall, upon the request of any Holder of Transfer Restricted Securities,
promptly send a Notice and Questionnaire to such Holder and the Company shall
(i) as promptly as is practicable after the date a completed and signed Notice
and Questionnaire is delivered to the Company, and in any event within 10
Business Days after such date, prepare and file with the SEC (x) a supplement to
the Prospectus or, if required by applicable law, a post-effective amendment to
the Shelf Registration Statement and (y) any other document required by
applicable law, so that the Holder delivering such Notice and Questionnaire is
named as a selling securityholder in the Shelf Registration Statement and is
permitted to deliver the Prospectus to purchasers of such Holder's Transfer
Restricted Securities in accordance with applicable law. If the Company files a
post-effective amendment to the Shelf Registration Statement, it shall use its
reasonable best efforts to cause such post-effective amendment to become
effective under the Act as promptly as is practicable; provided, however, that
if a Notice and Questionnaire is delivered to the Company during a Suspension
Period, the Company shall not be obligated to take the actions set forth above
until the termination of such Suspension Period.
(c) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective under the Act in order to
permit the Prospectus forming a part thereof to be usable, subject to Section
2(d), by all Notice Holders until the earliest of (i) the last date on which the
holding period applicable to sales of the Securities and the shares of Common
Stock issuable upon conversion of the Securities under Rule 144(k) has expired,
(ii) the date as of which all the Securities and the shares of Common Stock
issuable upon conversion of the Securities have been transferred under Rule 144,
and (iii) such date as of which all the Securities and the shares of Common
Stock issuable upon conversion thereof have been sold pursuant to the Shelf
Registration Statement (in any such case, such period being called the "Shelf
Registration Period"). The Company will, (x) subject to Section 2(d), prepare
and file with the SEC such amendments and post-effective amendments to the Shelf
Registration Statement as may be necessary to keep the Shelf Registration
Statement continuously effective for the Shelf Registration Period, (y) subject
to Section 2(d), cause the related Prospectus to be supplemented by any required
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the Act and (z) comply in all material
respects with the provisions of the Act with respect to the disposition of all
Securities and the shares of Common Stock issuable upon conversion of the
Securities covered by the Shelf Registration Statement during the Shelf
Registration Period in accordance with the intended methods of disposition by
the Holders thereof set forth in such Shelf Registration Statement and the
related Prospectus, as amended and supplemented.
(d) The Company may suspend the availability of any Shelf
Registration Statement and the use of any Prospectus (the period during which
the availability of any Shelf
6
Registration Statement and any Prospectus may be suspended herein referred to as
the "Suspension Period"), without incurring any obligation to pay Additional
Amounts pursuant to Section 2(e), for a period not to exceed either 45 days in
the aggregate in any three-month period or 120 days in the aggregate during any
12-month period during the period beginning on the effective date of the initial
Shelf Registration Statement and ending on or prior to the expiration of the
holding period applicable to sales of the Securities and shares of Common Stock
issuable upon conversion of the Securities under Rule 144(k), for valid business
reasons, to be determined by the Company in its sole judgment (which shall not
include the avoidance of the Company's obligations hereunder), including,
without limitation, the acquisition or divestiture of assets, pending corporate
developments, public filings with the SEC and similar events; provided that the
Company promptly thereafter complies with the requirements of Section 3(j)
hereof, if applicable.
(e) The Company and the Initial Purchasers agree that the Holders of
Transferred Restricted Securities will suffer damages, and it would not be
feasible to ascertain the extent of such damages with precision, if the Company
fails to fulfill its obligations under Section 2 hereof. Accordingly, if (i) the
Shelf Registration Statement is not filed with the SEC on or within 90 days
after the Closing Date, (ii) the Shelf Registration Statement has not been
declared effective by the SEC within 180 days after the Closing Date, or (iii)
the Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by a
replacement Shelf Registration Statement filed and declared effective) or usable
(including as a result of a Suspension Period) for the offer and sale of
Transfer Restricted Securities for a period of time (including any Suspension
Period) which exceeds either 45 days in the aggregate in any three-month period
or 120 days in the aggregate in any 12-month period during the period beginning
on the effective date of the initial Shelf Registration Statement and ending on
or prior to the expiration of the holding period applicable to sales of the
Securities and shares of Common Stock issuable upon conversion of the Securities
under Rule 144(k) (each such event referred to in clauses (i) through (iii), a
"Registration Default"), the Company will pay Additional Amounts ("Additional
Amounts") on each Additional Amounts Payment Date to each Notice Holder who is
also a Record Holder with respect to such Additional Amounts Payment Date. The
amount of Additional Amounts payable during any period in which a Registration
Default has occurred or is continuing is the amount which is equal to (i)
one-quarter of one percent (25 basis points) per annum per $1,000 principal
amount of Securities or $2.50 per annum per 46.9925 shares of Common Stock
(subject to adjustment in the event of a stock split, stock recombination, stock
dividend and the like) constituting Transfer Restricted Securities for the
period up to and including the 90th day during which such Registration Default
has occurred and is continuing and (ii) one-half of one percent (50 basis
points) per annum per $1,000 principal amount of Securities or $5.00 per annum
per 46.9925 shares of Common Stock (subject to adjustment in the event of a
stock split, stock recombination, stock dividend and the like) constituting
Transfer Restricted Securities for the period including and subsequent to the
91st day during which such Registration Default has occurred and is continuing,
it being understood that all calculations pursuant to this and the preceding
sentence shall be carried out to five decimal places. Following the cure of all
Registration Defaults, Additional Amounts will cease to accrue with respect to
such Registration Defaults. All accrued Additional Amounts shall be paid by the
Company in cash to the date of such cure and Additional Amounts will be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
The parties hereto agree that the Additional Amounts provided for in this
7
Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders by reason of a Registration Default.
(f) All of the Company's obligations (including, without limitation,
the obligation to pay Additional Amounts) set forth in the preceding paragraph
which are outstanding or exist with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to such security
shall have been satisfied in full.
(g) Immediately upon the occurrence or the termination of a
Registration Default, the Company shall give (i) the Trustee, so long as the
Securities remain outstanding, and (ii) the transfer agent for the Common Stock,
in the case of notice with respect to the shares of Common Stock issuable upon
conversion of Securities, notice of such occurrence or termination of the
obligation to pay Additional Amounts with regard to the Securities or the Common
Stock, as the case may be, and the amount thereof and of the event giving rise
to such commencement or termination (such notice to be contained in an Officer's
Certificate (as such term is defined in the Indenture)), and prior to receipt of
such Officer's Certificate the Trustee and the transfer and paying agent shall
be entitled to assume that no such occurrence or termination has occurred, as
the case may be.
3. Registration Procedures. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to the Initial Purchasers, within
a reasonable period of time prior to the filing thereof with the SEC to afford
the Initial Purchasers and their counsel a reasonable opportunity for review, a
copy of each Shelf Registration Statement, and each amendment thereof, and a
copy of each Prospectus, and each amendment or supplement thereto (excluding
amendments caused by the filing of a report under the Exchange Act), and shall
reflect in each such document, when so filed with the SEC, such comments as the
Initial Purchasers may reasonably propose, except to the extent the Company
reasonably determines it to be inadvisable or inappropriate to reflect such
comments therein, and (ii) include information regarding the Notice Holders and
the methods of distribution they have elected for their Transfer Restricted
Securities provided to the Company in Notice and Questionnaires as necessary to
permit such distribution by the methods specified therein.
(b) Subject to Section 2(d), the Company shall ensure that (i) any
Shelf Registration Statement and any amendment thereto and any Prospectus
forming a part thereof and any amendment or supplement thereto comply in all
material respects with the Act and the rules and regulations thereunder, (ii)
any Shelf Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) any Prospectus forming a part of any
Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation with respect to any Holder Information.
8
(c) The Company, as promptly as reasonably practicable (but in any
event within two Business Days), shall notify the Initial Purchasers and, to the
extent provided below, each Notice Holder and, if requested by you or any such
Holder, confirm such notice in writing:
(i) when a Shelf Registration Statement and any amendment thereto or
any Prospectus and any amendments and supplements thereto has been filed
with the SEC;
(ii) when the Shelf Registration Statement or any post-effective
amendment thereto has become effective;
(iii) of any request by the SEC following effectiveness of the Shelf
Registration Statement for amendments or supplements to the Shelf
Registration Statement or the Prospectus or for additional information
(other than any such request relating to a review of the Company's
Exchange Act filings);
(iv) of the issuance by the SEC of any stop order suspending the
effectiveness of the Shelf Registration Statement or of any order
preventing or suspending the use of any Prospectus or the initiation or
threat of any proceedings for that purpose;
(v) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Transfer Restricted
Securities included in any Shelf Registration Statement for sale in any
jurisdiction or the initiation or threat of any proceeding for that
purpose;
(vi) of the happening of any event or the existence of any condition
or any information becoming known that requires the making of any
changes in the Shelf Registration Statement or the Prospectus or any
document incorporated by reference therein so that, as of such date, the
statements therein are not misleading and the Shelf Registration
Statement or the Prospectus or any document incorporated by reference
therein, as the case may be, does not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made)
not misleading, it being understood that the Company shall not be
required to disclose the details of any such event or condition;
(vii) of the Company's determination that a post-effective amendment
to the Shelf Registration Statement is necessary; and
(viii) of the commencement (including as a result of any of the
events or circumstances described in paragraphs (iii) through (vii)
above) and termination of any Suspension Period.
Notification of Notice Holders shall be required with respect to the
matters set forth in clauses (ii) (provided that, in the case of any
post-effective amendment, only to the extent (x) such post-effective amendment
has been filed so that the Shelf Registration Statement will not include an
untrue statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
(y) such Notice Holder is named in such post-effective amendment), (iv), (v),
(vi), and (viii).
9
(d) The Company shall use its reasonable best efforts to obtain (i)
the withdrawal of any order suspending the effectiveness of any Shelf
Registration Statement and the use of any related Prospectus and (ii) the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Transfer Restricted Securities for offer or sale in any
jurisdiction in which they have been qualified for sale, in each case at the
earliest possible time, and shall provide notice to each Holder of the
withdrawal of any such orders or suspensions.
(e) The Company shall promptly upon request furnish to each Notice
Holder, without charge, at least one copy of any Shelf Registration Statement
and any post-effective amendment thereto, excluding all documents incorporated
or deemed to be incorporated therein by reference and all exhibits thereto
(unless specifically requested to the Company by such Notice Holder).
(f) The Company shall, during the Shelf Registration Period,
promptly deliver to the Initial Purchasers, each Notice Holder and any sales or
placement agent or underwriters acting on their behalf, without charge, as many
copies of the Prospectus (including each preliminary Prospectus) included in any
Shelf Registration Statement, and any amendment or supplement thereto, as such
person may reasonably request; and, except as provided in Sections 2(d) and 3(s)
hereof, the Company consents to the use of the Prospectus or any amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto.
(g) Prior to any offering of Transfer Restricted Securities pursuant
to any Shelf Registration Statement, the Company shall register or qualify or
cooperate with the Notice Holders and their respective counsel in connection
with the registration or qualification (or exemption from such registration or
qualification) of such Transfer Restricted Securities for offer and sale, under
the securities or blue sky laws of such jurisdictions within the United States
as any such Notice Holders reasonably request and shall maintain such
qualification in effect so long as required and do any and all other acts or
things necessary or advisable to enable the offer and sale in such jurisdictions
of the Transfer Restricted Securities covered by such Shelf Registration
Statement; provided, however, that the Company will not be required to (A)
qualify generally to do business as a foreign corporation or as a dealer in
securities in any jurisdiction where it is not then so qualified or to (B) take
any action which would subject it to service of process or taxation in excess of
a nominal dollar amount in any such jurisdiction where it is not then so
subject.
(h) The Company shall cooperate with the Notice Holders to
facilitate the timely preparation and delivery of certificates representing
Transfer Restricted Securities sold pursuant to any Shelf Registration Statement
free of any restrictive legends and, with respect of any Securities, in such
denominations permitted by the Indenture and registered in such names as Holders
may request at least two Business Days prior to settlement of sales of Transfer
Restricted Securities pursuant to such Shelf Registration Statement. The
provisions of this 3(h) shall not apply to the Securities for so long as they
are held in book-entry form and are represented by a global certificate issued
to DTC or its nominee.
10
(i) Subject to the exceptions contained in (A) and (B) of Section
3(g) above, the Company shall use its reasonable best efforts to cause the
Transfer Restricted Securities covered by the applicable Shelf Registration
Statement to be registered with or approved by such other federal, state and
local governmental agencies or authorities, and self-regulatory organizations in
the United States as may be necessary to enable the Notice Holders to consummate
the disposition of such Transfer Restricted Securities as contemplated by the
Shelf Registration Statement; without limitation to the foregoing, the Company
shall provide all such information as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
offering under the Shelf Registration Statement of the Transfer Restricted
Securities (including, without limitation, such as may be required by NASD Rule
2710 or 2720), and shall cooperate with each Notice Holder, at such Holder's
expense, in connection with any filings required to be made with the NASD by
such Holder in that regard.
(j) Upon the occurrence of any event described in Section 3(c)(v) or
3(c)(vi) hereof, the Company shall promptly prepare and file with the SEC a
post-effective amendment to any Shelf Registration Statement, or an amendment or
supplement to the related Prospectus, or any document incorporated therein by
reference, or file a document which is incorporated or deemed to be incorporated
by reference in such Shelf Registration Statement or Prospectus, as the case may
be, so that, as thereafter delivered to purchasers of the Transfer Restricted
Securities included therein, the Shelf Registration Statement and the
Prospectus, in each case as then amended or supplemented, will not include an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein (in
the case of the Prospectus in light of the circumstances under which they were
made) not misleading and, in the case of a post-effective amendment, use its
reasonable best efforts to cause it to become effective as promptly as
practicable; provided that the Company's obligations under this paragraph (j)
shall be suspended if the Company has suspended the use of the Prospectus in
accordance with Section 2(d) hereof and given notice of such suspension to
Notice Holders, it being understood that the Company's obligations under this
Section 3(j) shall be automatically reinstated at the end of such Suspension
Period.
(k) The Company shall use its reasonable best efforts to provide,
prior to the effective date of any Shelf Registration Statement hereunder (i) a
CUSIP number for the Transfer Restricted Securities registered under such Shelf
Registration Statement and (ii) global certificates for such Transfer Restricted
Securities to the Trustee, in a form eligible for deposit with DTC.
(l) The Company shall use its reasonable best efforts to comply
with all applicable rules and regulations of the SEC and shall make generally
available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the Act and Rule 158 promulgated by the SEC
thereunder (or any similar rule promulgated under the Act) for a 12-month period
commencing on the first day of the first fiscal quarter of the Company
commencing after the effective date of any Shelf Registration Statement or each
post-effective amendment to any Shelf Registration Statement, which such
statements shall be made available no later than 45 days after the end of the
12-month period or 90 days after the end of the 12-month period, if the 12-month
period coincides with the fiscal year of the Company.
11
(m) The Company shall use its reasonable best efforts to cause the
Indenture to be qualified under the TIA (as defined in the Indenture) not later
than the effective date of the first Shelf Registration Statement.
(n) The Company shall cause all shares of Common Stock issuable upon
conversion of the Securities to be reserved for listing on each securities
exchange or quotation system on which the Common Stock is then listed no later
than the date the applicable Shelf Registration Statement is declared effective
and, shall cause all Common Stock to be so listed when issued, and, in
connection therewith, to make such filings as may be required under the Exchange
Act and to have such filings declared effective as and when required thereunder.
(o) The Company may require each Holder of Transfer Restricted
Securities to be sold pursuant to any Shelf Registration Statement to furnish to
the Company such information regarding the Holder and the distribution of such
Transfer Restricted Securities sought by the Notice and Questionnaire and such
additional information as may, from time to time, be required by the Act and/or
the SEC, and the obligations of the Company to any Holder hereunder shall be
expressly conditioned on the compliance of such Holder with such request.
(p) The Company shall, if reasonably requested, use its reasonable
best efforts to incorporate in a Prospectus supplement or post-effective
amendment to a Shelf Registration Statement such relevant and customary
information as any Notice Holder may provide in writing to be included
concerning such Holder and the distribution of such Holder's Transfer Restricted
Securities or as the Majority Holders may otherwise provide in writing to be
included, and in either case shall make all required filings of such Prospectus
supplement or post-effective amendment as promptly as practicable in the
circumstances after being notified in writing of such matters to be incorporated
in such Prospectus supplement or post-effective amendment, provided that the
Company shall not be required to take any action under this Section 3(p) that is
not, in the reasonable opinion of counsel for the Company, in compliance with
applicable law.
(q) In the case of an underwritten offering, take all actions
necessary, or reasonably requested by the holders of a majority of the Transfer
Restricted Securities being sold, in order to expedite or facilitate disposition
of such Transfer Restricted Securities; provided that the Company shall not be
required to take any action in connection with an underwritten offering without
its consent, which consent may be withheld for any reason;
(r) If reasonably requested in writing in connection with any
disposition of Transfer Restricted Securities pursuant to a Shelf Registration
Statement, make reasonably available for inspection during normal business hours
by a representative for the Notice Holders of such Transfer Restricted
Securities and any broker-dealers, attorneys and accountants retained by such
Notice Holders, all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries as reasonable
requested, and cause the appropriate executive officers, directors and
designated employees of the Company and its subsidiaries to make reasonably
available for inspection during normal business hours all relevant information
reasonably requested by such representative for the Notice Holders or any such
broker-dealers, attorneys or accountants in connection with such disposition, in
each case as is customary for similar "due diligence" examinations; provided,
however that any information that is designated in writing by the Company, in
good faith, as confidential at the time of
12
delivery of such information shall be kept confidential by such persons, unless
disclosure thereof is made in connection with a court, administrative or
regulatory proceeding or required by law, or such information has become
available to the public generally through the Company or through a third party
without an accompanying obligation of confidentiality.
(s) Each Notice Holder agrees that, upon receipt of notice of the
happening of an event described in clauses (iv), (v)(, (vi) and (viii) of
Section 3(c), each Holder shall forthwith discontinue (and shall cause its
agents and representatives to discontinue) disposition of Transfer Restricted
Securities and will not resume disposition of Transfer Restricted Securities
until such Holder has received copies of an amended or supplemented Prospectus
contemplated by Section 3(j) hereof, or until such Holder is advised in writing
by the Company that the use of the Prospectus may be resumed or that the
relevant Suspension Period has been terminated, as the case may be, provided
that the foregoing shall not prevent the sale, transfer or other disposition of
Transfer Restricted Securities by a Notice Holder in a transaction which is
exempt from, or not subject to, the registration requirements of the Act, so
long as such Notice Holder does not and is not required to deliver the
applicable Prospectus or Shelf Registration Statement in connection with such
sale, transfer or other disposition, as the case may be; and provided, further,
that the provisions of this Section 3(s) shall not prevent the occurrence of a
Registration Default or otherwise limit the obligation of the Company to pay
Additional Amounts.
(t) In the event that any broker-dealer, with the consent of the
Company which consent may be withheld for any reason, shall underwrite any
Transfer Restricted Securities or participate as a member of an underwriting
syndicate or selling group or "assist in the public distribution" (within the
meaning of the NASD Rules) thereof, whether as a Holder of such Transfer
Restricted Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, the Company shall assist such
broker-dealer in complying with the NASD Rules, including, without limitation,
by:
(i) if the NASD Rules shall so require, engaging a "qualified
independent underwriter" (as defined in the NASD Rules) to participate
in the preparation of the Shelf Registration Statement, to exercise
usual standards of due diligence with respect thereto and, if any
portion of the offering contemplated by the Shelf Registration Statement
is an underwritten offering or is made through a placement or sales
agent, to recommend the price of such Transfer Restricted Securities;
(ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of Holders provided in Section 5 hereof;
and
(iii) providing such information to such broker-dealer as may be
required in order for such broker-dealer to comply with the requirements
of the NASD Rules.
4. Registration Expenses. The Company shall bear all expenses
incurred in connection with the performance of its obligations under Sections 2
and 3 hereof and shall reimburse the Holders for the reasonable fees and
disbursements of one firm or counsel designated by the Majority Holders to act
as counsel for the Holders in connection therewith. Notwithstanding the
provisions of this Section 4, each Holder shall bear the expense of any broker's
commission, agency fee and underwriter's discount or commission, if any,
relating to
13
the sale or disposition of such Holder's Transfer Restricted Securities pursuant
to a Shelf Registration Statement.
5. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Holder of
Transfer Restricted Securities covered by any Shelf Registration Statement
(including, without limitation, the Initial Purchasers) and each person who
controls any such Holder within the meaning of either the Act or the Exchange
Act (collectively referred to for purposes of this Section 5 as a "Holder")
against any losses, claims, damages or liabilities, joint or several, to which
any of them may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Shelf Registration Statement, or in any
Prospectus, or any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and will reimburse each such party
for any legal or other expenses reasonably incurred by such party in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, (i) that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon Holder Information, (ii) that with respect to any untrue
statement or omission of material fact made in any Shelf Registration Statement,
or in any Prospectus, the indemnity agreement contained in this Section 5(a)
shall not inure to the benefit of the Holder or any person who controls the
Holder within the meaning of either the Act or the Exchange Act from whom the
person asserting any such loss, claim, damage or liability purchased the
securities concerned, to the extent that any such loss, claim, damage or
liability of the Holders occurs under the circumstance where it shall have been
established that (w) the Company had previously furnished copies of the
Prospectus, and any amendments and supplements thereto, to the Holder, (x)
delivery of the Prospectus, and any amendment or supplements thereto, was
required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Prospectus was corrected in
amendments or supplements thereto, and (z) there was not sent or given to such
person, at or prior to the written confirmation of the sale of such securities
to such person, a copy of such amendments or supplements to the Prospectus, and
(iii) the Company will not be liable for any such loss, claim, damage or
liability in connection with any settlement of any pending or threatened
litigation or any pending or threatened governmental agency investigation or
proceeding if that settlement is effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld. This indemnity
agreement will be in addition to any liability that the Company may otherwise
have.
(b) Each Holder, severally and not jointly, agrees to indemnify and
hold harmless the Company, each of its directors and officers and each person
who controls the Company within the meaning of either the Act or the Exchange
Act, to the same extent as the foregoing indemnity from the Company to the
Holders and agrees to reimburse each such indemnified party, as incurred, for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any loss, claim, damage, liability or action, but
only with reference to Holder Information supplied by such Holder. This
indemnity agreement will be in addition to any liability that such Holder may
otherwise have.
14
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons in connection with any one action or
similar but separate or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, and that all such fees and
expenses shall be reimbursed as they are incurred. Any such separate firm for
the Initial Purchasers, the Holders and such control persons of the Initial
Purchasers and the Holders shall be designated in writing by the Holders and any
such separate firm for the Company, its directors, its officers and such control
persons of the Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested an Indemnifying Person
to reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by the third sentence of this paragraph, the Indemnifying Person
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such Indemnifying Person of the aforesaid request and (ii)
such Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement, unless the
indemnifying party shall in good faith contest the reasonableness of such fees
and expenses (but only to the extent so contested) or the entitlement of the
indemnified person to indemnification under the terms of this Section 5. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding on terms
reasonably satisfactory to such Indemnified Person.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason,
15
each indemnifying party agrees to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively, "Losses") to
which the indemnified party may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company from the Initial
Placement, on the one hand, and a Holder with respect to the sale by such Holder
of Securities or Common Stock, on the other hand; provided, however, that in no
case shall an indemnifying party that is a Holder be responsible for any amount
in excess of the total price at which the Transfer Restricted Securities are
sold by such Holder to a purchaser. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
such Holder shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on the
one hand and of such Holder on the other in connection with the statements or
omissions which resulted in such Losses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and such Holder on the other shall be deemed to be in the same respective
proportions as the total net proceeds from the Initial Placement (before
deducting expenses) received by or on behalf of the Company as set forth in the
Offering Memorandum, on the one hand, and the total proceeds received by such
Holder with respect to its sale of Transferred Restricted Securities under the
Shelf Registration Statement, on the other hand, bear to the total gross
proceeds from the Initial Placement. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
relates to Holder Information supplied by such Holder, on the other, the intent
of the parties and their relative knowledge, information and opportunity to
correct or prevent such untrue statement or omission. The parties agree that it
would not be just and equitable if contribution pursuant to this paragraph (d)
were determined by pro rata allocation or any other method of allocation that
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 5(d), each person who
controls such Holder within the meaning of either the Act or the Exchange Act
shall have the same rights to contribution as such Holder, and each person who
controls the Company within the meaning of either the Act or the Exchange Act
and each officer and director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
(e) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder, any
underwriter or the Company or any of the officers, directors or controlling
persons referred to in Section 5 hereof, and will survive the sale by a Holder
of Transfer Restricted Securities covered by a Shelf Registration Statement.
6. Rules 144 and 144A. The Company covenants that it shall use its
reasonable best efforts to file the reports required to be filed by it under the
Act and the Exchange Act in a timely manner so long as the Transfer Restricted
Securities remain outstanding. If at any time the Company is not required to
file such reports, it will, upon request of any Holder or beneficial owner of
Transfer Restricted Securities, make available such
16
information necessary to permit sales pursuant to Rule 144A. The Company further
covenants that, for as long as any Transfer Restricted Securities remain
outstanding, it will take such further action as any Holder of Transfer
Restricted Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Transfer Restricted Securities
without registration under the Act within the limitation of the exemptions
provided by Rule 144 and Rule 144A. Upon the written request of any Holder of
Transfer Restricted Securities, the Company shall deliver to such Holder a
written statement as to whether it has complied with such requirements.
7. Underwritten Offerings.
(a) If any of the Transfer Restricted Securities covered by any
Shelf Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the underwritten offering will be selected by the Majority Holders of
such Transfer Restricted Securities included in such underwritten offering,
subject to the consent of the Company (which shall not be unreasonably withheld
or delayed), and such Holders shall be responsible for all underwriting
commissions and discounts in connection therewith; provided, however, that
notwithstanding anything contained in this Agreement to the contrary, no
underwritten offering shall be effected pursuant to this Agreement without the
prior consent of the Company, which consent may be withheld for any reason.
(b) No Holder may participate in any underwritten offering hereunder
unless such person (i) agrees to sell such Holder's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the Holders entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
8. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not, as of the date
hereof, entered into nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of at least the majority of the Holders of the then outstanding Transfer
Restricted Securities; provided that with respect to any matter that directly or
indirectly affects the rights of the Initial Purchasers hereunder, the Company
shall obtain the written consent of the Initial Purchasers against which such
amendment, qualification, supplement, waiver or consent is to be effective.
Notwithstanding the foregoing (except the foregoing proviso), a waiver or
consent to departure from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Transfer Restricted
Securities are
17
being sold pursuant to a Shelf Registration Statement and that does not directly
or indirectly affect the rights of other Holders may be given by the Majority
Holders.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:
(i) if to the Initial Purchasers, initially at their address set
forth in the Purchase Agreement;
(ii) if to any other Holder, at the most current address of such
Holder maintained by the Registrar under the Indenture or the registrar
of the Common Stock (provided that while the Securities or the Common
Stock are in book-entry form, notice to the Trustee shall serve as
notice to the Holders), or, in the case of the Notice Holder, the
address set forth in its Notice and Questionnaire; and
(iii) if to the Company, initially at its address set forth in the
Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received, if delivered by hand or air courier, and when sent, if sent
by first-class mail or telecopier.
The Initial Purchasers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders. The Company hereby agrees to extend the
benefits of this Agreement to any Holder and underwriter and any such Holder and
underwriter may specifically enforce the provisions of this Agreement as if an
original party hereto. In the event that any other person shall succeed to the
Company under the Indenture, then such successor shall enter into an agreement,
in form and substance reasonably satisfactory to the Initial Purchasers, whereby
such successor shall assume all of the Company's obligations under this
Agreement.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN SAID STATE.
18
(h) Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Securities
or the shares of Common Stock issuable upon conversion thereof is required
hereunder, Securities or the shares of Common Stock issued upon conversion
thereof held by the Company or its Affiliates (other than subsequent Holders of
Securities or the Common Stock issued upon conversion thereof if such subsequent
Holders are deemed to be Affiliates solely by reason of their holdings of such
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
(j) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Shelf Registration Period, except
for any liabilities or obligations under Section 2(e), 4 or 5 to the extent
arising prior to the end of the Shelf Registration Period.
19
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
VISHAY INTERTECHNOLOGY, INC.
By: /s/ Richard N. Grubb
--------------------------------
Name: Richard N. Grubb
Title: Chief Financial Officer and
Executive Vice President
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
J.P. MORGAN SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
WACHOVIA CAPITAL MARKETS, LLC
Acting on behalf of themselves and as Representatives
of the Initial Purchasers
By: J.P. MORGAN SECURITIES INC.,
By: /s/ Kevin Kulak
------------------------
Name: Kevin Kulak
Title: Vice President
20
Exhibit 5.1
_______________, 2003
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, PA 19355-2120
Re: Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel to Vishay Intertechnology, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing of a
Registration Statement on Form S-3 (the "Registration Statement"), for the
registration of the sale from time to time by the holders thereof of (i) up to
$500,000,000 aggregate principal amount of the Company's 3 5/8% Convertible
Subordinated Notes Due 2023 (the "Notes") issued pursuant to the terms of an
Indenture, the form of which is filed as Exhibit 4.1 to the Registration
Statement, and (ii) the shares (the "Shares") of common stock, par value $0.10
per share, of the Company initially issuable upon conversion of the Notes.
We have made such inquiries and reviewed such documents and records as we
have deemed necessary to enable us to express an opinion on the matters covered
hereby, and we have also examined and relied upon representations, statements or
certificates of public officials and officers and representatives of the
Company. We have assumed that the Notes have been duly authenticated by the
Trustee for the Notes as provided for in the Indenture for the Notes.
Based upon and subject to the foregoing, we are of the opinion that:
1. the Notes have been legally issued and constitute the binding
obligations of the Company, subject to applicable bankruptcy, insolvency and
other similar laws relating to or affecting the rights and remedies of creditors
generally and to general principles of equity; and
2. the Shares have been duly authorized and reserved and, when issued upon
conversion of the Notes in accordance with the terms of the Notes and the
Indenture, will be legally issued, fully paid and non-assessable.
We do not express any opinion with respect to any law other than the laws
of the State of New York, the Delaware General Corporation Law and the federal
laws of the United States of America. This opinion is rendered only with respect
to the laws and legal interpretations and the facts and circumstances in effect
on the date hereof which are in effect.
We hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the prospectus included in the Registration Statement. In giving
this consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations promulgated thereunder.
Very truly yours,
Exhibit 8.1
KRAMER LEVIN NAFTALIS & FRANKEL LLP
919 THIRD AVENUE
NEW YORK, NY 10022 - 3852
PARIS
TEL (212) 715-9100 47, AVENUE HOCHE 75008
FAX (212) 715-8000 TEL (33-1) 44 09 46 00
FAX (33-1) 44 09 46 01
________, 2003
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malverne, Pennsylvania 19355-2120
Ladies and Gentlemen:
We have acted as counsel to Vishay Intertechnology, Inc., a
Delaware corporation (the "Company"), in connection with the registration of
$500,000,000 principal amount of 3 5/8% Convertible Subordinated Notes Due 2023
(the "Notes") and 23,496,250 shares of common stock (the "Shares") issuable upon
conversion of the Notes.
For purposes of the opinion set forth below, we have reviewed
and relied upon (i) the Registration Statement on Form S-3 (File No. 333-_____)
(the "Registration Statement") filed by the Company with the Securities and
Exchange Commission in respect of the Notes and the Shares, and (ii) such other
documents, records, and instruments as we have deemed necessary or appropriate
as a basis for our opinion. In addition, in rendering our opinion we have relied
upon certain statements and representations made by the Company, as well as
certain statements contained in the Registration Statement. We have assumed that
all such statements and representations are true, correct, complete, and not
breached, and that no actions that are inconsistent with such statements and
representations will be taken. We have also assumed that any representations
made "to the best knowledge of" any persons will be true, correct, and complete
as if made without such qualification.
Any inaccuracy in, or breach of, any of the aforementioned
statements, representations and assumptions or any change after the date hereof
in applicable law could adversely affect our opinion. No ruling has been (or
will be) sought from the Internal Revenue Service (the "IRS") by the Company as
to the United States federal tax consequences of the purchase, ownership and
disposition of the Notes or the Shares. The opinion expressed herein is not
binding on the IRS or any court, and there can be no assurance that the IRS or a
court of competent jurisdiction will not disagree with such opinion.
Based upon and subject to the foregoing as well as the
limitations set forth below, under presently applicable United States federal
tax law, the discussion set forth in the Registration Statement under the
caption "Certain United States Federal Tax Considerations," to the extent it
sets forth material federal income and estate tax consequences of the purchase,
ownership and disposition of Notes and the Shares to the holders described
therein, constitutes our opinion.
No opinion is expressed as to any matter not specifically
addressed above. Also, no opinion is expressed as to the tax consequences of the
purchase, ownership and disposition of Notes or the Shares under any United
States state or local or non-United States tax law. Furthermore, our opinion is
based on current United States federal income and estate tax law and
administrative practice, which may be changed at any time with retroactive
effect. We do not undertake to advise you as to any changes after the date of
this opinion in United States federal income or estate tax law or administrative
practice that may affect our opinion unless we are specifically asked to do so.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the references to our firm name therein.
The giving of this consent, however, does not constitute an admission that we
are "experts" within the meaning of Section 11 of the Securities Act of 1933, as
amended, or within the category of persons whose consent is required by Section
7 of such Act.
This opinion has been delivered to you for the purpose of
being included as an exhibit to the Registration Statement.
Very truly yours,
Exhibit 12.1
VISHAY INTERTECHNOLOGY, INC.
RATIO OF EARNINGS TO FIXED CHARGES
Six months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
6/30/03 12/31/02(1) 12/31/01 12/31/00 12/31/99 12/31/98
Net Earnings(loss)
Income(loss) before income taxes and minority
interest $ 17,792 $(100,045) $ 10,103 $ 690,225 $134,711 $ 42,646
Fixed charges 25,121 38,371 26,027 33,792 61,290 57,384
Less: Equity in income of affiliates 0 0 0 (2,573) (2,195) (1,084)
-------- -------- -------- -------- -------- --------
Earnings(loss), as adjusted $ 42,913 $ (61,674) $ 36,130 $721,444 $ 193,806 $ 98,946
======== ======== ======== ======== ======== ========
Fixed Charges
Interest expense $ 19,465 $ 28,761 $ 16,848 $ 25,177 $ 53,296 $ 49,038
Portion of rent expense representative of interest 5,191 9,125 7,588 7,143 7,130 7,901
Amortization of deferred issuance costs 465 485 1,591 1,472 864 445
-------- -------- -------- -------- -------- --------
Total Fixed Charges
$ 25,121 $ 38,371 $ 26,027 $ 33,792 $ 61,290 $ 57,384
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges 1.71 -- 1.39 21.35 3.16 1.72
======== ======== ======== ======== ======== ========
(1) Earnings were insufficient to cover fixed charges by $61,674,000.
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-00000) and related Prospectus of Vishay
Intertechnology, Inc. for the registration of $500,000,000 of 3 5/8% Convertible
Subordinated Notes due 2023 and 23,496,250 shares of common stock issuable upon
conversion of $500,000,000 of 3 5/8% Convertible Subordinated Notes due 2023 and
to the incorporation by reference therein of our report dated February 6, 2003,
with respect to the consolidated financial statements of Vishay Intertechnology,
Inc. included in its Annual Report (Form 10-K/A) for the year ended December 31,
2002, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
November 3, 2003
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
WACHOVIA BANK, NATIONAL ASSOCIATION
(Exact Name of Trustee as Specified in its Charter)
22-1147033
(I.R.S. Employer Identification No.)
301 S. COLLEGE STREET, CHARLOTTE, NORTH CAROLINA
(Address of Principal Executive Offices)
28288-0630
(Zip Code)
WACHOVIA BANK, NATIONAL ASSOCIATION
123 SOUTH BROAD STREET
PHILADELPHIA, PA 19109
ATTENTION: CORPORATE TRUST ADMINISTRATION
(215) 670-6300
(Name, address and telephone number of Agent for Service)
VISHAY INTERTECHNOLOGY, INC.
(Exact Name of Obligor as Specified in its Charter)
DELAWARE
(State or other jurisdiction of Incorporation or Organization)
38-1686453
(I.R.S. Employer Identification No.)
63 LINCOLN HIGHWAY
MALVERN, PA
(Address of Principal Executive Offices)
19355
(Zip Code)
3 5/8% Convertible Subordinated Notes due 2023
(Title of Indenture Securities)
1. General information.
Furnish the following information as to the trustee:
a) Name and address of each examining or supervisory authority to which it
is subject:
Comptroller of the Currency
United States Department of the Treasury
Washington, D.C. 20219
Federal Reserve Bank
Richmond, Virginia 23219
Federal Deposit Insurance Corporation
Washington, D.C. 20429
b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with obligor.
If the obligor is an affiliate of the trustee, describe each such affiliation.
None.
3. Voting securities of the trustee.
Furnish the following information as to each class of voting securities of the
trustee:
Not applicable - see answer to Item 13.
4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
Not applicable - see answer to Item 13.
5. Interlocking directorates and similar relationships with the obligor or
underwriters.
If the trustee or any of the directors or executive officers of the trustee is a
director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not applicable - see answer to Item 13.
6. Voting securities of the trustee owned by the obligor or its officials.
Furnish the following information as to the voting securities of the trustee
owned beneficially by the obligor and each director, partner, and executive
officer of the obligor:
Not applicable - see answer to Item 13.
7. Voting securities of the trustee owned by underwriters or their officials.
Furnish the following information as to the voting securities of the trustee
owned beneficially by each underwriter for the obligor and each director,
partner, and executive officer of each such underwriter:
Not applicable - see answer to Item 13.
8. Securities of the obligor owned or held by the trustee.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default by the
trustee:
Not applicable - see answer to Item 13.
9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security for obligations
in default any securities of an underwriter for the obligor, furnish the
following information as to each class of securities of such underwriter any of
which are so owned or held by the trustee:
Not applicable - see answer to Item 13.
10. Ownership or holdings by the trustee of voting securities of certain
affiliates or security holders of the obligor.
If the trustee owns beneficially or holds as collateral security for obligations
in default voting securities of a person who, to the knowledge of the trustee
(1) owns 10 percent or more of the voting stock of the obligor or (2) is an
affiliate, other than a subsidiary, of the obligor, furnish the following
information as to the voting securities of such person:
Not applicable - see answer to Item 13.
11. Ownership or holdings by the trustee of any securities of a person owning 50
percent or more of the voting securities of the obligor.
If the trustee owns beneficially or holds as collateral security for obligations
in default any securities of a person who, to the knowledge of the trustee, owns
50 percent or more of the voting securities of the obligor, furnish the
following information as to each class of securities of such person any of which
are so owned or held by the trustee:
Not applicable - see answer to Item 13.
12. Indebtedness of the obligor to the trustee.
Except as noted in the instructions, if the obligor is indebted to the trustee,
furnish the following information:
Not applicable - see answer to Item 13.
13. Defaults by the obligor.
a) State whether there is or has been a default with respect to the securities
under this indenture. Explain the nature of any such default.
None.
b) If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
14. Affiliations with the underwriters.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not applicable - see answer to Item 13.
15. Foreign trustee.
Identify the order or rule pursuant to which the trustee is authorized to act as
sole trustee under indentures qualified or to be qualified under the Act.
Not applicable - trustee is a national banking association organized under
the laws of the United States.
16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
__ 1. Copy of Articles of Association of the trustee as now in effect.*
__ 2. Copy of the Certificate of the Comptroller of the Currency dated March 27,
2002, evidencing the authority of the trustee to transact business.*
__ 3. Copy of the Certification of Fiduciary Powers of the trustee by the
Office of the Comptroller of the Currency dated March 27, 2002.*
__ 4. Copy of existing by-laws of the trustee.*
__ 5. Copy of each indenture referred to in Item 4, if the obligor is in
default.
- Not Applicable.
X 6. Consent of the trustee required by Section 321(b) of the Act.
- --
X 7. Copy of report of condition of the trustee at the close of business on
- -- June 30, 2003, published pursuant to the requirements of its supervising
authority.
__ 8. Copy of any order pursuant to which the foreign trustee is authorized to
act as sole trustee under indentures qualified or to be qualified under the Act.
Not Applicable
__ 9. Consent to service of process required of foreign trustees pursuant to
Rule 10a-4 under the Act.
Not Applicable
- ------------------------
*Previously filed with the Securities and Exchange Commission on April 11,
2002 as an Exhibit to Form T-1 in connection with Registration Statement File
No. 333-86036 and is incorporated by reference herein.
NOTE
The trustee disclaims responsibility for the accuracy or completeness of
information contained in this Statement of Eligibility not known to the trustee
and not obtainable by it through reasonable investigation and as to which
information it has obtained from the obligor and has had to rely or will obtain
from the principal underwriters and will have to rely.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Wachovia Bank, National Association, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Philadelphia and the
Commonwealth of Pennsylvania, on the 4th day of November, 2003.
Wachovia Bank, National Association
By: /s/ Alan G. Finn
------------------------
Alan G. Finn
Vice President
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, and in connection with the proposed issue of Vishay Intertechnology,
Inc., 3 5/8% Convertible Subordinated Notes due 2023, Wachovia Bank, National
Association, hereby consents that reports of examinations by Federal, State,
Territorial or District authorities may be furnished by such authorities to the
Securities and Exchange Commission upon request therefor.
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Alan G.Finn
----------------------------
Alan G. Finn
Vice President
Philadelphia, Pennsylvania
November 4, 2003
EXHIBIT T-7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of Wachovia Bank, N.A., at the
close of business on June 30, 2003, published in response to call made by
Comptroller of the Currency, under title 12, United States Code, Section 161.
Charter Number 1 Comptroller of the Currency.
Statement of Resources and Liabilities
ASSETS
Thousand of Dollars
-------------------
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin......... 14,108,000
Interest-bearing balances.................................. 4,283,000
Securities....................................................
Held-to-maturity securities (from Schedule RC-B, column A). 0
Available-for-sale securities (from schedule RC-B, column D) 70,107,000
Federal funds sold and securities purchased under agreements to 0
resell........................................................
Federal funds sold in domestic offices........................ 2,060,000
Securities purchased under agreements to resell............... 4,782,000
Loans and lease financing receivables (from Schedule RC-C):
Loan and leases held for sale.............................. 10,391,000
Loan and leases, net of unearned income.................... 160,238,000
LESS: Allowance for loan and lease losses.................. 2,655,000
LESS: Allocated transfer risk reserve...................... 0
Loans and leases, net of unearned income and allowance 157,583,000
(item.4.b misus 4.c).......................................
Trading assets (from Schedule RC-D)........................... 26,931,000
Premises and fixed assets (including capitalized leases)...... 3,823,000
Other real estate owned (from Schedule RC-M).................. 163,000
Investment in unconsolidated subsidiaries and associated 689,000
companies (from Schedule RC-M)................................
Customer's liability to this bank on acceptances outstanding.. 1,074,000
Intangible assets.............................................
Goodwill................................................... 9,519,000
Other intangible assets (from Schedule RC-M).................. 1,608,000
Other assets (from Schedule RC-F)............................. 24,500,000
Total assets.......................... 331,621,000
LIABILITIES
Deposits:
In domestic offices........................................ 195,313,000
Noninterest-bearing...................................... 29,821,000
Interest-bearing......................................... 165,492,000
In foreign offices, Edge and Agreement subsidiaries, and IBFs 11,457,000
(from Schedule RC-E, partII)...............................
Noninterest-bearing...................................... 21,000
Interest-bearing......................................... 11,436,000
Federal funds purchased in domestic offices(2)................ 3,871,000
Securities sold under agreements to repurchase(3)............. 25,005,000
Trading liabilities(from Schedule RC-D)....................... 20,648,000
Other borrowed money (includes mortgage indebtedness and 19,665,000
obligations under Capitalized leases)(from Schedule RC-M)....
Bank's liability on acceptances executed and outstanding...... 1,078,000
Subordinated notes and debentures............................. 8,049,000
Other liabilities............................................. 13,250,000
Total liabilities............................................. 298,336,000
Minority Interest in consolidated subsidiaries................ 1,658,000
EQUITY CAPITAL
Perpetual preferred stock and related surplus............... 0
Common Stock.................................................. 455,000
Surplus....................................................... 24,184,000
Retained Earnings............................................. 4,879,000
Accumulated other comprehensive income........................ 2,109,000
Other Equity Capital components............................... 0
Total equity capital (sum of item 23 through 27).............. 31,627,000
Total liabilities and equity capital (sum of items 21,22, and 28 331,621,000