EXHIBIT 4.2
3M Company
Liquid Yield Option(TM) Notes
due 2032
$639,000,000
(Zero Coupon-Senior)
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INDENTURE
Dated November 21, 2002
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CITIBANK, N.A.
TRUSTEE
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(TM)Trademark of Merrill Lynch & Co., Inc.
CROSS REFERENCE TABLE*
TIA Section........................................................ Indenture Section
310 (a)(1)....................................................... 7.10
(a)(2)....................................................... 7.10
(a)(3)....................................................... N.A.
(a)(4)....................................................... N.A.
(b).......................................................... 7.08; 7.10
(c).......................................................... N.A.
311 (a).......................................................... 7.11
(b).......................................................... 7.11
(c).......................................................... N.A.
312 (a).......................................................... 2.05
(b).......................................................... 12.03
(c).......................................................... 12.03
313 (a).......................................................... 7.06
(b)(1)....................................................... N.A.
(b)(2)....................................................... 7.06
(c).......................................................... 12.02
(d).......................................................... 7.06
314 (a).......................................................... 4.02; 4.03; 12.02
(b).......................................................... N.A.
(c)(1)....................................................... 12.04
(c)(2)....................................................... 12.04
(c)(3)....................................................... N.A.
(d).......................................................... N.A.
(e).......................................................... 12.05
(f).......................................................... N.A.
315 (a).......................................................... 7.01
(b).......................................................... 7.05; 12.02
(c).......................................................... 7.01
(d).......................................................... 7.01
(e).......................................................... 6.11
316 (a) (last sentence).......................................... 2.08
(a)(1)(A).................................................... 6.05
(a)(1)(B).................................................... 6.04
(a)(2)....................................................... N.A.
(b).......................................................... 6.07
317 (a)(1)....................................................... 6.08
(a)(2)....................................................... 6.09
(b).......................................................... 2.04
318 (a).......................................................... 12.01
N.A. means Not Applicable.
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*Note: This Table of Contents shall not, for any purpose, be deemed to be part of the Indenture.
TABLE OF CONTENTS*
Page
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1
SECTION 1.01. Definitions.................................................................................1
SECTION 1.02. Other Definitions...........................................................................5
SECTION 1.03. Incorporation by Reference of Trust Indenture Act...........................................6
SECTION 1.04. Rules of Construction.......................................................................6
SECTION 1.05. Acts of Holders.............................................................................7
ARTICLE 2 THE SECURITIES 8
SECTION 2.01. Form and Dating.............................................................................8
SECTION 2.02. Execution and Authentication...............................................................10
SECTION 2.03. Registrar, Paying Agent, Conversion Agent and Bid Solicitation Agent.......................10
SECTION 2.04. Paying Agent to Hold Money and Securities in Trust.........................................11
SECTION 2.05. Securityholder Lists.......................................................................11
SECTION 2.06. Transfer and Conversion....................................................................12
SECTION 2.07. Replacement Securities.....................................................................13
SECTION 2.08. Outstanding Securities; Determinations of Holders' Action..................................14
SECTION 2.09. Temporary Securities.......................................................................14
SECTION 2.10. Cancellation...............................................................................15
SECTION 2.11. Persons Deemed Owners......................................................................15
SECTION 2.12. Global Securities..........................................................................15
SECTION 2.13. CUSIP Numbers..............................................................................20
ARTICLE 3 REDEMPTION AND PURCHASES 21
SECTION 3.01. Right to Redeem; Notices to Trustee........................................................21
SECTION 3.02. Selection of Securities to Be Redeemed.....................................................21
SECTION 3.03. Notice of Redemption.......................................................................21
SECTION 3.04. Effect of Notice of Redemption.............................................................22
SECTION 3.05. Deposit of Redemption Price................................................................23
SECTION 3.06. Securities Redeemed in Part................................................................23
SECTION 3.07. Conversion Arrangement on Call for Redemption..............................................23
SECTION 3.08. Purchase of Securities at Option of the Holder.............................................24
SECTION 3.09. Purchase of Securities at Option of the Holder upon Change in Control......................30
SECTION 3.10. Effect of Purchase Notice or Change in Control Purchase Notice.............................33
SECTION 3.11. Deposit of Purchase Price or Change in Control Purchase Price..............................34
SECTION 3.12. Securities Purchased in Part...............................................................35
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*Note: This Table of Contents shall not, for any purpose, be deemed to be part of the Indenture.
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SECTION 3.13. Covenant to Comply With Securities Laws Upon Purchase of Securities........................35
SECTION 3.14. Repayment to the Company...................................................................35
ARTICLE 4 COVENANTS 36
SECTION 4.01. Payment of Securities......................................................................36
SECTION 4.02. SEC and Other Reports......................................................................36
SECTION 4.03. Compliance Certificate.....................................................................37
SECTION 4.04. Further Instruments and Acts...............................................................37
SECTION 4.05. Maintenance of Office or Agency............................................................37
SECTION 4.06. Delivery of Certain Information............................................................37
SECTION 4.07. Calculation of Tax Original Issue Discount.................................................38
ARTICLE 5 SUCCESSOR CORPORATION 38
SECTION 5.01. Company May Consolidate, etc. Only on Certain Terms........................................38
SECTION 5.02. Successor Corporation Substituted..........................................................39
ARTICLE 6 DEFAULTS AND REMEDIES 39
SECTION 6.01. Events of Default..........................................................................39
SECTION 6.02. Acceleration...............................................................................41
SECTION 6.03. Other Remedies.............................................................................41
SECTION 6.04. Waiver of Past Defaults....................................................................42
SECTION 6.05. Control by Majority........................................................................42
SECTION 6.06. Limitation on Suits........................................................................42
SECTION 6.07. Rights of Holders to Receive Payment.......................................................43
SECTION 6.08. Collection Suit by Trustee.................................................................43
SECTION 6.09. Trustee May File Proofs of Claim...........................................................43
SECTION 6.10. Priorities.................................................................................44
SECTION 6.11. Undertaking for Costs......................................................................44
SECTION 6.12. Waiver of Stay, Extension or Usury Laws....................................................45
ARTICLE 7 TRUSTEE 45
SECTION 7.01. Duties of Trustee..........................................................................45
SECTION 7.02. Rights of Trustee..........................................................................46
SECTION 7.03. Individual Rights of Trustee...............................................................48
SECTION 7.04. Trustee's Disclaimer.......................................................................48
SECTION 7.05. Notice of Defaults.........................................................................48
SECTION 7.06. Reports by Trustee to Holders..............................................................48
SECTION 7.07. Compensation and Indemnity.................................................................49
SECTION 7.08. Replacement of Trustee.....................................................................49
SECTION 7.09. Successor Trustee by Merger................................................................50
SECTION 7.10. Eligibility; Disqualification..............................................................50
ARTICLE 8 DISCHARGE OF INDENTURE 51
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SECTION 8.01. Discharge of Liability on Securities.......................................................51
SECTION 8.02. Repayment to the Company...................................................................51
ARTICLE 9 AMENDMENTS 51
SECTION 9.01. Without Consent of Holders.................................................................51
SECTION 9.02. With Consent of Holders....................................................................52
SECTION 9.03. Compliance with Trust Indenture Act........................................................53
SECTION 9.04. Revocation and Effect of Consents, Waivers and Actions.....................................53
SECTION 9.05. Notation on or Exchange of Securities......................................................53
SECTION 9.06. Trustee to Sign Supplemental Indentures....................................................54
SECTION 9.07. Effect of Supplemental Indentures..........................................................54
ARTICLE 10 CONVERSION 54
SECTION 10.01. Conversion Privilege.......................................................................54
SECTION 10.02. Conversion Procedure.......................................................................55
SECTION 10.03. Fractional Shares..........................................................................57
SECTION 10.04. Taxes on Conversion........................................................................57
SECTION 10.05. Company to Provide Stock...................................................................58
SECTION 10.06. Adjustment for Change In Capital Stock.....................................................58
SECTION 10.07. Adjustment for Rights Issue................................................................59
SECTION 10.08. Adjustment for Other Distributions.........................................................60
SECTION 10.09. When Adjustment May Be Deferred............................................................62
SECTION 10.10. When No Adjustment Required................................................................63
SECTION 10.11. Notice of Adjustment.......................................................................63
SECTION 10.12. Voluntary Increase.........................................................................63
SECTION 10.13. Notice of Certain Transactions.............................................................63
SECTION 10.14. Reorganization of Company; Special Distributions...........................................64
SECTION 10.15. Company Determination Final................................................................65
SECTION 10.16. Trustee's Adjustment Disclaimer............................................................65
SECTION 10.17. Simultaneous Adjustments...................................................................65
SECTION 10.18. Successive Adjustments.....................................................................65
SECTION 10.19. Rights Issued in Respect of Common Stock Issued Upon Conversion............................65
ARTICLE 11 PAYMENT OF INTEREST 66
SECTION 11.01. Interest Payments..........................................................................66
SECTION 11.02. Defaulted Interest.........................................................................66
SECTION 11.03. Interest Rights Preserved..................................................................67
ARTICLE 12 MISCELLANEOUS 67
SECTION 12.01. Trust Indenture Act Controls...............................................................67
SECTION 12.02. Notices; Address of Agency.................................................................67
SECTION 12.03. Communication by Holders with Other Holders................................................68
SECTION 12.04. Certificate and Opinion as to Conditions Precedent.........................................68
SECTION 12.05. Statements Required in Certificate or Opinion..............................................69
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SECTION 12.06. Separability Clause........................................................................69
SECTION 12.07. Rules by Trustee, Paying Agent, Conversion Agent and Registrar.............................69
SECTION 12.08. Calculations...............................................................................69
SECTION 12.09. Legal Holidays.............................................................................70
SECTION 12.10. Governing Law..............................................................................70
SECTION 12.11. No Recourse Against Others.................................................................70
SECTION 12.12. Successors.................................................................................70
SECTION 12.13. Multiple Originals.........................................................................70
LIST OF EXHIBITS
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Exhibit A-1 Form of Rule 144A Global Security
Exhibit A-2 Form of IAI Security
Exhibit B-1 Transfer Certificate
Exhibit B-2 Form of Letter to be Delivered by Accredited Investors
Annex C Projected Payment Schedule
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INDENTURE dated as of November 21, 2002 between 3M Company, a
Delaware corporation (the "Company"), and Citibank, N.A., a national banking
association ("Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's
Liquid Yield OptionTM Notes due 2032 (Zero Coupon Senior) (the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE SECTION
SECTION 1.01. Definitions.
"Affiliate" of any specified person means any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of such board.
"Business Day" means each day of the year other than a
Saturday or a Sunday or other day on which banking institutions in the City of
New York are required or authorized to close.
"Capital Stock" for any corporation means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that
corporation.
"Certificated Securities" means any Securities that are not
Global Securities.
"Common Stock" shall mean the shares of common stock, par
value $.01 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 the "Company" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by any two Officers.
"Corporate Trust Office" means the principal office of the
Trustee at which at any time its corporate trust business shall be administered,
which office at the date hereof is located at 111 Wall Street, 14th Floor, New
York, NY 10005, Attention: Citibank Agency and Trust Services or such other
address as the Trustee may designate from time to time by notice to the Holders
and the Company, or the principal corporate trust office of any successor
Trustee (or such other address as a successor Trustee may designate from time to
time by notice to the Holders and the Company).
"Debt" means with respect to the Company at any date, without
duplication, obligations (other than nonrecourse obligations) for borrowed money
or evidenced by bonds, debentures, notes or similar instruments.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Global Securities" means Securities that are in the form of
the Securities attached hereto as Exhibit A-1 or Exhibit A-2, and to the extent
that such Securities are required to bear the Legend required by Section 2.06,
such Securities will be in the form of a Rule 144A Global Security or IAI Global
Security, as the case may be.
"Holder" or "Securityholder" means a person in whose name a
Security is registered on the Registrar's books.
"Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof, including the provisions
of the TIA that are deemed to be a part hereof.
"Institutional Accredited Investor Security" means a Security
substantially in the form of the Security attached hereto as Exhibit A-2,
representing Securities sold to institutional "accredited investors" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act).
"Issue Date" of any Security means the date on which the
Security was originally issued or deemed issued as set forth on the face of the
Security.
"Issue Price" of any Security means, in connection with the
original issuance of such Security, the initial issue price at which the
Security is sold as set forth on the face of the Security.
"Officer" means the Chairman of the Board, the Vice Chairman,
the Chief Executive Officer, the President, any Executive Vice President, any
Senior Vice President, any Vice President, the Treasurer or the Secretary or any
Assistant Treasurer or Assistant Secretary of the Company.
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"Officers' Certificate" means a written certificate containing
the information specified in Sections 12.04 and 12.05, signed in the name of the
Company by any two Officers, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion containing the
information specified in Sections 12.04 and 12.05, from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company.
"Original Issue Discount" of any Security means the difference
between the Issue Price and the Principal Amount at Maturity of the Security as
set forth on the face of the Security.
"Person" or "person" means any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, or government or any agency or
political subdivision thereof.
"Principal Amount at Maturity" of a Security means the
Principal Amount at Maturity as set forth on the face of the Security.
"Protected Purchaser" shall have the meaning set forth in
Section 2.07.
"Purchase Date" means each date specified as such in paragraph
7 of the Securities.
"Purchase Price" means, with respect to any Purchase Date, the
applicable amount specified as such in paragraph 7 of the Securities.
"Redemption Date" or "redemption date" means the date
specified for redemption of the Securities in accordance with the terms of the
Securities and this Indenture.
"Redemption Price" or "redemption price" shall have the
meaning set forth in paragraph 6 of the Securities.
"Registration Rights Agreement" means the registration rights
agreement, dated as of November 21, 2002, between the Company and Merrill Lynch,
Pierce, Fenner & Smith Incorporated.
"Responsible Officer" means, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary, or
trust officer.
"Restricted Security" means a Security required to bear the
restrictive legend set forth in the form of Security set forth in Exhibits A-1
and A-2 of this Indenture.
"Rule 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.
3
"Rule 144A Global Security" means a permanent Global Security
substantially in the form of the Security attached hereto as Exhibit A-1, and
that is deposited with and registered in the name of the Depositary,
representing Securities sold in reliance on Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities" means any of the Company's Liquid Yield Option
Notes due 2032 (Zero Coupon-Senior), as amended or supplemented from time to
time, issued under this Indenture.
"Securityholder" or "Holder" means a person in whose name a
Security is registered on the Registrar's books.
"Significant Subsidiary" means a "significant subsidiary", as
such term is defined in Rule 1-02 of Regulation S-X under the Securities Act of
1933, as amended.
"Special Record Date" means for the payment of any Defaulted
Interest, the date fixed by the Trustee pursuant to Section 11.02.
"Stated Maturity", when used with respect to any Security or
any installment of contingent interest thereon, means the date specified in such
Security as the fixed date on which an amount equal to the Principal Amount at
Maturity of such Security or such installment of contingent interest is due and
payable.
"Subsidiary" means (i) a corporation, a majority of whose
Voting Stock is, at the date of determination, directly or indirectly owned by
the Company, by one or more Subsidiaries of the Company, or by the Company and
one or more Subsidiaries of the Company, (ii) a partnership in which the
Company, a Subsidiary of the Company or the Company and one or more Subsidiaries
of the Company, holds a majority interest in the equity capital or profits of
such partnership, or (iii) any other person (other than a corporation or a
partnership) in which the Company, a Subsidiary of the Company, or the Company
and one or more Subsidiaries of the Company, directly or indirectly, at the date
of determination, has (x) at least a majority ownership interest or (y) the
power to elect or direct the election of a majority of the directors or
trustees, as the case may be, or other governing body of such person.
"TIA" means the Trust Indenture Act of 1939 as in effect on
the date of this Indenture, provided, however, that in the event the TIA is
amended after such date, TIA means, to the extent required by any such
amendment, the TIA as so amended.
"Trading Day" means a day on which the New York Stock Exchange
is open for trading or, if the Common Stock is not listed on the New York Stock
Exchange, on the principal other national or regional securities exchange on
which the Common Stock is then listed or, if the Common Stock is not listed on a
national or regional securities exchange, on the National Association of
Securities Dealers Automated Quotation System or, if the Common Stock is not
quoted on the National Association of Securities Dealers Automated Quotation
System or, on any Business Day.
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"Trustee" means the party named as the "Trustee" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"Voting Stock" means, with respect to any corporation,
association, company or business trust, stock or other securities of the class
or classes having general voting power under ordinary circumstances to elect at
least a majority of the board of directors, managers or trustees of such
corporation, association, company or business trust, provided that, for the
purposes hereof, stock or other securities which carry only the right to vote
conditionally on the happening of an event shall not be considered Voting Stock
whether or not such event shall have happened.
SECTION 1.02. Other Definitions.
Term Defined in Section
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"Act" 1.05(a)
"Agent Members" 2.12(e)
"Average Sale Price" 10.01
"beneficial owner" 3.09(a)
"Bid Solicitation Agent" 2.03
"cash" 3.08(b)
"Change in Control" 3.09(a)
"Change in Control Purchase Date" 3.09(a)
"Change in Control Purchase Notice" 3.09(c)
"Change in Control Purchase Price" 3.09(a)
"Company Notice" 3.08(e)
"Company Notice Date" 3.08(c)
"Conversion Agent" 2.03
"Conversion Date" 10.02
"Conversion Rate" 10.01
"Defaulted Interest" 11.02
"Depositary" 2.01(a)
"DTC" 2.01(a)
"Event of Default" 6.01
"Exchange Act" 3.08(d)
"Ex-Dividend Date" 10.08(b)
"Ex-Dividend Time" 10.01
"Extraordinary Cash Dividend" 10.08(a)
"IAI Global Security" 2.01(b)
"Institutional Accredited Investors" 2.01(b)
"Legal Holiday" 12.09
"Legend" 2.06(f)
"LYON Market Price" Exhibit A-1
"Market Price" 3.08(d)
"Measurement Period" 10.08(a)
"noncontingent bond method" 4.07
5
Term Defined in Section
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"Notice of Default" 6.01
"Paying Agent" 2.03
"Post-Distribution Price" 10.08(b)
"Protected Purchaser" 2.07(a)
"Purchase Notice" 3.08(a)
"QIB" 2.01(a)
"Registrar" 2.03
"Relevant Cash Dividends" 10.08(a)
"Rights" 10.19
"Rights Agreement" 10.19
"Rule 144A Global Security" 2.01(a)
"Rule 144A Information" 4.06
"Sale Price" 3.08(d)
"Securities Act" 3.08(d)
"Tax OID" 4.07
"Time of Determination" 10.01
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with United States generally accepted
accounting principles as in effect from time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the
plural include the singular.
SECTION 1.05. Acts of Holders.
Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments (which
may take the form of an electronic writing or messaging or otherwise be in
accordance with customary procedures of the Depositary or the Trustee) of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing (which may be in electronic form); and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
(either of which may be in electronic form) shall be sufficient for any purpose
of this Indenture and conclusive in favor of the Trustee and the Company, if
made in the manner provided in this Section.
(a) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution (or electronic delivery) or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing or delivering such instrument or writing
acknowledged to such officer the execution thereof (or electronic delivery).
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority. The fact and date of the
execution of any such instrument or writing (electronic or otherwise), or the
authority of the Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
(b) The ownership of Securities shall be proved by the
register for the Securities maintained by the Registrar.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
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(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a resolution of the Board of
Directors, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
If such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on such record
date shall be deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of outstanding Securities have authorized or
agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the outstanding Securities
shall be computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities and the Trustee's certificate of authentication
shall be substantially in the form of Exhibits A-1 and A-2, which are parts of
this Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage (provided that any such notation,
legend or endorsement required by usage is in a form acceptable to the Company).
The Company shall provide any such notations, legends or endorsements to the
Trustee in writing. Each Security shall be dated the date of its authentication.
(a) Rule 144A Global Securities. Securities offered and sold
to qualified institutional buyers as defined in Rule 144A ("QIBs") in reliance
on Rule 144A shall be issued, initially in the form of a Rule 144A Global
Security, which shall be deposited with the Trustee at its Corporate Trust
Office, as custodian for the Depositary and registered in the name of The
Depository Trust Company ("DTC") or the nominee thereof (such depositary, or any
successor thereto, and any such nominee being hereinafter referred to as the
"Depositary"), duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate Principal Amount at Maturity of the Rule
144A Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary as hereinafter
provided.
(b) IAI Global Securities. Securities transferred by QIBs to
institutional accredited investors as defined in Rule 501(a)(1), (2) (3) or (7)
under the Securities Act ("Institutional Accredited Investors") shall be issued
in the form of an "IAI Global Security", which shall be deposited with the
Trustee at its Corporate Trust Office, as custodian for the Depositary and
registered in the name of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount at maturity of the IAI Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee as
Depositary as hereinafter provided.
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(c) Global Securities in General. Each Global Security shall
represent such of the outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate Principal Amount at
Maturity of outstanding Securities from time to time endorsed thereon and that
the aggregate Principal Amount at Maturity of outstanding Securities represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges, redemptions and conversions. Except as provided in this
Section 2.01, 2.06 or 2.12, owners of beneficial interests in Global Securities
will not be entitled to receive physical delivery of Certificated Securities.
Any adjustment of the aggregate Principal Amount at Maturity
of a Global Security to reflect the amount of any increase or decrease in the
Principal Amount at Maturity of outstanding Securities represented thereby shall
be made by the Trustee in accordance with instructions given by the Holder
thereof as required by Section 2.12 hereof and shall be made on the records of
the Trustee and the Depositary.
(d) Book-Entry Provisions. This Section 2.01(d) shall apply
only to Global Securities deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.01(d), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary, (b) shall
be delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall bear legends substantially to the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS, IN WHOLE BUT NOT IN PART, TO NOMINEES OF THE
DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN
9
ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF."
(e) Certificated Securities. Securities not issued as
interests in the Global Securities will be issued in certificated form
substantially in the form of Exhibit A-2 attached hereto.
SECTION 2.02. Execution and Authentication.
The Securities shall be executed on behalf of the Company by
any Officer. The signature of the Officer on the Securities may be manual or
facsimile.
Securities bearing the manual or facsimile signatures of an
individual who was at the time of the execution of the Securities the proper
Officer of the Company shall bind the Company, notwithstanding that such
individual has ceased to hold such office prior to the authentication and
delivery of such Securities or did not hold such office at the date of
authentication of such Securities.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein duly executed by the Trustee by manual signature of an authorized officer
of the Trustee, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder.
Subject to the terms of Section 12.04 and 12.05 hereof, the
Trustee shall authenticate and deliver Securities for original issue in an
aggregate Principal Amount at Maturity of up to $639,000,000 (subject to Section
2.07 hereof) upon a Company Order without any further action by the Company. The
aggregate Principal Amount at Maturity of Securities outstanding at any time may
not exceed the amount set forth in the foregoing sentence, except as provided in
Section 2.07.
The Securities shall be issued only in registered form without
coupons and only in denominations of $1,000 of Principal Amount at Maturity and
any integral multiple thereof.
The Trustee shall have the right to decline to authenticate
and deliver any securities under this Section if the Trustee, being advised by
counsel, determines that such action may not be lawfully taken or if the Trustee
in good faith shall determine that such action would expose the Trustee to
personal liability to existing Holders.
SECTION 2.03. Registrar, Paying Agent, Conversion Agent and
Bid Solicitation Agent.
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange for
other Securities ("Registrar"), an office or agency where Securities may be
presented for purchase or payment ("Paying Agent") and an office or agency where
Securities may be presented for conversion into Common Stock ("Conversion
Agent"). The Company shall also appoint a bid solicitation agent (the "Bid
10
Solicitation Agent") to act pursuant to Paragraph 5 of the Securities. The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-registrars, one or more additional
paying agents and one or more additional conversion agents. The term Paying
Agent includes any additional paying agent, including any named pursuant to
Section 4.05. The term Conversion Agent includes any additional conversion
agent, including any named pursuant to Section 4.05.
The Company shall enter into an appropriate agency agreement
with any Registrar or co-registrar, Paying Agent, Conversion Agent or Bid
Solicitation Agent (other than the Trustee). The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar, Paying Agent, Conversion Agent or Bid Solicitation Agent,
the Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07. The Company or any Subsidiary or an Affiliate
of either of them may act as Paying Agent, Registrar, Conversion Agent or
co-registrar. None of the Company or any Subsidiary or any Affiliate of either
of them may act as Bid Solicitation Agent.
The Company initially appoints the Trustee as Registrar,
Conversion Agent, Paying Agent and Bid Solicitation Agent in connection with the
Securities. The Trustee reserves the right to resign its capacity as Bid
Solicitation Agent pursuant to the terms of this Indenture upon not less than
sixty (60) days' notice.
SECTION 2.04. Paying Agent to Hold Money and Securities in
Trust.
Except as otherwise provided herein, by no later than 10:00
a.m., New York City time, on or prior to each due date of payments in respect of
any Security, the Company shall deposit with the Paying Agent a sum of money (in
immediately available funds if deposited on the due date) or Common Stock
sufficient to make such payments when so becoming due. The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Securityholders or the Trustee all
money and Common Stock held by the Paying Agent for the making of payments in
respect of the Securities and shall notify the Trustee of any default by the
Company in making any such payment. At any time during the continuance of any
such default, the Paying Agent shall, upon the written request of the Trustee,
forthwith pay to the Trustee all money and Common Stock so held in trust. If the
Company, a Subsidiary or an Affiliate of either of them acts as Paying Agent, it
shall segregate the money and Common Stock held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
to pay all money and Common Stock held by it to the Trustee and to account for
any funds and Common Stock disbursed by it. Upon doing so, the Paying Agent
shall have no further liability for the money or Common Stock.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders. If the Trustee is not the Registrar, the Company
shall cause to be furnished to the Trustee at least semiannually on November 21
and May 21 a listing of Securityholders dated within 15 days of the date on
which the list is furnished and at such other times as the Trustee may request
in writing a list in such
11
form and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders.
SECTION 2.06. Transfer and Conversion.
Subject to Section 2.12 hereof,
(a) upon surrender for registration of transfer of any
Security, together with a written instrument of transfer satisfactory to the
Registrar duly executed by the Securityholder or such Securityholder's attorney
duly authorized in writing, at the office or agency of the Company designated as
Registrar or co-registrar pursuant to Section 2.03, the Company shall execute,
and the Trustee upon receipt of a Company Order shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more new
Securities of any authorized denomination or denominations, of a like aggregate
Principal Amount at Maturity. The Company shall not charge a service charge for
any registration of transfer or exchange, but the Company may require payment of
a sum sufficient to pay all taxes, assessments or other governmental charges
that may be imposed in connection with the registration of transfer or exchange
of the Securities from the Securityholder requesting such registration of
transfer or exchange.
(b) Notwithstanding any provision to the contrary herein, so
long as a Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.12 and this Section 2.06(b). Transfers of a
Global Security shall be limited to transfers of such Global Security in whole,
or in part, to nominees of the Depositary or to a successor of the Depositary or
such successor's nominee.
(c) Successive registrations and registrations of transfers
and exchanges as aforesaid may be made from time to time as desired, and each
such registration shall be noted on the register for the Securities.
(d) Any Registrar appointed pursuant to Section 2.03 hereof
shall provide to the Trustee such information as the Trustee may reasonably
require in connection with the delivery by such Registrar of Securities upon
registration of transfer or exchange of Securities.
(e) No Registrar shall be required to make registrations of
transfer or exchange of Securities during any periods designated in the text of
the Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
(f) If Securities are issued upon the registration of
transfer, exchange or replacement of Securities subject to restrictions on
transfer and bearing the legends set forth on the form of Security attached
hereto as Exhibits A-1 and A-2 setting forth such restrictions (collectively,
the "Legend"), or if a request is made to remove the Legend on a Security, the
Securities so issued shall bear the Legend, or the Legend shall not be removed,
as the case may be, unless there is delivered to the Company and the Registrar
such satisfactory evidence, which shall include an opinion of counsel, as may be
reasonably required by the Company and the Registrar, that neither the Legend
nor the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144A or Rule 144 under
12
the Securities Act or that such Securities are not "restricted" within the
meaning of Rule 144 under the Securities Act. Upon (i) provision of such
satisfactory evidence, or (ii) notification by the Company to the Trustee and
Registrar of the sale of such Security pursuant to a registration statement that
is effective at the time of such sale, the Trustee, at the written direction of
the Company, shall authenticate and deliver a Security that does not bear the
Legend. If the Legend is removed from the face of a Security and the Security is
subsequently held by an Affiliate of the Company, the Company shall use its
reasonable best efforts to reinstate the Legend.
The Trustee and the Registrar shall have no obligation or duty
to monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers between or
among Depositary participants or beneficial owners of interests in any Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by the terms of, this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
SECTION 2.07. Replacement Securities.
(a) If (i) any mutilated Security is surrendered to the
Trustee, or (ii) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a
protected purchaser within the meaning of Article 8 of the Uniform Commercial
Code as in effect from time to time in the State of New York (a "Protected
Purchaser"), the Company shall execute and upon its written request the Trustee
shall authenticate and deliver, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and Principal Amount at Maturity, bearing a number not contemporaneously
outstanding.
(b) In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, or is about to be
purchased by the Company pursuant to Article 3 hereof, the Company in its
discretion may, instead of issuing a new Security, pay or purchase such
Security, as the case may be.
(c) Upon the issuance of any new Securities under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
(d) Every new Security issued pursuant to this Section in lieu
of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
13
(e) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.08. Outstanding Securities; Determinations of
Holders' Action.
(a) Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those paid
pursuant to Section 2.07 and delivered to it for cancellation and those
described in this Section 2.08 as not outstanding. A Security does not cease to
be outstanding because the Company or an Affiliate thereof holds the Security;
provided, however, that in determining whether the Holders of the requisite
Principal Amount at Maturity of Securities have given or concurred in any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and deemed
not to be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which a Responsible Officer of the
Trustee actually knows to be so owned shall be so disregarded. Subject to the
foregoing, only Securities outstanding at the time of such determination shall
be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).
(b) If a Security is replaced pursuant to Section 2.07, the
replaced Security ceases to be outstanding unless the Trustee and the Company
receive proof satisfactory to each of them that the replaced Security is held by
a Protected Purchaser.
(c) If the Paying Agent holds, in accordance with this
Indenture, on a Redemption Date, or on the Business Day following the Purchase
Date or a Change in Control Purchase Date, or on Stated Maturity, money or
securities, if permitted hereunder, sufficient to pay Securities payable on that
date, then immediately after such Redemption Date, Purchase Date, Change in
Control Purchase Date or Stated Maturity, as the case may be, such Securities
shall cease to be outstanding and Original Issue Discount and interest
(including contingent interest), if any, on such Securities shall cease to
accrue whether or not the Security is delivered to the Paying Agent; provided,
that if such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture.
(d) If a Security is converted in accordance with Article 10,
then from and after the time of conversion on the Conversion Date, such Security
shall cease to be outstanding and Original Issue Discount and interest
(including contingent interest), if any, shall cease to accrue on such Security.
SECTION 2.09. Temporary Securities.
(a) Pending the preparation of definitive Securities, the
Company may execute, and the Trustee upon receipt of a Company Order shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
14
other variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
(b) If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 2.03, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute
and the Trustee upon receipt of a Company Order shall authenticate and deliver
in exchange therefor a like Principal Amount at Maturity of definitive
Securities of authorized denominations. Until so exchanged the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.
SECTION 2.10. Cancellation.
All Securities surrendered for payment, purchase by the
Company pursuant to Article 3, conversion, redemption or registration of
transfer or exchange shall, if surrendered to any person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. The Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation or
that any Holder has converted pursuant to Article 10. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of by the Trustee in accordance
with the Trustee's customary procedure.
SECTION 2.11. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of the Security
or the payment of any Redemption Price, Purchase Price or Change in Control
Purchase Price in respect thereof, and interest (including contingent interest,
if any) thereon, for the purpose of conversion and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 2.12. Global Securities.
(a) Notwithstanding any other provisions of this Indenture or
the Securities, (A) transfers of a Global Security, in whole or in part, shall
be made only in accordance with Section 2.06 and
15
Section 2.12(a)(i), (B) transfer of a beneficial interest in a Rule 144A Global
Security for a beneficial interest in an IAI Global Security shall comply with
Section 2.06 and Section 2.12(a)(ii) below, and (C) transfers of beneficial
interests in an IAI Global Security shall comply with Section 2.06 and Section
2.12(a)(iii) and (iv) below.
(i) TRANSFER OF GLOBAL SECURITY. A Global Security may
not be transferred, in whole or in part, to any
Person other than the Depositary or a nominee or any
successor thereof, and no such transfer to any such
other Person may be registered; provided that this
clause (i) shall not prohibit any transfer of a
Security that is issued in exchange for a Global
Security but is not itself a Global Security. No
transfer of a Security to any Person shall be
effective under this Indenture or the Securities
unless and until such Security has been registered in
the name of such Person. Nothing in this Section
2.12(a)(i) shall prohibit or render ineffective any
transfer of a beneficial interest in a Global
Security effected in accordance with the other
provisions of this Section 2.12(a).
(ii) RESTRICTIONS ON TRANSFER OF A BENEFICIAL INTEREST IN
A RULE 144A GLOBAL SECURITY FOR A BENEFICIAL INTEREST
IN AN IAI GLOBAL SECURITY. A beneficial interest in a
Rule 144A Global Security may not be exchanged for a
beneficial interest in an IAI Global Security except
upon satisfaction of the requirements set forth
below. Upon receipt by the Trustee of a request for
transfer of a beneficial interest in a Rule 144A
Global Security in accordance with Applicable
Procedures for a beneficial interest in an IAI Global
Security in the form satisfactory to the Trustee,
together with:
(a) so long as the Securities are Restricted
Securities, certification, in the form set
forth in Exhibit B-1, and, if requested by
the Company or the Registrar, certification
in the form set forth in Exhibit B-2, that
such beneficial interest in the Rule 144A
Global Security is being transferred to an
Institutional Accredited Investor in
accordance with subparagraphs (a)(1), (2),
(3) or (7) of Rule 501 under the Securities
Act;
(b) written instructions to the Trustee to make
an adjustment on its books and records with
respect to such Rule 144A Global Security to
reflect a decrease in the aggregate
Principal Amount at Maturity of the
Securities represented by the Rule 144A
Global Security, and a corresponding
adjustment on such books and records to
reflect a corresponding increase in the
aggregate Principal Amount at Maturity of
the Securities represented by the IAI Global
Security, such instructions to contain
information regarding the Depositary
accounts to be credited with such decrease
and increase, respectively; and
(c) if the Company or Trustee so requests, an
opinion of counsel or other evidence
reasonably satisfactory to them as to the
compliance with the restrictions set forth
in the Legend,
16
then the Trustee shall (y) debit or cause to be debited from
the account of the Person who has transferred their beneficial
interest in such Rule 144A Global Security a beneficial
interest in the Rule 144A Global Security equal to the
Principal Amount at Maturity of the increase in the beneficial
interest in the IAI Global Security and (z) shall credit or
cause to be credited to the account of the Person who is the
transferee of such beneficial interest a corresponding
beneficial interest in the IAI Global Security.
(iii) TRANSFER OF BENEFICIAL INTERESTS IN IAI GLOBAL
SECURITIES. Upon a request to the Trustee to transfer
a beneficial interest in an IAI Global Security other
than into an interest in a Rule 144A Global Security,
such transfer may only be effected if such transfer
is pursuant to an effective registration statement
under the Securities Act or pursuant to clause (A) or
(B) below, and, upon request by the Company or the
Trustee, are accompanied by the following additional
information and documents, as applicable:
(A) if such beneficial interests are being
transferred to the Company, a certification
to that effect; or
(B) if such beneficial interests are being
transferred pursuant to an exemption from
registration (i) a certification to that
effect (in the form set forth in Exhibit B-1
and B-2, if applicable) and (ii) if the
Company or Trustee so request, an opinion of
counsel or other evidence reasonably
satisfactory to them as to the compliance
with the restrictions set forth in the
Legend.
(iv) RESTRICTIONS ON TRANSFER OF A BENEFICIAL INTEREST IN
AN IAI GLOBAL SECURITY FOR A BENEFICIAL INTEREST IN A
RULE 144A GLOBAL SECURITY. A beneficial interest in
an IAI Global Security may not be exchanged for a
beneficial interest in a Rule 144A Global Security
except upon satisfaction of the requirements set
forth below.
Upon request to the Trustee for transfer of a
beneficial interest in an IAI Global Security for a
beneficial interest in a Rule 144A Global, together
with, if required by the Trustee:
(a) so long as the Securities are Restricted
Securities, certification, in the form set
forth in Exhibit B-1, that such beneficial
interest in an IAI Global Security is being
transferred to a QIB in accordance with Rule
144A; and
(b) written instructions directing the Trustee
to make an adjustment on its books and
records with respect to such Rule 144A
Global Security to reflect an increase in
the aggregate Principal Amount at Maturity
of the Securities represented by the Rule
144A Global Security, and a corresponding
adjustment on such books and
17
records to reflect a corresponding decrease
in the aggregate Principal Amount at
Maturity of the Securities represented by
the IAI Global Security, such instructions
to contain information regarding the
Depositary accounts to be credited with such
increase and decrease, respectively,
then the Trustee shall (y) credit or cause to be credited to
the account of the Person who has transferred their beneficial
interest in such IAI Global Security a beneficial interest in
the Rule 144A Global Security equal to the Principal Amount at
Maturity of the beneficial interest in the IAI Global Security
so transferred and (z) shall debit or cause to be debited from
the account of the Person who is the transferee of such
beneficial interest a corresponding beneficial interest in the
IAI Global Security so transferred. If no Global Securities
are then outstanding, the Company shall issue and the Trustee
upon receipt of a Company Order shall authenticate a new
Global Security in the appropriate Principal Amount at
Maturity.
(b) Subject to the succeeding paragraph, every Security shall
be subject to the restrictions on transfer provided in the Legend including the
delivery of an Opinion of Counsel, if so provided. Whenever any Restricted
Security is presented or surrendered for registration of transfer or for
exchange for a Security registered in a name other than that of the Holder, such
Security must be accompanied by a certificate in substantially the form set
forth in Exhibit B-1, dated the date of such surrender and signed by the Holder
of such Security, as to compliance with such restrictions on transfer. The
Registrar shall not be required to accept for such registration of transfer or
exchange any Security not so accompanied by a properly completed certificate.
(c) The restrictions imposed by the Legend upon the
transferability of any Security shall cease and terminate when such Security has
been sold pursuant to an effective registration statement under the Securities
Act or transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or, if earlier, upon the expiration of the holding
period applicable to sales thereof under Rule 144(k) under the Securities Act
(or any successor provision). Any Security as to which such restrictions on
transfer shall have expired in accordance with their terms or shall have
terminated may, upon a surrender of such Security for exchange to the Registrar
in accordance with the provisions of this Section 2.12 (accompanied, in the
event that such restrictions on transfer have terminated by reason of a transfer
in compliance with Rule 144 or any successor provision, by an opinion of counsel
having substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company, the Trustee and
the Registrar and in form acceptable to the Company, to the effect that the
transfer of such Security has been made in compliance with Rule 144 or such
successor provision), be exchanged for a new Security, of like tenor and
aggregate Principal Amount at Maturity, which shall not bear the restrictive
Legend. The Company shall inform the Trustee of the effective date of any
registration statement registering the Securities under the Securities Act. The
Trustee and the Registrar shall not be liable for any action taken or omitted to
be taken by it in good faith in accordance with the aforementioned Opinion of
Counsel or registration statement.
18
(d) As used in the preceding two paragraphs of this Section
2.12, the term "transfer" encompasses any sale, pledge, transfer, hypothecation
or other disposition of any Security.
(e) The provisions of clauses (1), (2), (3) and (4) below
shall apply only to Global Securities:
(1) Notwithstanding any other provisions of this Indenture or
the Securities, except as provided in Section 2.12(a)(ii), a
Global Security shall not be exchanged in whole or in part for
a Security registered in the name of any Person other than the
Depositary or one or more nominees thereof, provided that a
Global Security may be exchanged for Securities registered in
the names of any person designated by the Depositary in the
event that (i) the Depositary has notified the Company that it
is unwilling or unable to continue as Depositary for such
Global Security or such Depositary has ceased to be a
"clearing agency" registered under the Exchange Act, and a
successor Depositary is not appointed by the Company within 90
days, (ii) the Company decides to discontinue use of the
system of book-entry transfer through DTC (or any successor
depositary); or (iii) an Event of Default has occurred and is
continuing with respect to the Securities. Any Global Security
exchanged pursuant to clause (i) or (ii) above shall be so
exchanged in whole and not in part, and any Global Security
exchanged pursuant to clause (iii) above may be exchanged in
whole or from time to time in part as directed by the
Depositary. Any Security issued in exchange for a Global
Security or any portion thereof shall be a Global Security;
provided that any such Security so issued that is registered
in the name of a Person other than the Depositary or a nominee
thereof shall not be a Global Security.
(2) Securities issued in exchange for a Global Security or any
portion thereof shall be issued in definitive, fully
registered form, without interest coupons, shall have an
aggregate Principal Amount at Maturity equal to that of such
Global Security or portion thereof to be so exchanged, shall
be registered in such names and be in such authorized
denominations as the Depositary shall designate and shall bear
the applicable legends provided for herein. Any Global
Security to be exchanged in whole shall be surrendered by the
Depositary to the Trustee, as Registrar. With regard to any
Global Security to be exchanged in part, either such Global
Security shall be so surrendered for exchange or, if the
Trustee is acting as custodian for the Depositary or its
nominee with respect to such Global Security, the Principal
Amount at Maturity thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by means of
an appropriate
19
adjustment made on the records of the Trustee. Upon any such
surrender or adjustment, the Trustee shall authenticate and
deliver the Security issuable on such exchange to or upon the
order of the Depositary or an authorized representative
thereof.
(3) Subject to the provisions of clause (5) below, the
registered Holder may grant proxies and otherwise authorize
any Person, including Agent Members (as defined below) and
persons that may hold interests through Agent Members, to take
any action which a holder is entitled to take under this
Indenture or the Securities.
(4) In the event of the occurrence of any of the events
specified in clause (1) above, the Company will promptly make
available to the Trustee a reasonable supply of Certificated
Securities in definitive, fully registered form, without
interest coupons.
(5) Neither any members of, or participants in, the Depositary
(collectively, the "Agent Members") nor any other Persons on
whose behalf Agent Members may act shall have any rights under
this Indenture with respect to any Global Security registered
in the name of the Depositary or any nominee thereof, or under
any such Global Security, and the Depositary or such nominee,
as the case may be, may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute
owner and holder of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the
Depositary or such nominee, as the case may be, or impair, as
between the Depositary, its Agent Members and any other person
on whose behalf an Agent Member may act, the operation of
customary practices of such Persons governing the exercise of
the rights of a holder of any Security.
SECTION 2.13. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
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ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01. Right to Redeem; Notices to Trustee.
The Company, at its option, may redeem the Securities in
accordance with the provisions of paragraphs 6 and 8 of the Securities. If the
Company elects to redeem Securities pursuant to paragraph 6 of the Securities,
it shall notify the Trustee in writing of the Redemption Date, the Principal
Amount at Maturity of Securities to be redeemed, the CUSIP number of Securities
to be redeemed, the Redemption Price and the amount of contingent interest, if
any, payable on the Redemption Date.
The Company shall give the notice to the Trustee provided for
in this Section 3.01 by a Company Order, at least 30 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee).
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the
Trustee shall select the Securities to be redeemed pro rata or by lot or by any
other method selected by the Trustee in its sole discretion (so long as such
method is not prohibited by the rules of any stock exchange on which the
Securities are then listed). The Trustee shall make the selection at least 30
days but not more than 60 days before the Redemption Date from outstanding
Securities not previously called for redemption.
Securities and portions of them the Trustee selects shall be
in Principal Amounts at Maturity of $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.
If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed may be
treated by the Trustee as outstanding for the purpose of such selection.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the Redemption Date;
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(2) the Redemption Price and, to the extent known at the time
of such notice, the amount of contingent interest, if any,
payable on the Redemption Date;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion
Agent;
(5) that Securities called for redemption may be converted at
any time before the close of business on the second Business
Day immediately preceding the Redemption Date;
(6) that Holders who want to convert Securities must satisfy
the requirements set forth in paragraph 9 of the Securities;
(7) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price and
contingent interest, if any; (8) if fewer than all the
outstanding Securities are to be redeemed, the certificate
number and Principal Amounts at Maturity of the particular
Securities to be redeemed;
(9) that, unless the Company defaults in making payment of
such Redemption Price and contingent interest, if any,
Original Issue Discount and contingent interest, if any, on
Securities called for redemption will cease to accrue on and
after the Redemption Date and the Securities will cease to be
convertible; and
(10) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense, provided that the
Company makes such request at least five Business Days (unless a shorter period
shall be satisfactory to the Trustee) prior to the date such notice of
redemption must be mailed.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is given, Securities called for
redemption become due and payable on the Redemption Date and at the Redemption
Price (together with accrued contingent interest, if any, to but not including
the date of redemption) stated in the notice except for Securities which are
converted in accordance with the terms of this Indenture. Upon surrender to the
Paying Agent, such Securities shall be paid at the Redemption Price (together
with accrued contingent interest, if any, to but not including the date of
redemption) stated in the notice.
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SECTION 3.05. Deposit of Redemption Price.
Prior to 10:00 a.m. (New York City time) on any Redemption
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of either of them is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the Redemption Price of,
and any accrued and unpaid contingent interest to but not including the date of
redemption with respect to, all Securities to be redeemed on that date other
than Securities or portions of Securities called for redemption which on or
prior thereto have been delivered by the Company to the Trustee for cancellation
or have been converted. The Paying Agent shall as promptly as practicable return
to the Company any money, not required for that purpose because of conversion of
Securities pursuant to Article 10. If such money is then held by the Company in
trust and is not required for such purpose it shall be discharged from such
trust.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder a new Security in an authorized denomination equal in Principal Amount at
Maturity to the unredeemed portion of the Security surrendered.
SECTION 3.07. Conversion Arrangement on Call for Redemption.
In connection with any redemption of Securities, the Company
may arrange for the purchase and conversion of any Securities called for
redemption by an agreement with one or more investment banks or other purchasers
to purchase such Securities by paying to the Trustee in trust for the
Securityholders, on or prior to 10:00 a.m. New York City time on the Redemption
Date, an amount that, together with any amounts deposited with the Trustee by
the Company for the redemption of such Securities, is not less than the
Redemption Price of, and any accrued and unpaid contingent interest with respect
to, such Securities. Notwithstanding anything to the contrary contained in this
Article 3, the obligation of the Company to pay the Redemption Prices of such
Securities shall be deemed to be satisfied and discharged to the extent such
amount is so paid by such purchasers. If such an agreement is entered into, any
Securities not duly surrendered for conversion by the Holders thereof may, at
the option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such Holders and (notwithstanding anything to
the contrary contained in Article 10) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the Business
Day prior to the Redemption Date, subject to payment of the above amount as
aforesaid. The Trustee shall hold and pay to the Holders whose Securities are
selected for redemption any such amount paid to it for purchase and conversion
in the same manner as it would moneys deposited with it by the Company for the
redemption of Securities. Without the Trustee's prior written consent, no
arrangement between the Company and such purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the
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exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
SECTION 3.08. Purchase of Securities at Option of the Holder.
(a) General. Securities shall be purchased by the Company
pursuant to paragraph 7 of the Securities at the option of the Holder thereof,
upon:
(1) delivery to the Paying Agent by the Holder of a written
notice of purchase (a "Purchase Notice") at any time from the opening
of business on the date that is 20 Business Days prior to a Purchase
Date until the close of business on the Business Day immediately
preceding such Purchase Date stating:
(A) the certificate number of the Security which the
Holder will deliver to be purchased,
(B) the portion of the Principal Amount at Maturity
of the Security which the Holder will deliver to be purchased,
which portion must be a Principal Amount at Maturity of $1,000
or an integral multiple thereof,
(C) that such Security shall be purchased as of the
Purchase Date pursuant to the terms and conditions specified
in paragraph 7 of the Securities and in this Indenture, and
(D) in the event the Company elects, pursuant to
Section 3.08(b), to pay the Purchase Price to be paid as of
such Purchase Date, in whole or in part, in shares of Common
Stock but such portion of the Purchase Price shall ultimately
be payable to such Holder entirely in cash because any of the
conditions to payment of the Purchase Price in Common Stock is
not satisfied prior to the close of business on such Purchase
Date, as set forth in Section 3.08(d), whether such Holder
elects (i) to withdraw such Purchase Notice as to some or all
of the Securities to which such Purchase Notice relates
(stating the Principal Amount at Maturity and certificate
numbers of the Securities as to which such withdrawal shall
relate), or (ii) to receive cash in respect of the entire
Purchase Price for all Securities (or portions thereof) to
which such Purchase Notice relates; and
(2) delivery of such Security to the Paying Agent prior to, on
or after the Purchase Date (together with all necessary endorsements)
at the offices of the Paying Agent, such delivery being a condition to
receipt by the Holder of the Purchase Price therefor; provided,
however, that such Purchase Price shall be so paid pursuant to this
Section 3.08 only if the Security so delivered to the Paying Agent
shall conform in all respects to the description thereof in the related
Purchase Notice, as determined by the Company.
If a Holder, in such Holder's Purchase Notice and in any
written notice of withdrawal delivered by such Holder pursuant to the terms of
Section 3.10, fails to indicate such Holder's choice with respect to the
election set forth in clause (D) of Section 3.08(a)(1), such
24
Holder shall be deemed to have elected to receive cash in respect of the
Purchase Price for all Securities subject to such Purchase Notice in the
circumstances set forth in such clause (D).
The Company shall purchase from the Holder thereof, pursuant
to this Section 3.08, a portion of a Security if the Principal Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. Provisions
of this Indenture that apply to the purchase of all of a Security also apply to
the purchase of such portion of such Security.
Any purchase by the Company contemplated pursuant to the
provisions of this Section 3.08 shall be consummated by the delivery of the
consideration to be received by the Holder (including accrued and unpaid
contingent interest, if any) promptly following the later of the Purchase Date
and the time of delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Purchase Notice contemplated by this Section
3.08(a) shall have the right to withdraw such Purchase Notice at any time prior
to the close of business on the Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the
receipt by it of any Purchase Notice or written notice of withdrawal thereof.
(b) Company's Right to Elect Manner of Payment of Purchase
Price. The Securities to be purchased pursuant to Section 3.08(a) may be paid
for, at the election of the Company, in U.S. legal tender ("cash") or Common
Stock, or in any combination of cash and Common Stock, subject to the conditions
set forth in Sections 3.08(c) and (d). The Company shall designate, in the
Company Notice delivered pursuant to Section 3.08(e), whether the Company will
purchase the Securities for cash or Common Stock, or, if a combination thereof,
the percentages of the Purchase Price of Securities in respect of which it will
pay in cash or Common Stock; provided that the Company will pay cash for
fractional interests in Common Stock. For purposes of determining the existence
of potential fractional interests, all Securities subject to purchase by the
Company held by a Holder shall be considered together (no matter how many
separate certificates are to be presented). Each Holder whose Securities are
purchased pursuant to this Section 3.08 shall receive the same percentage of
cash or Common Stock in payment of the Purchase Price for such Securities,
except (i) as provided in Section 3.08(d) with regard to the payment of cash in
lieu of fractional shares of Common Stock and (ii) in the event that the Company
is unable to purchase the Securities of a Holder or Holders for Common Stock
because any necessary qualifications or registrations of the Common Stock under
applicable state securities laws cannot be obtained, the Company may purchase
the Securities of such Holder or Holders for cash. The Company may not change
its election with respect to the consideration (or components or percentages of
components thereof) to be paid once the Company has given its Company Notice to
Securityholders except pursuant to this Section 3.08(b) or pursuant to Section
3.08(d) in the event of a failure to satisfy, prior to the close of business on
the Purchase Date, any condition to the payment of the Purchase Price, in whole
or in part, in Common Stock.
At least three Business Days before the Company Notice Date,
the Company shall deliver an Officers' Certificate to the Trustee specifying:
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(i) the manner of payment selected by the Company,
(ii) the information required by Section 3.08(e),
(iii) if the Company elects to pay the Purchase
Price, or a specified percentage thereof, in Common Stock,
that the conditions to such manner of payment set forth in
Section 3.08(d) have been or will be complied with, and
(iv) whether the Company desires the Trustee to give
the Company Notice required by Section 3.08(e).
(c) Purchase with Cash. On each Purchase Date, at the option
of the Company, the Purchase Price of Securities in respect of which a Purchase
Notice pursuant to Section 3.08(a) has been given, or a specified percentage
thereof, may be paid by the Company with cash equal to the aggregate Purchase
Price of such Securities. If the Company elects to purchase Securities with
cash, the Company Notice, as provided in Section 3.08(e), shall be sent to
Holders (and to beneficial owners as required by applicable law) not less than
20 Business Days prior to such Purchase Date (the "Company Notice Date").
(d) Payment by Issuance of Common Stock. On each Purchase
Date, at the option of the Company, the Purchase Price of Securities in respect
of which a Purchase Notice pursuant to Section 3.08(a) has been given, or a
specified percentage thereof, may be paid by the Company by the issuance of a
number of shares of Common Stock equal to the quotient obtained by dividing (i)
the amount of cash to which the Securityholders would have been entitled had the
Company elected to pay all or such specified percentage, as the case may be, of
the Purchase Price of such Securities in cash by (ii) the Market Price of a
share of Common Stock, subject to the next succeeding paragraph.
The Company will not issue a fractional share of Common Stock
in payment of the Purchase Price. Instead the Company will pay cash for the
current market value of the fractional share. The current market value of a
fraction of a share shall be determined by multiplying the Market Price by such
fraction and rounding the product to the nearest whole cent. It is understood
that if a Holder elects to have more than one Security purchased, the number of
shares of Common Stock shall be based on the aggregate amount of Securities to
be purchased.
If the Company elects to purchase the Securities by the
issuance of shares of Common Stock, the Company Notice, as provided in Section
3.08(e), shall be sent to the Holders (and to beneficial owners as required by
applicable law) not later than the Company Notice Date.
The Company's right to exercise its election to purchase the
Securities pursuant to Section 3.08 through the issuance of shares of Common
Stock shall be conditioned upon:
(i) the Company's not having given its Company Notice
of an election to pay entirely in cash and its giving of
timely Company Notice of election to purchase all or a
specified percentage of the Securities with Common Stock as
provided herein;
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(ii) the shares of Common Stock having been admitted
for listing or admitted for listing subject to notice of
issuance on the principal United States securities exchange on
which the Common Stock is then listed or causing such shares
of Common Stock to be quoted on the Nasdaq National Market
System if not so quoted;
(iii) the registration of the shares of Common Stock
to be issued in respect of the payment of the Purchase Price
under the Securities Act of 1933, as amended (the "Securities
Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), in each case, if required;
(iv) any necessary qualification or registration
under applicable state securities laws or the availability of
an exemption from such qualification and registration; and
(v) the receipt by the Trustee of an Officers'
Certificate and an Opinion of Counsel each stating that (A)
the terms of the issuance of the Common Stock are in
conformity with this Indenture and (B) the shares of Common
Stock to be issued by the Company in payment of the Purchase
Price in respect of Securities have been duly authorized and,
when issued and delivered pursuant to the terms of this
Indenture in payment of the Purchase Price in respect of the
Securities, will be validly issued, fully paid and
non-assessable and, to the best of such counsel's knowledge,
free from preemptive rights, and, in the case of such
Officers' Certificate, stating that conditions (i), (ii),
(iii) and (iv) above and the condition set forth in the second
succeeding sentence have been satisfied and, in the case of
such Opinion of Counsel, stating that conditions (ii), (iii)
and (iv) above have been satisfied.
Such Officers' Certificate shall also set forth the number of
shares of Common Stock to be issued for each $1,000 Principal Amount at Maturity
of Securities and the Sale Price of a share of Common Stock on each Trading Day
during the period for which the Market Price is calculated. The Company may pay
the Purchase Price (or any portion thereof) in Common Stock only if the
information necessary to calculate the Market Price is published in a daily
newspaper of national circulation. If the foregoing conditions are not satisfied
with respect to a Holder or Holders prior to the close of business on the
Purchase Date and the Company has elected to purchase the Securities pursuant to
this Section 3.08 through the issuance of shares of Common Stock, the Company
shall pay the entire Purchase Price of the Securities of such Holder or Holders
in cash.
The "Market Price" means the average of the Sale Prices of the
Common Stock for the five Trading Day period ending on the third Business Day
prior to the applicable Purchase Date (if the third Business Day prior to the
applicable Purchase Date is a Trading Day, otherwise the Five Trading Day period
shall end on the last Trading Day prior to such third Business Day),
appropriately adjusted to take into account the occurrence, during the period
commencing on the first of such Trading Days during such five Trading Day period
and ending on such Purchase Date, of any event described in Section 10.06, 10.07
or 10.08; subject, however, to the conditions set forth in Sections 10.09 and
10.10.
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The "Sale Price" of the Common Stock on any date means the
closing per share sale price (or, if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and average ask prices) on such date as reported in
composite transactions on the New York Stock Exchange or such other principal
United States securities exchange on which the Common Stock is traded or, if the
Common Stock is not listed on a United States national or regional securities
exchange, (i) as reported by the National Association of Securities Dealers
Automated Quotation System or by the National Quotation Bureau Incorporated, or
(ii) if such bid and ask prices are not reported by the National Association of
Securities Dealers Automated Quotation System or by the National Quotation
Bureau Incorporated, in a manner to be determined by the Company on the basis of
such quotation as the Company considers appropriate in its sole and absolute
discretion.
(e) Notice of Election. The Company's notice of election to
purchase with cash or Common Stock or any combination thereof shall be sent to
the Holders (and to beneficial owners as required by applicable law) in the
manner provided in Section 12.02 at the time specified in Section 3.08(c) or
(d), as applicable (the "Company Notice"). Such Company Notice shall state the
manner of payment elected and shall contain the following information: In the
event the Company has elected to pay the Purchase Price (or a specified
percentage thereof) with Common Stock, the Company Notice shall:
(1) state that each Holder will receive Common Stock
with a Market Price determined as of a specified date prior to
the Purchase Date equal to such specified percentage of the
Purchase Price of the Securities held by such Holder (except
any cash amount to be paid in lieu of fractional shares);
(2) set forth the method of calculating the Market
Price of the Common Stock; and
(3) state that because the Market Price of Common
Stock will be determined prior to the Purchase Date, Holders
will bear the market risk with respect to the value of the
Common Stock to be received from the date such Market Price is
determined to the Purchase Date.
In any case, each Company Notice shall include a form of
Purchase Notice to be completed by a Securityholder and shall state:
(i) the Purchase Price, the Conversion Rate and, to
the extent known at the time of such notice, the amount of
contingent interest, if any, that will be accrued and payable
with respect to the Securities as of the Purchase Date;
(ii) the name and address of the Paying Agent and the
Conversion Agent;
(iii) that Securities as to which a Purchase Notice
has been given may be converted pursuant to Article 10 hereof
only if the applicable Purchase Notice has been withdrawn in
accordance with the terms of this Indenture;
28
(iv) that Securities must be surrendered to the
Paying Agent to collect payment of the Purchase Price and
contingent interest, if any;
(v) that the Purchase Price for any Security as to
which a Purchase Notice has been given and not withdrawn,
together with any accrued contingent interest payable with
respect thereto, will be paid promptly following the later of
the Purchase Date and the time of surrender of such Security
as described in (iv);
(vi) the procedures the Holder must follow to
exercise rights under Section 3.08 and a brief description of
those rights;
(vii) briefly, the conversion rights of the
Securities;
(viii) the procedures for withdrawing a Purchase
Notice (including, without limitation, for a conditional
withdrawal pursuant to the terms of Section 3.08(a)(1)(D) or
Section 3.10);
(ix) that, unless the Company defaults in making
payment of such Purchase Price and contingent interest, if
any, Original Issue Discount and contingent interest, if any,
on Securities surrendered for purchase will cease to accrue on
and after the Purchase Date; and
(x) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give such Company
Notice in the Company's name and at the Company's expense; provided, however,
that, in all cases, the text of such Company Notice shall be prepared by the
Company.
Upon determination of the actual number of shares of Common
Stock to be delivered for each $1,000 Principal Amount at Maturity of
Securities, the Company will issue a press release and publish such
determination on the Company's web site on the World Wide Web or through such
other public medium as the Company may use at that time.
(f) Covenants of the Company. All shares of Common Stock
delivered upon purchase of the Securities shall be newly issued shares or
treasury shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any lien or
adverse claim.
(g) Procedure upon Purchase. The Company shall deposit cash
(in respect of a cash purchase under Section 3.08(c) or for fractional interests
or contingent interest, as applicable) or shares of Common Stock, or a
combination thereof, as applicable, at the time and in the manner as provided in
Section 3.11, sufficient to pay the aggregate Purchase Price of, and any accrued
and unpaid contingent interest with respect to, all Securities to be purchased
pursuant to this Section 3.08. As soon as practicable after the Purchase Date,
the Company shall deliver to each Holder entitled to receive Common Stock
through the Paying Agent, a certificate for the number of full shares of Common
Stock issuable in payment of the Purchase Price and cash in lieu of any
fractional interests. The person in whose name the certificate for Common Stock
is registered shall be treated as a holder of record of shares of Common Stock
on the
29
Business Day following the Purchase Date. No payment or adjustment will be made
for dividends on the Common Stock the record date for which occurred on or prior
to the Purchase Date.
(h) Taxes. If a Holder of a Security is paid in Common Stock,
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on such issue of shares of Common Stock. However, the Holder shall pay any
such tax which is due because the Holder requests the shares of Common Stock to
be issued in a name other than the Holder's name. The Paying Agent may refuse to
deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Paying Agent receives a sum sufficient to
pay any tax which will be due because the shares of Common Stock are to be
issued in a name other than the Holder's name. Nothing herein shall preclude any
income tax withholding required by law or regulations.
SECTION 3.09. Purchase of Securities at Option of the Holder
upon Change in Control.
(a) If on or prior to the date specified in paragraph 7 of the
Securities, there shall have occurred a Change in Control, Securities shall be
purchased by the Company, at the option of the Holder thereof, at a purchase
price specified in paragraph 7 of the Securities (the "Change in Control
Purchase Price"), as of the date that is no later than 35 Business Days after
the occurrence of the Change in Control but in no event prior to the date on
which such Change in Control occurs (the "Change in Control Purchase Date"),
subject to satisfaction by or on behalf of the Holder of the requirements set
forth in Section 3.09(c).
A "Change in Control" shall be deemed to have occurred at such
time as either of the following events shall occur:
(1) any person, including its respective Affiliates and
associates, other than the Company, its Subsidiaries or any
employee benefits plan of the Company or its Subsidiaries,
files a Schedule 13D or Schedule TO (or any successor
schedule, form or report) pursuant to the Exchange Act,
disclosing that such person has become the beneficial owner of
50% or more of the voting power of the Common Stock then
outstanding or other capital stock into which the Common Stock
is reclassified or changed; provided, however, that a person
shall not be deemed beneficial owner of, or to own
beneficially, (A) any securities tendered pursuant to a tender
or exchange offer made by or on behalf of such person or any
of such person's Affiliates until such tendered securities are
accepted for purchase or exchange thereunder, or (B) any
securities if such beneficial ownership (1) arises solely as a
result of a revocable proxy delivered in response to a proxy
or consent solicitation made pursuant to the applicable rules
and regulations under the Exchange Act, and (2) is not also
then reportable on Schedule 13D (or any successor schedule)
under the Exchange Act; or
(2) the Company consolidates with or merges with or into
another person, or sells, conveys, transfers or leases all or
substantially all of its properties and assets to any person
or any person consolidates with or merges with or into the
30
Company, and the outstanding Voting Stock of the Company is
reclassified into, converted for or converted into the right
to receive any cash, securities or other property, provided
that none of these circumstances will be a change in control
if the persons that beneficially own the Voting Stock of the
Company immediately prior to the transaction own, directly or
indirectly, shares with a majority of the total voting power
of all outstanding Voting Stock of the surviving or transferee
person that are entitled to vote generally in the election of
that person's board of directors, managers or trustees
immediately after the transaction.
For purposes of defining a change in control:
(x) the term "person" and the term "group" have the meanings
given by Section 13(d) and 14(d) of the Exchange Act or any
successor provisions;
(y) the term "group" includes any group acting for the purpose
of acquiring, holding or disposing of securities within the
meaning of Rule 13d-5(b)(1) under the Exchange Act or any
successor provision; and
(z) the term "beneficial owner" is determined in accordance
with Rules 13d-3 and 13d-5 under the Exchange Act or any
successor provisions, except that a person will be deemed to
have beneficial ownership of all shares that person has the
right to acquire irrespective of whether that right is
exercisable immediately or only after the passage of time.
(b) Within 15 Business Days after the occurrence of a Change
in Control, the Company shall mail a written notice of Change in Control by
first-class mail to the Trustee and to each Holder (and to beneficial owners as
required by applicable law). The notice shall include a form of Change in
Control Purchase Notice to be completed by the Securityholder and shall state:
(1) briefly, the events causing a Change in Control and the
date of such Change in Control;
(2) the date by which the Change in Control Purchase Notice
pursuant to this Section 3.09 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price and, to the extent
known at the time of such notice, the amount of contingent
interest, if any, that will be accrued and payable with
respect to the Securities as of the Change in Control Purchase
Date;
(5) the name and address of the Paying Agent and the
Conversion Agent;
(6) the Conversion Rate and any adjustments thereto;
(7) that Securities as to which a Change in Control Purchase
Notice has been given may be converted pursuant to Article 10
hereof only if the Change in
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Control Purchase Notice has been withdrawn in accordance with
the terms of this Indenture;
(8) that Securities must be surrendered to the Paying Agent to
collect payment of the Change in Control Purchase Price and
contingent interest, if any;
(9) that the Change in Control Purchase Price for any Security
as to which a Change in Control Purchase Notice has been duly
given and not withdrawn, together with any accrued contingent
interest payable with respect thereto, will be paid promptly
following the later of the Change in Control Purchase Date and
the time of surrender of such Security as described in (8);
(10) briefly, the procedures the Holder must follow to
exercise rights under this Section 3.09;
(11) briefly, the conversion rights of the Securities;
(12) the procedures for withdrawing a Change in Control
Purchase Notice;
(13) that, unless the Company defaults in making payment of
such Change in Control Purchase Price and contingent interest,
if any, Original Issue Discount and contingent interest, if
any, on Securities surrendered for purchase will cease to
accrue on and after the Change in Control Purchase Date; and
(14) the CUSIP number of the Securities.
(c) A Holder may exercise its rights specified in Section
3.09(a) upon delivery of a written notice of purchase (a "Change in Control
Purchase Notice") to the Paying Agent at any time prior to the close of business
on the Change in Control Purchase Date, stating:
(1) the certificate number of the Security which the Holder
will deliver to be purchased;
(2) the portion of the Principal Amount at Maturity of the
Security which the Holder will deliver to be purchased, which
portion must be $1,000 or an integral multiple thereof; and
(3) that such Security shall be purchased pursuant to the
terms and conditions specified in paragraph 7 of the
Securities.
The delivery of such Security to the Paying Agent prior to, on
or after the Change in Control Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent shall be a condition to the
receipt by the Holder of the Change in Control Purchase Price therefor;
provided, however, that such Change in Control Purchase Price shall be so paid
pursuant to this Section 3.09 only if the Security so delivered to the Paying
Agent shall conform in all respects to the description thereof set forth in the
related Change in Control Purchase Notice.
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The Company shall purchase from the Holder thereof, pursuant
to this Section 3.09, a portion of a Security if the Principal Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. Provisions
of this Indenture that apply to the purchase of all of a Security also apply to
the purchase of such portion of such Security.
Any purchase by the Company contemplated pursuant to the
provisions of this Section 3.09 shall be consummated by the delivery of the
consideration to be received by the Holder (together with accrued and unpaid
contingent interest, if any) promptly following the later of the Change in
Control Purchase Date and the time of delivery of the Security to the Paying
Agent in accordance with this Section 3.09.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Change in Control Purchase Notice
contemplated by this Section 3.09(c) shall have the right to withdraw such
Change in Control Purchase Notice at any time prior to the close of business on
the Change in Control Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the
receipt by it of any Change in Control Purchase Notice or written withdrawal
thereof.
The Company shall not be required to comply with this Section
3.09 if a third party mails a written notice of Change in Control in the manner,
at the times and otherwise in compliance with this Section 3.09 and repurchases
all Securities for which a Change in Control Purchase Notice shall be delivered
and not withdrawn.
SECTION 3.10. Effect of Purchase Notice or Change in Control
Purchase Notice.
Upon receipt by the Paying Agent of the Purchase Notice or
Change in Control Purchase Notice specified in Section 3.08(a) or Section
3.09(c), as applicable, the Holder of the Security in respect of which such
Purchase Notice or Change in Control Purchase Notice, as the case may be, was
given shall (unless such Purchase Notice or Change in Control Purchase Notice is
withdrawn as specified in the following two paragraphs) thereafter be entitled
to receive solely the Purchase Price or Change in Control Purchase Price, as the
case may be, and any accrued and unpaid contingent interest, with respect to
such Security. Such Purchase Price or Change in Control Purchase Price and
contingent interest, if any, shall be paid to such Holder, subject to receipt of
funds and/or securities by the Paying Agent, promptly following the later of (x)
the Purchase Date or the Change in Control Purchase Date, as the case may be,
with respect to such Security (provided the conditions in Section 3.08(a) or
Section 3.09(c), as applicable, have been satisfied) and (y) the time of
delivery of such Security to the Paying Agent by the Holder thereof in the
manner required by Section 3.08(a) or Section 3.09(c), as applicable. Securities
in respect of which a Purchase Notice or Change in Control Purchase Notice, as
the case may be, has been given by the Holder thereof may not be converted
pursuant to Article 10 hereof on or after the date of the delivery of such
Purchase Notice or Change in Control Purchase Notice, as the case may be, unless
such Purchase Notice or Change in Control Purchase Notice, as the case may be,
has first been validly withdrawn as specified in the following two paragraphs.
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A Purchase Notice or Change in Control Purchase Notice, as the
case may be, may be withdrawn by means of a written notice of withdrawal
delivered to the office of the Paying Agent in accordance with the Purchase
Notice or Change in Control Purchase Notice, as the case may be, at any time
prior to the close of business on the Purchase Date or the Change in Control
Purchase Date, as the case may be, specifying:
(1) the certificate number of the Security in respect of which
such notice of withdrawal is being submitted,
(2) the Principal Amount at Maturity of the Security with
respect to which such notice of withdrawal is being submitted,
and
(3) the Principal Amount at Maturity, if any, of such Security
which remains subject to the original Purchase Notice or
Change in Control Purchase Notice, as the case may be, and
which has been or will be delivered for purchase by the
Company.
A written notice of withdrawal of a Purchase Notice may be in
the form set forth in the preceding paragraph or may be in the form of (i) a
conditional withdrawal contained in a Purchase Notice pursuant to the terms of
Section 3.08(a)(1)(D) or (ii) a conditional withdrawal containing the
information set forth in Section 3.08(a)(1)(D) and the preceding paragraph and
contained in a written notice of withdrawal delivered to the Paying Agent as set
forth in the preceding paragraph.
There shall be no purchase of any Securities pursuant to
Section 3.08 (other than through the issuance of Common Stock in payment of the
Purchase Price, including cash in lieu of fractional shares) or 3.09 if there
has occurred (prior to, on or after, as the case may be, the giving, by the
Holders of such Securities, of the required Purchase Notice or Change in Control
Purchase Notice, as the case may be) and is continuing an Event of Default
(other than a default in the payment of the Purchase Price or Change in Control
Purchase Price, as the case may be, and any accrued and unpaid contingent
interest with respect to such Securities). The Paying Agent will promptly return
to the respective Holders thereof any Securities (x) with respect to which a
Purchase Notice or Change in Control Purchase Notice, as the case may be, has
been withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, and any
accrued and unpaid contingent interest with respect to such Securities) in which
case, upon such return, the Purchase Notice or Change in Control Purchase Notice
with respect thereto shall be deemed to have been withdrawn.
SECTION 3.11. Deposit of Purchase Price or Change in Control
Purchase Price.
Prior to 10:00 a.m. (local time in The City of New York) on
the Business Day following the Purchase Date or the Change in Control Purchase
Date, as the case may be, the Company shall deposit with the Trustee or with the
Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of
them is acting as the Paying Agent, shall segregate and hold in trust as
provided in Section 2.04) an amount of money (in immediately available funds if
34
deposited on such Business Day) or Common Stock, if permitted hereunder,
sufficient to pay the aggregate Purchase Price or Change in Control Purchase
Price, as the case may be, of, and any accrued and unpaid contingent interest
with respect to, all the Securities or portions thereof which are to be
purchased as of the Purchase Date or Change in Control Purchase Date, as the
case may be.
SECTION 3.12. Securities Purchased in Part.
Any Security which is to be purchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in aggregate Principal
Amount at Maturity equal to, and in exchange for, the portion of the Principal
Amount at Maturity of the Security so surrendered which is not purchased.
SECTION 3.13. Covenant to Comply With Securities Laws Upon
Purchase of Securities.
In connection with any offer to purchase or purchase of
Securities under Section 3.08 or 3.09 hereof (provided that such offer or
purchase constitutes an "issuer tender offer" for purposes of Rule 13e-4 (which
term, as used herein, includes any successor provision thereto) under the
Exchange Act at the time of such offer or purchase), the Company shall, to the
extent required by law, (i) comply with Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act which may then apply, (ii) file the
related Schedule TO (or any other required schedule) under the Exchange Act, and
(iii) otherwise comply with all Federal and state securities laws so as to
permit the rights and obligations under Sections 3.08 and 3.09 to be exercised
in the time and in the manner specified in Sections 3.08 and 3.09.
SECTION 3.14. Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company
any cash or shares of Common Stock that remain unclaimed as provided in
paragraph 15 of the Securities, together with interest or dividends, if any,
thereon (subject to the provisions of Section 7.01(f)), held by them for the
payment of the Purchase Price or Change in Control Purchase Price, as the case
may be, or contingent interest, if any; provided, however, that to the extent
that the aggregate amount of cash or shares of Common Stock deposited by the
Company pursuant to Section 3.11 exceeds the aggregate Purchase Price or Change
in Control Purchase Price, as the case may be, of, and the accrued and unpaid
contingent interest with respect to, the Securities or portions thereof which
the Company is obligated to purchase as of the Purchase Date or Change in
Control Purchase Date, as the case may be, whether as a result of withdrawal or
otherwise, then promptly after the Business Day following the Purchase Date or
Change in Control Purchase Date, as the case may be, the Trustee shall return
any such excess to the Company together with interest or dividends, if any,
thereon (subject to the provisions of Section 7.01(f)).
35
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall promptly make all payments in respect of the
Securities on the dates and in the manner provided in the Securities or pursuant
to this Indenture. Any amounts to be given to the Trustee or Paying Agent, shall
be deposited with the Trustee or Paying Agent by 10:00 a.m., New York City time,
by the Company. Principal Amount at Maturity, Issue Price plus accrued Original
Issue Discount, Redemption Price, Purchase Price, Change in Control Purchase
Price, and contingent interest, if any, shall be considered paid on the
applicable date due if on such date (or, in the case of a Purchase Price or
Change in Control Purchase Price, on the Business Day following the applicable
Purchase Date or Change in Control Purchase Date, as the case may be) the
Trustee or the Paying Agent holds, in accordance with this Indenture, money or
securities, if permitted hereunder, sufficient to pay all such amounts then due.
The Company shall, to the extent permitted by law, pay
interest on overdue amounts at the rate per annum set forth in paragraph 1 of
the Securities, compounded semiannually, which interest shall accrue from the
date such overdue amount was originally due to the date payment of such amount,
including interest thereon, has been made or duly provided for. All such
interest shall be payable on demand. The accrual of such interest on overdue
amounts shall be in lieu of, and not in addition to, the continued accrual of
Original Issue Discount.
SECTION 4.02. SEC and Other Reports.
If requested by the Trustee, the Company shall deliver to the
Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual
report and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. In the event the Company is at any time
no longer subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, it shall continue to provide the Trustee with reports containing
substantially the same information as would have been required to be filed with
the SEC had the Company continued to have been subject to such reporting
requirements. In such event, such reports shall be provided at the times the
Company would have been required to provide reports had it continued to have
been subject to such reporting requirements. The Company also shall comply with
the other provisions of TIA Section 314(a). Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of the same shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
36
SECTION 4.03. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after
the end of each fiscal year of the Company (beginning with the fiscal year
ending on December 31, 2003) an Officers' Certificate, stating whether or not to
the knowledge of the signers thereof the Company is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
SECTION 4.04. Further Instruments and Acts.
Upon request of the Trustee, the Company will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purposes of this
Indenture.
SECTION 4.05. Maintenance of Office or Agency.
The Company will maintain an office or agency of the Trustee,
Registrar, Paying Agent and Conversion Agent where Securities may be presented
or surrendered for payment, where Securities may be surrendered for registration
of transfer, exchange for other Securities, purchase, redemption or conversion
for Common Stock and where notices and demands to or upon the Company in respect
of the Securities and this Indenture may be served. The agency specified in
Section 12.02 shall initially be such office or agency for all of the aforesaid
purposes. The Company shall give prompt written notice to the Trustee of the
location, and of any change in the location, of any such office or agency (other
than a change in the location of the office of the Trustee). If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 12.02.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations.
SECTION 4.06. Delivery of Certain Information.
At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, upon the request of a Holder or any beneficial holder
of Securities or shares of Common Stock that are restricted securities issued
upon conversion thereof, the Company will promptly furnish or cause to be
furnished Rule 144A Information (as defined below) to such Holder or any
beneficial holder of Securities or holder of shares of Common Stock issued upon
conversion of Securities, or to a prospective purchaser of any such security
designated by any such holder, as the case may be, to the extent required to
permit compliance by such Holder or holder with Rule 144A under the Securities
Act in connection with the resale of any such security. "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act.
37
SECTION 4.07. Calculation of Tax Original Issue Discount.
The Company agrees, and each Holder and any beneficial owner
of a Security by its purchase thereof shall be deemed to agree, to treat, for
United States federal income tax purposes, the Securities as debt instruments
that are subject to Treasury Regulation Section 1.1275-4(b). For United States
federal income tax purposes, the Company agrees, and each Holder and any
beneficial owner of a Security by its purchase thereof shall be deemed to agree,
to treat the fair market value of the Common Stock received upon the conversion
of a Security, or upon the Holder's or beneficial owner's exercise of a put
right where the Company elects to pay in Common Stock, as a contingent payment
for purposes of Treasury Regulation Section 1.1275-4(b) and to accrue interest
with respect to outstanding Securities as original issue discount for United
States federal income tax purposes ("Tax OID") according to the "noncontingent
bond method," set forth in Section 1.1275-4(b) of the Treasury Regulations,
using the comparable yield set forth in Annex C to this Indenture compounded
semiannually and the projected payment schedule attached as Annex C to this
Indenture.
The Company acknowledges and agrees, and each Holder and any
beneficial owner of a Security by its purchase thereof shall be deemed to
acknowledge and agree, that (i) the comparable yield means the annual yield the
Company would pay, as of the Issue Date, on a noncontingent, nonconvertible,
fixed-rate debt security with terms and conditions otherwise comparable to those
of the Securities, (ii) the schedule of projected payments is determined on the
basis of an assumption of linear growth of the stock price and a constant
dividend yield and is not determined for any purpose other than for the
determination of interest accruals and adjustments thereof in respect of the
Securities for United States federal income tax purposes and (iii) the
comparable yield and the schedule of projected payments do not constitute a
projection or representation regarding the amounts payable on the Securities.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. Company May Consolidate, etc. Only on Certain
Terms.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company, or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(a) in case the Company shall consolidate with or merge into
another corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance or transfer, or which leases, the properties and assets of the
Company substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the Principal
38
Amount at Maturity, Issue Price plus accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price and contingent interest,
if any, on all the Securities and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time, or both,
would become an Event of Default, shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, conveyance, transfer or lease and such supplemental indenture comply
with this Article and that all conditions precedent herein provided for relating
to such transaction have been met.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation with or merger into any other
corporation, or any conveyance, transfer or lease of the properties and assets
of the Company substantially as an entirety in accordance with Section 5.01, the
successor corporation formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor had been named as
the Company herein, and thereafter, except in the case of a lease, the Company
(which term for this purpose shall mean the Person named as the "Company" in the
first paragraph of this instrument or any successor corporation which shall
theretofore have become such in the manner presented in this Article) shall be
relieved of all obligations and covenants under this Indenture and the
Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
"Event of Default", wherever used herein with respect to the
Securities, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law, pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) the Company defaults in payment of any contingent
interest on any of the Securities, which default continues for
30 days;
(2) the Company defaults in the payment of the
Principal Amount at Maturity, Issue Price, accrued Original
Issue Discount, Redemption Price, Purchase Price or Change in
Control Purchase Price on any Security when the same becomes
due and payable at its Stated Maturity, upon redemption, upon
declaration, when due for purchase by the Company or
otherwise;
39
(3) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture (other
than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt
with), and continuance of such default or breach for a period
of 90 days after there has been given by registered or
certified mail, to the Company by the Trustee, or to the
Company and the Trustee by the Holders of at least 25% in
Principal Amount at Maturity of the outstanding Securities, a
written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of
Default" hereunder, or
(4) a default under any Indebtedness for money
borrowed by the Company or any Subsidiary or under any
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
Subsidiary (including this Indenture), whether such
Indebtedness now exists or shall hereafter be created, which
default shall have resulted in such Indebtedness in an
outstanding principal amount in excess of $20 million becoming
or being declared due and payable prior to the date on which
it would otherwise have become due and payable, without such
acceleration having been rescinded or annulled, or such
Indebtedness having been discharged, within a period of 10
days after there shall have been given, by registered or
certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in
Principal Amount at Maturity of the outstanding Securities a
written notice specifying such default and requiring the
Company to cause such acceleration to be rescinded or annulled
or cause such Indebtedness to be discharged and stating that
such notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any
applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of
any substantial part of its property, or ordering the winding
up or liquidation of its affairs, 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 90 consecutive
days; or
(6) the commencement by the Company of a voluntary
case or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law or
of any other case or proceeding to be adjudicated a bankrupt
or insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar 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
applicable Federal or State 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
40
similar official of the Company or of any substantial part of
it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the
Company in furtherance of any such action.
A Default under clause (3) or clause (4) above is not an Event
of Default until the Trustee notifies the Company, or the Holders of at least
25% in aggregate Principal Amount at Maturity of the Securities at the time
outstanding notify the Company and the Trustee, of the Default and the Company
does not cure such Default (and such Default is not waived) within the time
specified in clause (3) or clause (4) above after actual receipt of such notice.
Any such notice must specify the Default, demand that it be remedied and state
that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
it becomes aware of the occurrence thereof, written notice of any event which
with the giving of notice or the lapse of time, or both, would become an Event
of Default under clause (3) or clause (4) above, its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default
specified in Section 6.01(5) or (6) in respect of the Company) occurs and is
continuing, the Trustee by Notice to the Company, or the Holders of at least 25%
in aggregate Principal Amount at Maturity of the Securities at the time
outstanding by notice to the Company and the Trustee, may declare the Issue
Price plus accrued Original Issue Discount through the date of declaration, and
any accrued and unpaid contingent interest through the date of such declaration,
on all the Securities to be immediately due and payable. Upon such a
declaration, such Issue Price plus accrued Original Issue Discount, and such
accrued and unpaid contingent interest, if any, shall be due and payable
immediately. If an Event of Default specified in Section 6.01(5) or (6) in
respect of the Company occurs and is continuing, the Issue Price plus accrued
Original Issue Discount plus any accrued and unpaid contingent interest, on all
the Securities shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Securityholders. The
Holders of a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding, by notice to the Trustee (and without notice
to any other Securityholder) may rescind an acceleration and its consequences if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of the
Issue Price plus accrued Original Issue Discount plus accrued and unpaid
contingent interest that have become due solely as a result of acceleration and
if all amounts due to the Trustee under Section 7.07 have been paid. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of the Issue Price plus
accrued Original Issue Discount plus any accrued and unpaid contingent interest
on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
41
The Trustee may maintain a proceeding even if the Trustee does
not possess any of the Securities or does not produce any of the Securities in
the proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. Except as set forth in Section 2.07 hereof, no remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults.
Subject to Section 6.02, the Holders of a majority in
aggregate Principal Amount at Maturity of the Securities at the time
outstanding, by notice to the Trustee (and without notice to any other
Securityholder), may waive an existing Default and its consequences except (1)
an Event of Default described in Section 6.01(1) or (2), (2) a Default in
respect of a provision that under Section 9.02 cannot be amended without the
consent of each Securityholder affected or (3) a Default which constitutes a
failure to convert any Security in accordance with the terms of Article 10. When
a Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right. This Section 6.04
shall be in lieu of Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is
hereby expressly excluded from this Indenture, as permitted by the TIA.
SECTION 6.05. Control by Majority.
The Holders of a majority in aggregate Principal Amount at
Maturity of the Securities at the time outstanding may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines in good faith is unduly prejudicial to
the rights of other Securityholders or could, in reasonable likelihood, impose
personal liability upon the Trustee unless the Trustee is offered indemnity
satisfactory to it. This Section 6.05 shall be in lieu of Section 316(a)1(B) of
the TIA and such Section 316(a)1(B) is hereby expressly excluded from this
Indenture, as permitted by the TIA.
SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to
this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice
stating that an Event of Default is continuing;
(2) the Holders of at least 25% in aggregate
Principal Amount at Maturity of the Securities at the time
outstanding make a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee
security or indemnity satisfactory to the Trustee against any
loss, liability or expense;
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(4) the Trustee does not comply with the request
within 60 days after receipt of such notice, request and offer
of security or indemnity; and
(5) the Holders of a majority in aggregate Principal
Amount at Maturity of the Securities at the time outstanding
do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of any other Securityholder or to obtain a preference or priority over
any other Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of the Principal Amount at Maturity,
Issue Price plus accrued Original Issue Discount, Redemption Price, Purchase
Price, Change in Control Purchase Price, and contingent interest, if any, in
respect of the Securities held by such Holder, on or after the respective due
dates expressed in the Securities or any Redemption Date, and to convert the
Securities in accordance with Article 10, or to bring suit for the enforcement
of any such payment on or after such respective dates or the right to convert,
shall not be impaired or affected adversely without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default described in Section 6.01(1) or (2)
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount owing
with respect to the Securities and the amounts provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the Principal Amount at
Maturity, Issue Price plus accrued Original Issue Discount, Redemption Price,
Purchase Price, Change in Control Purchase Price, and contingent interest, if
any, in respect of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of any such amount)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(a) to file and prove a claim for the whole amount of the
Principal Amount at Maturity, Issue Price plus accrued
Original Issue Discount, Redemption Price, Purchase Price,
Change in Control Purchase Price as the case may be, or
contingent interest, if any, and to file such other papers or
documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel or any other amounts
due the Trustee under Section 7.07) and of the Holders allowed
in such judicial proceeding, and
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(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute
the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6,
it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for the Principal Amount at Maturity, Issue Price
plus accrued Original Issue Discount, Redemption Price,
Purchase Price, Change in Control Purchase Price, as the case
may be, and contingent interest, if any, ratably, without
preference or priority of any kind, according to such amounts
due and payable on the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 6.10. At least 15 days
before such record date, the Trustee shall mail to each Securityholder and the
Company a notice that states the record date, the payment date and the amount to
be paid.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant 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 and expenses, against any party
litigant in the suit (other than the Trustee), having due regard to the merits
and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 or a suit by Holders of more than 10% in aggregate
Principal Amount at Maturity of the Securities at the time outstanding. This
Section 6.11 shall be in lieu of
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Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded
from this Indenture, as permitted by the TIA.
SECTION 6.12. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury or other law wherever enacted, now or at any time hereafter in
force, which would prohibit or forgive the Company from paying all or any
portion of the Principal Amount at Maturity, Issue Price plus accrued Original
Issue Discount, Redemption Price, Purchase Price, Change in Control Purchase
Price, as the case may be, and contingent interest, if any, in respect of
Securities, or any interest on such amounts, as contemplated herein, or which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that
are specifically set forth in this Indenture and no others;
and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon any certificate or opinion furnished to the
Trustee and conforming to the requirements of this Indenture,
but in case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Indenture, but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein. This Section 7.01(b) shall be in lieu of
Section 315(a) of the TIA and such Section 315(a) is hereby
expressly excluded from this Indenture, as permitted by the
TIA.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
45
(1) this paragraph (c) does not limit the effect of
paragraph (b) of this Section 7.01;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it
is proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(3) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.05.
Subparagraphs (c)(1), (2) and (3) shall be in lieu of Sections
315(d)(1), 315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1),
315(d)(2) and 315(d)(3) are hereby expressly excluded from this Indenture, as
permitted by the TIA.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section
7.01.
(e) The Trustee may refuse to perform any duty or exercise any
right or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
(acting in any capacity hereunder) shall be under no liability for interest on
any money received by it hereunder unless otherwise agreed in writing with the
Company.
SECTION 7.02. Rights of Trustee.
Subject to its duties and responsibilities under the
provisions of Section 7.01, and, except as expressly excluded from this
Indenture pursuant to said Section 7.01, subject also to its duties and
responsibilities under the TIA:
(a) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, conclusively rely upon an Officers' Certificate;
(c) the Trustee and the Bid Solicitation Agent may execute any
of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
46
(d) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith which it believes to be
authorized or within its rights or powers conferred under this Indenture;
(e) the Trustee may consult with counsel selected by it and
any advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;
(f) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby;
(g) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
resolution of the Board of Directors;
(h) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document,
including, without limitation, any Company Request, Company Order or Officers'
Certificate, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney at the sole cost of the Company and shall
incur no liability or additional liability of any kind by reason of such inquiry
or investigation or lack thereof;
(i) the Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee received
written notice of an event which is in fact such a Default or Event of Default,
and such notice references the Securities and this Indenture, describes the
event with specificity, and alleges that the occurrence of this event is a
Default or an Event of Default under this Indenture;
(j) the rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder; and
(k) the Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers' Certificate may be signed by any person authorized to
sign an Officers' Certificate, including any person specified as so authorized
in any such certificate previously delivered and not superseded.
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SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
its Affiliates with the same rights it would have if it were not Trustee. Any
Paying Agent, Registrar, Conversion Agent or co-registrar may do the same with
like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use or application of the proceeds from the Securities, it shall
not be responsible for any statement in the registration statement for the
Securities under the Securities Act or in the Indenture or the Securities (other
than its certificate of authentication), or the determination as to which
beneficial owners are entitled to receive any notices hereunder.
SECTION 7.05. Notice of Defaults.
If a Default occurs and if it is known to the Trustee, the
Trustee shall give to each Securityholder notice of the Default within 90 days
after the Trustee gains knowledge of the Default unless such Default shall have
been cured or waived before the giving of such notice. Except in the case of a
Default described in Section 6.01(1) or (2), the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Securityholders.
The second sentence of this Section 7.05 shall be in lieu of the proviso to
Section 315(b) of the TIA and such proviso is hereby expressly excluded from
this Indenture, as permitted by the TIA. The Trustee shall not be deemed to have
knowledge of a Default unless a Responsible Officer of the Trustee has received
written notice of such Default in the manner described in Section 7.02(i).
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each May15 beginning with the May 15
following the date of this Indenture, the Trustee shall transmit to each
Securityholder requesting such, in the manner and to the extent provided in
Section 12.02, a brief report, dated as of such May 15, with respect to:
(1) any change to its eligibility under Section 7.10;
(2) the character and amount of any advances made by the
Trustee, as Trustee, which remain unpaid on the date of such
report, and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securityholders,
on the trust estate or on property or funds held or collected
by it, if such advances so remaining unpaid aggregate more
than one-half of one percent of the aggregate Principal Amount
at Maturity of Securities outstanding on such date;
(3) any change to the property and funds physically in the
Trustee's possession as Trustee on the date of such report;
and
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(4) any action taken by it in the performance of its duties
under this Indenture which it has not previously reported and
which in its opinion materially affects the Securities or the
trust estate, except action in respect of a Default, notice of
which has been or is to be withheld by it in accordance with
Section 7.05.
SECTION 7.07. Compensation and Indemnity.
The Company agrees:
(a) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree in
writing for all services rendered by it hereunder (which compensation shall not
be limited (to the extent permitted by law) by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, advances and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify the Trustee or any predecessor Trustee and
their agents for, and to hold them harmless against, any loss, damage, claim,
liability, cost or expense (including reasonable attorney's fees and expenses
and taxes (other than taxes based upon, measured by or determined by the income
of the Trustee)) reasonably incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
this trust, including the reasonable costs and expenses of defending itself
against any claim (whether asserted by the Company or any Holder or any other
Person) or liability in connection with the acceptance, exercise or performance
of any of its powers or duties hereunder.
To secure the Company's payment obligations in this Section
7.07, Holders shall have been deemed to have granted to the Trustee a lien prior
to the Securities on all money or property held or collected by the Trustee,
except that held in trust to pay the Principal Amount at Maturity, Issue Price
plus accrued Original Issue Discount, Redemption Price, Purchase Price, Change
in Control Purchase Price, contingent interest or interest, if any, as the case
may be, on particular Securities.
The Company's payment obligations pursuant to this Section
7.07 shall survive the discharge of this Indenture and the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 6.01(5) or (6), the expenses including the
reasonable charges and expenses of its counsel, are intended to constitute
expenses of administration under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company; provided,
however, no such resignation shall be effective until a successor Trustee has
accepted its appointment pursuant to this Section 7.08. The Holders of a
majority in aggregate Principal Amount at Maturity of the
49
Securities at the time outstanding may remove the Trustee by so notifying the
Trustee and the Company. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint, by
resolution of the Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.07.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in aggregate Principal Amount at Maturity
of the Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
The resignation or removal of a Trustee shall not diminish,
impair or terminate its rights to indemnification pursuant to Section 7.07 as
they relate to periods prior to such resignation or removal.
SECTION 7.09. Successor Trustee by Merger.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation, the resulting, surviving or transferee corporation without
any further act shall be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee and shall have a combined capital and surplus of at
least $50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to the
50
requirements of federal, state, territorial or District of Columbia supervising
or examining authority, then, for the purposes of this Section 7.10, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.10, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article 7.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. Discharge of Liability on Securities.
When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07) for
cancellation or (ii) all outstanding Securities have become due and payable and
the Company deposits with the Trustee, the Paying Agent (if the Paying Agent is
not the Company or any Subsidiary or any Affiliate of either of them) or the
Conversion Agent cash or, if expressly permitted by the terms of the Securities
or the Indenture, Common Stock or governmental obligations sufficient to pay all
amounts due and owing on all outstanding Securities (other than Securities
replaced pursuant to Section 2.07), and if in either case the Company pays all
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 7.07, cease to be of further effect. The Trustee shall join in the
execution of a document prepared by the Company acknowledging satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers'
Certificate and Opinion of Counsel and at the cost and expense of the Company.
SECTION 8.02. Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company
upon written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property law. After return to the Company,
Holders entitled to the money or securities must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another person and the Trustee and the Paying Agent shall have no further
liability to the Securityholders with respect to such money or securities for
that period commencing after the return thereof.
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture or the
Securities without the consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
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(2) to comply with Article 5 or Section 10.14;
(3) to secure the Company's obligations under the Securities
and this Indenture;
(4) to add to the Company's covenants for the benefit of the
Securityholders or to surrender any right or power conferred
upon the Company;
(5) to make any change to comply with the TIA, or any
amendment thereto, or to comply with any requirement of the
SEC in connection with the qualification of the Indenture
under the TIA, or as necessary in connection with the
registration of the Securities under the Securities Act if at
any time the Company seeks to register the Securities
thereunder;
(6) to make any change that does not adversely affect the
rights of any Holder;
(7) to declare additional Purchase Dates and corresponding
Purchase Prices under Section 7 of the Securities; or
(8) to make any changes necessary or appropriate for the
issuance of Certificated Securities pursuant to Section
2.12(e).
Any amendment described in clause (1) above made solely to
conform this Indenture to the final offering memorandum provided to investors in
connection with the initial offering of the Securities by the Company will not
be deemed to materially and adversely affect the interests of the Holders.
SECTION 9.02. With Consent of Holders.
With the written consent of the Holders of at least a majority
in aggregate Principal Amount at Maturity of the Securities at the time
outstanding, the Company and the Trustee may amend this Indenture or the
Securities. However, without the consent of each Securityholder affected, an
amendment to this Indenture or the Securities may not:
(1) change the provisions of this Indenture that relate to
modifying or amending this Indenture;
(2) make any change in the manner of calculation or rate of
accrual of, or that adversely affects the right to receive,
Original Issue Discount; make any change in the manner of
calculation or rate of accrual of, or that adversely affects
the right to receive, contingent interest; reduce the rate of
interest referred to in paragraph 1 of the Securities; or
extend the time for payment of Original Issue Discount or
contingent interest, if any, on any Security;
(3) reduce the Principal Amount at Maturity or the Issue Price
of or change the Stated Maturity of any Security;
52
(4) reduce the Redemption Price, Purchase Price or Change in
Control Purchase Price of any Security;
(5) make any Security payable in money or securities other
than that stated in the Security;
(6) make any change in Section 6.04, Section 6.07 or this
Section 9.02, except to increase any percentage set forth
therein;
(7) make any change that adversely affects the right to
convert any Security;
(8) make any change that adversely affects the right to
require the Company to purchase the Securities in accordance
with the terms thereof and this Indenture; or
(9) impair the right to receive payment with respect to, a
Security, or right to institute suit for the enforcement of
any payment with respect to, or conversion of, the Securities.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective,
the Company shall mail to each Holder a notice briefly describing the amendment.
Failure to mail such notice or a defect in the notice shall not affect the
validity of the amendment.
SECTION 9.03. Compliance with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall comply with the TIA.
SECTION 9.04. Revocation and Effect of Consents, Waivers and
Actions.
Until an amendment, waiver or other action by Holders becomes
effective, a consent thereto by a Holder of a Security hereunder is a continuing
consent by the Holder and every subsequent Holder of that Security or portion of
the Security that evidences the same obligation as the consenting Holder's
Security, even if notation of the consent, waiver or action is not made on the
Security. However, any such Holder or subsequent Holder may revoke the consent,
waiver or action as to such Holder's Security or portion of the Security if the
Trustee receives the notice of revocation before the date the amendment, waiver
or action becomes effective. After an amendment, waiver or action becomes
effective, it shall bind every Securityholder.
SECTION 9.05. Notation on or Exchange of Securities.
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in
53
form approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities so modified as to
conform, in the opinion of the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for outstanding Securities.
SECTION 9.06. Trustee to Sign Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized
pursuant to this Article 9 if the amendment contained therein does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, sign such supplemental indenture. In signing such
supplemental indenture the Trustee shall receive, and (subject to the provisions
of Section 7.01) shall be fully protected in relying upon, in addition to the
documents required by Section 12.04, an Officers' Certificate and an Opinion of
Counsel stating that such amendment is authorized or permitted by this
Indenture.
SECTION 9.07. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
ARTICLE 10
CONVERSION
SECTION 10.01. Conversion Privilege.
A Holder of a Security may convert such Security into Common
Stock at any time during the period stated in paragraph 9 of the Securities
subject to the provisions of this Article 10. The number of shares of Common
Stock issuable upon conversion of a Security per $1,000 of Principal Amount at
Maturity thereof (the "Conversion Rate") shall be that set forth in paragraph 9
in the Securities, subject to adjustment as herein set forth.
A Holder may convert a portion of the Principal Amount at
Maturity of a Security if the portion is $1,000 or an integral multiple of
$1,000. Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of a Security.
"Average Sale Price" means the average of the Sale Prices of
the Common Stock for the shorter of
(i) 30 consecutive Trading Days ending on the last full
Trading Day prior to the Time of Determination with respect to
the rights, warrants or options or distribution in respect of
which the Average Sale Price is being calculated, or
(ii) the period (x) commencing on the date next succeeding the
first public announcement of (a) the issuance of rights,
warrants or options or (b) the distribution, in each case, in
respect of which the Average Sale Price is being
54
calculated and (y) proceeding through the last full Trading
Day prior to the Time of Determination with respect to the
rights, warrants or options or distribution in respect of
which the Average Sale Price is being calculated (excluding
days within such period, if any, which are not Trading Days),
or
(iii) the period, if any, (x) commencing on the date next
succeeding the Ex-Dividend Time with respect to the next
preceding (a) issuance of rights, warrants or options or (b)
distribution, in each case, for which an adjustment is
required by the provisions of Section 10.06(4), 10.07 or 10.08
and (y) proceeding through the last full Trading Day prior to
the Time of Determination with respect to the rights, warrants
or options or distribution in respect of which the Average
Sale Price is being calculated (excluding days within such
period, if any, which are not Trading Days).
In the event that the Ex-Dividend Time (or in the case of a
subdivision, combination or reclassification, the effective date with respect
thereto) with respect to a dividend, subdivision, combination or
reclassification to which Section 10.06(1), (2), (3) or (5) applies occurs
during the period applicable for calculating "Average Sale Price" pursuant to
the definition in the preceding sentence, "Average Sale Price" shall be
calculated for such period in a manner determined by the Board of Directors to
reflect the impact of such dividend, subdivision, combination or
reclassification on the Sale Price of the Common Stock during such period.
"Time of Determination" means the time and date of the earlier
of (i) the determination of stockholders entitled to receive rights, warrants or
options or a distribution, in each case, to which Section 10.07 or 10.08 applies
and (ii) the time ("Ex-Dividend Time") immediately prior to the commencement of
"ex-dividend" trading for such rights, warrants or options or distribution on
the New York Stock Exchange or such other national or regional exchange or
market on which the Common Stock is then listed or quoted.
SECTION 10.02. Conversion Procedure.
To convert a Security a Holder must satisfy the requirements
in paragraph 9 of the Securities. The date on which the Holder satisfies all
those requirements is the conversion date (the "Conversion Date"). The
Conversion Agent shall notify the Company of the Conversion Date within one
Business Day of the Conversion Date. Within two Business Days following the
Conversion Date, the Company shall deliver to the Holder, through the Conversion
Agent, written notice of whether such Securities shall be converted into Common
Stock or paid in cash or a combination of cash and Common Stock, unless the
Company shall have delivered to the Holder a notice of redemption pursuant to
Section 3.03 hereof and the Conversion Date occurs before the Redemption Date
set forth in such notice. If the Company shall have notified the Holder that all
of such Securities shall be converted into Common Stock, the Company shall
deliver to such Holder, through the Conversion Agent, as soon as practicable but
in any event no later than the fifth Business Day following the Conversion Date,
a certificate for the number of full shares of Common Stock issuable upon the
conversion and cash in lieu of any fractional share determined pursuant to
Section 10.03 hereof. Except as otherwise provided in this Article 10, if the
Company shall have notified the Holder that all or a portion of such Securities
shall be paid in cash, the Company shall deliver to the Holder surrendering such
Securities the
55
amount of cash payable with respect to such Securities no later than the tenth
Business Day following such Conversion Date, together with a certificate for the
number of full shares of Common Stock deliverable upon the conversion and cash
in lieu of any fractional shares determined pursuant to Section 10.03 hereof.
Except as otherwise provided in this Article 10, the Company may not change its
election with respect to the consideration to be delivered upon conversion of
Securities once the Company has notified the Holder in accordance with this
paragraph.
The person in whose name the certificate representing such
shares is registered shall be treated as a stockholder of record on and after
the Conversion Date; provided, however, that no surrender of a Security on any
date when the stock transfer books of the Company shall be closed shall be
effective to constitute the person or persons entitled to receive the shares of
Common Stock upon such conversion as the record holder or holders of such shares
of Common Stock on such date, but such surrender shall be effective to
constitute the person or persons entitled to receive such shares of Common Stock
as the record holder or holders thereof for all purposes at the close of
business on the next succeeding day on which such stock transfer books are open;
such conversion shall be at the Conversion Rate in effect on the date that such
Security shall have been surrendered for conversion, as if the stock transfer
books of the Company had not been closed. Upon conversion of a Security, such
person shall no longer be a Holder of such Security.
No payment or adjustment will be made for dividends on, or
other distributions with respect to, any Common Stock except as provided in this
Article 10. On conversion of a Security, accrued Original Issue Discount
attributable to the period from the Issue Date of the Security through but not
including the Conversion Date, accrued Tax OID and (except as provided below)
accrued contingent interest, if any, with respect to the converted Security
shall not be cancelled, extinguished or forfeited, but rather shall be deemed to
be paid in full to the Holder thereof through delivery of the Common Stock
(together with the cash payment, if any, in lieu of fractional shares), or cash
or a combination of cash and Common Stock in lieu thereof, in exchange for the
Security being converted pursuant to the provisions hereof; and the fair market
value of such shares of Common Stock (together with any such cash payment in
lieu of fractional shares), or cash or a combination of cash and Common Stock in
lieu thereof, shall be treated as delivered, to the extent thereof, first in
exchange for Original Issue Discount and Tax OID accrued through the Conversion
Date and accrued contingent interest, if any, and the balance, if any, of the
fair market value of such Common Stock (and any such cash payment in lieu of
fractional shares), or cash in lieu thereof, shall be treated as delivered in
exchange for the Issue Price of the Security being converted pursuant to the
provisions hereof.
The Company agrees, and each Holder and any beneficial owner
of a Security by its purchase thereof shall be deemed to agree, to treat, for
United States federal income tax purposes, the fair market value of the Common
Stock received upon the conversion of a security (together with any cash payment
in lieu of fractional shares) or cash, or a combination of cash and Common Stock
as a contingent payment on the Security for purposes of Treasury Regulation
Section 1.1275-4(b).
56
If the Holder converts more than one Security at the same
time, the number of shares of Common Stock issuable upon the exchange shall be
based on the total Principal Amount at Maturity of the Securities converted.
If the last day on which a Security may be converted is a
Legal Holiday, the Security may be surrendered on the next succeeding day that
is not a Legal Holiday.
Upon surrender of a Security that is converted in part, the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder, a new Security in an authorized denomination equal in Principal Amount
at Maturity to the unconverted portion of the Security surrendered.
The Holders' rights to convert the Securities into Common
Stock are subject to the Company's right to elect instead to pay each such
Holder the amount of cash set forth in the next succeeding sentence (or an
equivalent amount in a combination of cash and shares of Common Stock), in lieu
of delivering such Common Stock; provided, however, that if an Event of Default
(other than a default in a cash payment upon conversion of the Securities) shall
have occurred and be continuing, the Company shall deliver Common Stock in
accordance with this Article 10, whether or not the Company has delivered a
notice pursuant to Section 10.02 hereof to the effect that the Securities would
be paid in cash or a combination of cash and Common Stock. The amount of cash to
be paid pursuant to Section 10.02 hereof for each $1,000 of Principal Amount at
Maturity of Securities (or portion thereof) upon conversion shall be equal to
the average Sale Price of the Common Stock for the five consecutive trading days
immediately following (i) the date of the Company's notice of its election to
deliver cash upon conversion, if the Company has not given a notice of
redemption pursuant to Section 3.03 hereof, or (ii) the Conversion Date, in the
case of a conversion following such a notice of redemption specifying an intent
to deliver cash upon conversion, in either case multiplied by the Conversion
Rate (or appropriate fraction of such Conversion Rate) in effect on such
Conversion Date.
SECTION 10.03. Fractional Shares.
The Company will not issue a fractional share of Common Stock
upon conversion of a Security. Instead, the Company will deliver cash for the
current market value of the fractional share. The current market value of a
fractional share shall be determined, to the nearest 1/1,000th of a share, by
multiplying the Sale Price of the Common Stock, on the last Trading Day prior to
the Conversion Date, of a full share by the fractional amount and rounding the
product to the nearest whole cent.
SECTION 10.04. Taxes on Conversion.
If a Holder converts a Security, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon the conversion. However, the Holder shall pay any such tax
which is due because the Holder requests the shares to be issued in a name other
than the Holder's name. The Conversion Agent may refuse to deliver the
certificates representing the Common Stock being issued in a name other than the
Holder's name until the Conversion Agent receives a sum sufficient to pay any
tax which will be
57
due because the shares are to be delivered in a name other than the Holder's
name. Nothing herein shall preclude any tax withholding required by law or
regulations.
SECTION 10.05. Company to Provide Stock.
The Company shall, prior to issuance of any Securities under
this Article 10, and from time to time as may be necessary, reserve out of its
authorized but unissued Common Stock a sufficient number of shares of Common
Stock to permit the conversion of the Securities.
All shares of Common Stock delivered upon conversion of the
Securities shall be newly issued shares or treasury shares, shall be duly and
validly issued and fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim.
The Company will comply with all federal and state securities
laws regulating the offer and delivery of shares of Common Stock upon conversion
of Securities, if any, and will list or cause to have quoted such shares of
Common Stock on each national securities exchange or in the over-the-counter
market or such other market on which the Common Stock is then listed or quoted.
SECTION 10.06. Adjustment for Change In Capital Stock.
If, after the Issue Date of the Securities, the Company:
(1) pays a dividend or makes a distribution on its Common
Stock payable in shares of its Common Stock or shares of other Capital
Stock;
(2) subdivides its shares of Common Stock;
(3) combines its shares of Common Stock; or
(4) issues by reclassification of its Common Stock any shares
of its Capital Stock (other than rights, warrants or options for its
Capital Stock);
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares of Capital Stock of the
Company which such Holder would have owned immediately following such action if
such Holder had converted the Security immediately prior to such action.
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security upon conversion
of such Security may receive shares of two or more classes of Capital Stock of
the Company, the Conversion Rate shall thereafter be subject to adjustment upon
the occurrence of an action taken with respect to any such class of Capital
Stock as is contemplated by this Article 10 with respect to the Common Stock, on
terms comparable to those applicable to Common Stock in this Article 10.
58
SECTION 10.07. Adjustment for Rights Issue.
If after the Issue Date of the Securities, the Company
distributes any rights, warrants or options to all holders of its Common Stock
entitling them, for a period expiring within 60 days after the record date for
such distribution, to purchase shares of Common Stock at a price per share less
than the Sale Price of the Common Stock as of the Time of Determination, the
Conversion Rate shall be adjusted in accordance with the formula:
R' = R x (O + N)
---------------------
(O + (N x P)/M
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
O = the number of shares of Common Stock outstanding on the
record date for the distribution to which this Section 10.07 is being applied.
N = the number of additional shares of Common Stock offered
pursuant to the distribution.
P = the offering price per share of the additional shares.
M = the Average Sale Price, minus, in the case of (i) a
distribution to which Section 10.06(4) applies or (ii) a distribution to which
Section 10.08 applies, for which, in each case, (x) the record date shall occur
on or before the record date for the distribution to which this Section 10.07
applies and (y) the Ex-Dividend Time shall occur on or after the date of the
Time of Determination for the distribution to which this Section 10.07 applies,
the fair market value (on the record date for the distribution to which this
Section 10.07 applies) of the
(1) Capital Stock of the Company distributed in
respect of each share of Common Stock in such Section
10.06(4)distribution and
(2) assets of the Company or debt securities or any
rights, warrants or options to purchase securities of the
Company distributed in respect of each share of Common Stock
in such Section 10.08 distribution.
The Board of Directors shall determine fair market values for
the purposes of this Section 10.07.
The adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive the
rights, warrants or options to which this Section 10.07 applies. If all of the
shares of Common Stock subject to such rights, warrants or options have not been
issued when such rights, warrants or options expire, then the Conversion Rate
shall promptly be readjusted to the Conversion Rate which would then be in
effect had the adjustment upon the issuance of such rights, warrants or options
been made on the basis of the
59
actual number of shares of Common Stock issued upon the exercise of such rights,
warrants or options.
No adjustment shall be made under this Section 10.07 if the
application of the formula stated above in this Section 10.07 would result in a
value of R' that is equal to or less than the value of R.
SECTION 10.08. Adjustment for Other Distributions.
(a) Subject to Section 10.08(b) if, after the Issue Date of
the Securities, the Company distributes to all holders of its Common Stock any
of its assets excluding distributions of Capital Stock or equity interests
referred to in Section 10.08(b), or debt securities or any rights, warrants or
options to purchase securities of the Company (including securities or cash, but
excluding (x) distributions of Capital Stock referred to in Section 10.06 and
distributions of rights, warrants or options referred to in Section 10.07 and
(y) cash dividends or other cash distributions that are paid out of consolidated
current net earnings or earnings retained in the business as shown on the books
of the Company, unless such cash dividends or other cash distributions are
Extraordinary Cash Dividends), the Conversion Rate shall be adjusted, subject to
the provisions of Section 10.08(c), in accordance with the formula:
R' = (R x M)
-------------
M-F
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, minus, in the case of a
distribution to which Section 10.06(4) applies, for which (i) the record date
shall occur on or before the record date for the distribution to which this
Section 10.08 applies and (ii) the Ex-Dividend Time shall occur on or after the
date of the Time of Determination for the distribution to which this Section
10.08(a) applies, the fair market value (on the record date for the distribution
to which this Section 10.08(a) applies) of any Capital Stock of the Company
distributed in respect of each share of Common Stock in such Section 10.06(4)
distribution.
F = the fair market value (on the record date for the
distribution to which this Section 10.08(a) applies) of the assets, securities,
rights, warrants or options to be distributed in respect of each share of Common
Stock in the distribution to which this Section 10.08(a) is being applied
(including, in the case of cash dividends or other cash distributions giving
rise to an adjustment, all such cash distributed concurrently).
The Board of Directors shall determine fair market values for
the purposes of this Section 10.08(a).
The adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive the
distribution to which this Section 10.08(a) applies.
60
For purposes of this Section 10.08(a), the term "Extraordinary
Cash Dividend" shall mean any cash dividend with respect to the Common Stock the
amount of which, together with the aggregate amount of cash dividends on the
Common Stock to be aggregated with such cash dividend in accordance with the
provisions of this paragraph, equals or exceeds the threshold percentage set
forth in item (i) below. For purposes of item (i) below, the "Ex-Dividend
Measurement Period" with respect to a cash dividend on the Common Stock shall
mean the 365 consecutive day period ending on the date prior to the Ex-Dividend
Time with respect to such cash dividend, and the "Relevant Cash Dividends" with
respect to a cash dividend on the Common Stock shall mean the cash dividends on
the Common Stock with Ex-Dividend Times occurring in the Ex-Dividend Measurement
Period.
(i) If, upon the date prior to the Ex-Dividend Time with
respect to a cash dividend on the Common Stock, the aggregate
amount of such cash dividend together with the amounts of all
Relevant Cash Dividends equals or exceeds on a per share basis
the sum of (a) 5% of the Sale Price of the Common Stock on the
last Trading Day preceding the date of declaration by the
Board of Directors of the cash dividend or distribution with
respect to which this provision is being applied, and (b) the
quotient of the amount of any contingent interest paid on a
Security during the Ex-Dividend Measurement Period and divided
by the conversion rate in effect on the payment date of such
relevant contingent interest payment date, then such cash
dividend together with all Relevant Cash Dividends, shall be
deemed to be an Extraordinary Cash Dividend and for purposes
of applying the formula set forth above in this Section
10.08(a), the value of "F" shall be equal to (y) the aggregate
amount of such cash dividend together with the amount of all
Relevant Cash Dividends, minus (z) the aggregate amount of all
Relevant Cash Dividends for which a prior adjustment in the
Conversion Rate was previously made under this Section
10.08(a).
In making the determinations required by item (i) above, the
amount of cash dividends paid on a per share basis and the amount of any
Relevant Cash Dividends specified in item (i) above, shall be appropriately
adjusted to reflect the occurrence during such period of any event described in
Section 10.06.
(b) If, after the Issue Date of the Securities, the Company
pays a dividend or makes a distribution to all holders of its Common Stock
consisting of Capital Stock of any class or series, or similar equity interests,
of or relating to a Subsidiary or other business unit of the Company, then the
Conversion Rate shall be adjusted in accordance with the formula:
R' = R x (1 + F/M)
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the average of the Post-Distribution Prices of the Common
Stock for the 10 Trading Days commencing on and including the fifth Trading Day
after the date on which
61
"ex-dividend trading" commences for such dividend or distribution on the
principal United States exchange or market which such securities are then listed
or quoted (the "Ex-Dividend Date").
F = the fair market value of the securities distributed in
respect of each share of Common Stock for which this Section 10.08(b) applies
shall mean the number of securities distributed in respect of each share of
Common Stock multiplied by the average of the Post-Distribution Prices of those
securities distributed for the 10 Trading Days commencing on and including the
fifth Trading Day after the Ex-Dividend Date.
"Post-Distribution Price" of Capital Stock or any similar
equity interest on any date means the closing per unit sale price (or, if no
closing sale price is reported, the average of the bid and ask prices or, if
more than one in either case, the average of the average bid and the average ask
prices) on such date for trading of such units on a "when issued" basis without
due bills (or similar concept) as reported in the composite transactions for the
principal United States securities exchange on which such Capital Stock or
equity interest is traded or, if the Capital Stock or equity interest, as the
case may be, is not listed on a United States national or regional securities
exchange, as reported by the National Association of Securities Dealers
Automated Quotation System or by the National Quotation Bureau Incorporated;
provided that if on any date such units have not traded on a "when issued"
basis, the Post-Distribution Price shall be the closing per unit sale price (or,
if no closing sale price is reported, the average of the bid and ask prices or,
if more than one in either case, the average of the average bid and the average
ask prices) on such date for trading of such units on a "regular way" basis
without due bills (or similar concept) as reported in the composite transactions
for the principal United States securities exchange on which such Capital Stock
or equity interest is traded or, if the Capital Stock or equity interest, as the
case may be, is not listed on a United States national or regional securities
exchange, as reported by the National Association of Securities Dealers
Automated Quotation System or by the National Quotation Bureau Incorporated. In
the absence of such quotation, the Company shall be entitled to determine the
Post-Distribution Price on the basis of such quotations which reflect the
post-distribution value of the Capital Stock or equity interests as it considers
appropriate.
(c) In the event that, with respect to any distribution to
which Section 10.08(a) or (b) would otherwise apply, the difference "M-F" is
less than $1.00 or "F" is equal to or greater than "M", then the adjustment
provided by Section 11.08(b) shall not be made and in lieu thereof the
provisions of Section 10.14 shall apply to such distribution.
SECTION 10.09. When Adjustment May Be Deferred.
No adjustment in the Conversion Rate need be made unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Rate. Any adjustments that are not made shall be carried forward and
taken into account in any subsequent adjustment.
All calculations under this Article 10 shall be made to the
nearest cent or to the nearest 1/1,000th of a share, as the case may be (with
one-half cent and 5/10,000ths of a share being rounded upward).
62
SECTION 10.10. When No Adjustment Required.
No adjustment need be made for a transaction referred to in
Section 10.06, 10.07, 10.08 or 10.14 if Securityholders are to participate in
the transaction on a basis and with notice that the Board of Directors
determines to be fair and appropriate in light of the basis and notice on which
holders of Common Stock participate in the transaction. Such participation by
Securityholders may include participation upon conversion provided that an
adjustment shall be made at such time as the Securityholders are no longer
entitled to participate.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no
par value of the Common Stock.
To the extent the Securities become convertible pursuant to
this Article 10 into cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.
SECTION 10.11. Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company shall
promptly mail to Securityholders a notice of the adjustment. The Company shall
file with the Trustee and the Conversion Agent such notice and a certificate
from the Company's independent public accountants briefly stating the facts
requiring the adjustment and the manner of computing it. The certificate shall
be conclusive evidence that the adjustment is correct. Neither the Trustee nor
any Conversion Agent shall be under any duty or responsibility with respect to
any such certificate except to exhibit the same to any Holder desiring
inspection thereof.
SECTION 10.12. Voluntary Increase.
The Company from time to time may increase the Conversion Rate
by any amount for any period of time. Whenever the Conversion Rate is increased,
the Company shall mail to Securityholders and file with the Trustee and the
Conversion Agent a notice of the increase. The Company shall mail the notice at
least 15 days before the date the increased Conversion Rate takes effect. The
notice shall state the increased Conversion Rate and the period it will be in
effect.
A voluntary increase of the Conversion Rate does not change or
adjust the Conversion Rate otherwise in effect for purposes of Section 10.06,
10.07 or 10.08.
SECTION 10.13. Notice of Certain Transactions.
If:
(1) the Company takes any action that would require an
adjustment in the Conversion Rate pursuant to Section 10.06, 10.07 or
10.08 (unless no adjustment is to occur pursuant to Section 10.10); or
63
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 10.14; or
(3) there is a liquidation or dissolution of the Company;
then the Company shall mail to Securityholders and file with the
Trustee and the Conversion Agent a notice stating the proposed record date for a
dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, binding share exchange,
transfer, liquidation or dissolution. The Company shall file and mail the notice
at least 15 days before such date. Failure to file or mail the notice or any
defect in it shall not affect the validity of the transaction.
In the event the Company makes a distribution pursuant to
Section 10.07 or 10.08, which, in the case of Section 10.08, has a per share
value equal to more than 15% of the Sale Price of shares of its Common Stock on
the day preceding the declaration date for such distribution, the Company will
be required to give notice to the holders of LYONs at least 20 days prior to the
Ex-Dividend Date for such distribution.
SECTION 10.14. Reorganization of Company; Special
Distributions.
If the Company is a party to a transaction subject to Section
5.01 (other than a sale of all or substantially all of the assets of the Company
in a transaction in which the holders of Common Stock immediately prior to such
transaction do not receive securities, cash or other assets of the Company or
any other person) or a merger or binding share exchange which reclassifies or
changes the outstanding Common Stock of the Company, the person obligated to
deliver securities, cash or other assets upon conversion of Securities shall
enter into a supplemental indenture. If the issuer of securities deliverable
upon conversion of Securities is an Affiliate of the successor Company, that
issuer shall join in the supplemental indenture.
The supplemental indenture shall provide that the Holder of a
Security may convert it into the kind and amount of securities, cash or other
assets which such Holder would have received immediately after the
consolidation, merger, binding share exchange or transfer if such Holder had
converted the Security immediately before the effective date of the transaction,
assuming (to the extent applicable) that such Holder (i) was not a constituent
person or an Affiliate of a constituent person to such transaction; (ii) made no
election with respect thereto; and (iii) was treated alike with the plurality of
non-electing Holders. The supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practical to the adjustments
provided for in this Article 10. The successor Company shall mail to
Securityholders a notice briefly describing the supplemental indenture.
If this Section applies, neither Section 10.06 nor 10.07
applies.
If the Company makes a distribution to all holders of its
Common Stock of any of its assets, or debt securities or any rights, warrants or
options to purchase securities of the Company that, but for the provisions of
Section 10.08(c), would otherwise result in an adjustment in the Conversion Rate
pursuant to the provisions of Section 10.08, then, from and after the record
date for determining the holders of Common Stock entitled to receive the
distribution, a Holder of a Security that converts such Security in accordance
with the provisions
64
of this Indenture shall upon such conversion be entitled to receive, in addition
to the shares of Common Stock into which the Security is convertible, the kind
and amount of securities, cash or other assets comprising the distribution that
such Holder would have received if such Holder had converted the Security
immediately prior to the record date for determining the holders of Common Stock
entitled to receive the distribution.
SECTION 10.15. Company Determination Final.
Any determination that the Company or the Board of Directors
must make pursuant to Section 10.03, 10.06, 10.07, 10.08, 10.09, 10.10, 10.14 or
10.17 is conclusive.
SECTION 10.16. Trustee's Adjustment Disclaimer.
The Trustee has no duty to determine when an adjustment under
this Article 10 should be made, how it should be made or what it should be. The
Trustee has no duty to determine whether a supplemental indenture under Section
10.14 need be entered into or whether any provisions of any supplemental
indenture are correct. The Trustee shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Securities. The Trustee shall not be responsible for the
Company's failure to comply with this Article 10. Each Conversion Agent shall
have the same protection under this Section 10.16 as the Trustee.
SECTION 10.17. Simultaneous Adjustments.
In the event that this Article 10 requires adjustments to the
Conversion Rate under more than one of Sections 10.06(4), 10.07 or 10.08, and
the record dates for the distributions giving rise to such adjustments shall
occur on the same date, then such adjustments shall be made by applying, first,
the provisions of Section 10.06, second, the provisions of Section 10.08 and,
third, the provisions of Section 10.07.
SECTION 10.18. Successive Adjustments.
After an adjustment to the Conversion Rate under this Article
10, any subsequent event requiring an adjustment under this Article 10 shall
cause an adjustment to the Conversion Rate as so adjusted.
SECTION 10.19. Rights Issued in Respect of Common Stock Issued
Upon Conversion.
Each share of Common Stock issued upon conversion of
Securities pursuant to this Article 10 shall be entitled to receive the
appropriate number of rights ("Rights"), if any, and the certificates
representing the Common Stock issued upon such conversion shall bear such
legends, if any, in each case as may be provided by the terms of any
shareholders rights agreement adopted by the Company, as the same may be amended
form time to time (in each case, a "Rights Agreement"). Provided that such
Rights Agreement requires that each share of Common Stock issued upon conversion
of Securities at any time prior to the distribution of separate certificates
representing the Rights be entitled to receive such Rights, then,
notwithstanding anything else to the contrary in this Article 10, there shall
not be any adjustment
65
to the conversion privilege or Conversion Rate as a result of the issuance of
Rights, the distribution of separate certificates representing the Rights, the
exercise or redemption of such Rights in accordance with any Rights Agreement,
or the termination or invalidation of such Rights.
ARTICLE 11
PAYMENT OF INTEREST
SECTION 11.01. Interest Payments.
Contingent interest on any Security that is payable, and is
punctually paid or duly provided for, on any applicable payment date shall be
paid to the person in whose name that Security is registered at the close of
business on the accrual date for such interest, as described in Paragraph 5 of
the Securities, at the office or agency of the Company maintained for such
purpose. Each installment of contingent interest payable in cash on any Security
shall be paid in same-day funds by transfer to an account maintained by the
payee located inside the United States, if the Trustee shall have received
proper wire transfer instructions from such payee not later than the related
accrual date or, if no such instructions have been received by check drawn on a
bank in the City of New York mailed to the payee at its address set forth on the
Registrar's books. In the case of a permanent Global Security, contingent
interest payable on any applicable payment date will be paid to the Depositary,
with respect to that portion of such permanent Global Security held for its
account by Cede & Co. for the purpose of permitting such party to credit the
interest received by it in respect of such permanent Global Security to the
accounts of the beneficial owners thereof.
SECTION 11.02. Defaulted Interest.
Except as otherwise specified with respect to the Securities,
any contingent interest on any Security that is payable, but is not punctually
paid or duly provided for, within 30 days following any applicable payment date
(herein called "Defaulted Interest", which term shall include any accrued and
unpaid interest that has accrued on such defaulted amount in accordance with
paragraph 1 of the Securities), shall forthwith cease to be payable to the
registered Holder thereof on the relevant accrual date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities are
registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the
proposed payment (which shall not be less than 20 days after
such notice is received by the Trustee), and at the same time
the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to
the date of the proposed
66
payment, such money when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as
in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the
proposed payment (the "Special Record Date"). The Trustee
shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities at
his address as it appears on the list of Securityholders
maintained pursuant to Section 2.05 not less than 10 days
prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the persons in whose names the
Securities are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to
the following clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed
practicable by the Trustee.
SECTION 11.03. Interest Rights Preserved.
Subject to the foregoing provisions of this Article 11 and
Section 2.06, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry the
rights to any contingent interest accrued and unpaid, and to accrue, which were
carried by such other Security.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
SECTION 12.02. Notices; Address of Agency.
Any request, demand, authorization, notice, waiver, consent or
communication shall be in writing and delivered in person or mailed by
first-class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:
67
if to the Company:
3M Company
Office of General Counsel
3M Center
St. Paul, MN 55134
Telephone No.: [ ]
Facsimile No.: (651) 736-9469
if to the Trustee:
Citibank, N.A.
111 Wall Street
14th Floor, Zone 3
New York, New York 10043
Facsimile: (212) 657-4009
Attention: Citibank Agency and Trust
The Company or the Trustee by notice given to the other in the
manner provided above may designate additional or different addresses for
subsequent notices or communications.
Any notice or communication given to a Securityholder shall be
mailed to the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the
Securityholders, it shall mail a copy to the Trustee and each Registrar, Paying
Agent, Conversion Agent or co-registrar.
SECTION 12.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b)
with other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).
SECTION 12.04. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been
complied with; and
68
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied
with.
SECTION 12.05. Statements Required in Certificate or Opinion.
Unless the Trustee agrees, in its sole discretion, to accept a
different form or format, each Officers' Certificate or Opinion of Counsel with
respect to compliance with a covenant or condition provided for in this
Indenture shall include:
(1) a statement that each person making such Officers'
Certificate or Opinion of Counsel has read such covenant or
condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such Officers' Certificate or Opinion of
Counsel are based;
(3) a statement that, in the opinion of each such person, he
has made such examination or investigation as is necessary to
enable such person to express an informed opinion as to
whether or not such covenant or condition has been complied
with; and
(4) a statement that, in the opinion of such person, such
covenant or condition has been complied with.
SECTION 12.06. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 12.07. Rules by Trustee, Paying Agent, Conversion
Agent and Registrar.
The Trustee may make reasonable rules for action by or a
meeting of Securityholders. The Registrar, Conversion Agent and the Paying Agent
may make reasonable rules for their functions.
SECTION 12.08. Calculations.
The calculation of the Purchase Price, Change in Control
Purchase Price, Conversion Rate, Market Price, Sale Price of the Common Stock
and each other calculation to be made hereunder (other than the LYON Market
Price) shall be the obligation of the Company. All calculations made by the
Company as contemplated pursuant to this Section 12.08 shall be final and
binding on the Company and the Holders absent manifest error. The Trustee,
Paying Agent, Conversion Agent and Bid Solicitation Agent shall not be obligated
to recalculate, recompute or confirm any such calculations.
69
SECTION 12.09. Legal Holidays.
A "Legal Holiday" is any day other than a Business Day. If any
specified date (including a date for giving notice) is a Legal Holiday, the
action shall be taken on the next succeeding day that is not a Legal Holiday,
and, if the action to be taken on such date is a payment in respect of the
Securities, no Original Issue Discount or interest, if any, shall accrue for the
intervening period.
SECTION 12.10. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE
AND THE SECURITIES.
SECTION 12.11. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 12.12. Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 12.13. Multiple Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement. One signed copy is enough to prove this Indenture.
70
IN WITNESS WHEREOF, the undersigned, being duly authorized,
have executed this Indenture on behalf of the respective parties hereto as of
the date first above written.
3M Company
By: /s/ Janet L. Yeomans
--------------------------------
Name: Janet L. Yeomans
Title: Vice President and Treasurer
CITIBANK, N.A., as Trustee
By: /s/ Wafaa Orfy
--------------------------------
Name: Wafaa Orfy
Title: Vice President
71
EXHIBIT A-1
[FORM OF FACE OF RULE 144A GLOBAL SECURITY]
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL
ISSUE DISCOUNT AND THE ISSUE DATE OF THIS SECURITY IS NOVEMBER 21, 2002. IN
ADDITION, THIS SECURITY IS SUBJECT TO UNITED STATES FEDERAL INCOME TAX
REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF
SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE ISSUE PRICE OF
EACH SECURITY IS $860.87 PER $1,000 OF PRINCIPAL AMOUNT AND THE COMPARABLE YIELD
IS 4.55%, COMPOUNDED SEMI-ANNUALLY (WHICH WILL BE TREATED AS THE YIELD FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES). THE YIELD FOR ACCRUING ORIGINAL
ISSUE DISCOUNT FOR NON-TAX PURPOSES IS 0.5% PER YEAR (COMPUTED ON A SEMI-ANNUAL
BOND EQUIVALENT BASIS) CALCULATED FROM NOVEMBER 21, 2002, EXCLUDING ANY
CONTINGENT INTEREST.
THE ISSUER AGREES, AND BY ACCEPTING A BENEFICIAL OWNERSHIP
INTEREST IN THIS SECURITY EACH HOLDER OF THIS SECURITY WILL BE DEEMED TO HAVE
AGREED, FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO TREAT THIS SECURITY
AS A DEBT INSTRUMENT THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE
"CONTINGENT PAYMENT REGULATIONS"), (2) TO TREAT THE FAIR MARKET VALUE OF ANY
STOCK RECEIVED UPON ANY CONVERSION OF THIS SECURITY AS A CONTINGENT PAYMENT FOR
PURPOSES OF THE CONTINGENT PAYMENT REGULATIONS, AND (3) TO ACCRUE INTEREST WITH
RESPECT TO THE SECURITY AS ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES ACCORDING TO THE "NONCONTINGENT BOND METHOD," SET FORTH IN
THE CONTINGENT PAYMENT REGULATIONS, AND TO BE BOUND BY THE ISSUER'S
DETERMINATION OF THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE," WITHIN
THE MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH RESPECT TO THIS
SECURITY. THE ISSUER AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF THIS SECURITY,
UPON WRITTEN REQUEST, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD
TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH WRITTEN
REQUEST SHOULD BE SENT TO THE ISSUER AT THE FOLLOWING ADDRESS: 3M COMPANY, 3M
CENTER, ST. PAUL, MN 55144, ATTENTION: CORPORATE SECRETARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
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PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST
COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED
THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES
TO OFFER, SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH 3M COMPANY (THE
"COMPANY" OR THE "ISSUER") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
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SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
ABOVE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
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3M COMPANY
Liquid Yield OptionTM Note due 2032
(Zero Coupon-Senior)
No. R- CUSIP: 88579YAA9
Issue Date: November 21, 2002 Original Issue Discount: $139.13
Issue Price: $860.87 (for each $1,000
Principal (for each $1,000 Principal
Amount at Maturity) Amount at Maturity)
3M COMPANY, a Delaware Corporation, promises to pay to Cede &
Co. or registered assigns, the Principal Amount at Maturity of [____] DOLLARS
($[____]) on November 21, 2032.
This Security shall not bear interest except as specified on
the other side of this Security. Original Issue Discount will accrue as
specified on the other side of this Security. This Security is convertible as
specified on the other side of this Security.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated: November 21, 2002 3M COMPANY
By:
--------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated: November 21, 2002
Citibank, N.A.,
as Trustee, certifies that this
is one of the Securities referred
to in the within-mentioned Indenture.
By:_________________________________
Authorized Officer
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[FORM OF REVERSE SIDE OF LYON]
Liquid Yield Option(TM) Note due 2032
(Zero Coupon-Senior)
1. Interest.
This Security shall not bear interest, except as specified in this
paragraph or in paragraph 5 hereof. If the Principal Amount at Maturity hereof
or any portion of such Principal Amount at Maturity is not paid when due
(whether upon acceleration pursuant to Section 6.02 of the Indenture, upon the
date set for payment of the Redemption Price pursuant to paragraph 6 hereof,
upon the date set for payment of the Purchase Price or Change in Control
Purchase Price pursuant to paragraph 7 hereof or upon the Stated Maturity of
this Security) or if any contingent interest due hereon is not paid when due in
accordance with paragraph 5 hereof, then in each such case the overdue amount
shall, to the extent permitted by law, bear interest at the rate of 0.5% per
annum, compounded semiannually, which interest shall accrue from the date such
overdue amount was originally due to the date payment of such amount, including
interest thereon, has been made or duly provided for. All such interest shall be
payable on demand. The accrual of such interest on overdue amounts shall be in
lieu of, and not in addition to, the continued accrual of Original Issue
Discount.
Original Issue Discount (the difference between the Issue Price and the
Principal Amount at Maturity of the Security), in the period during which a
Security remains outstanding, shall accrue at 0.5% per annum, on a semiannual
bond equivalent basis using a 360-day year composed of twelve 30-day months,
from the Issue Date of this Security.
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of Redemption Prices, Purchase Prices, Change in
Control Purchase Prices and Principal Amount at Maturity to Holders who
surrender Securities to a Paying Agent to collect such payments in respect of
the Securities. The Company will pay any cash amounts in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may make such cash payments by check payable
in such money.
3. Paying Agent, Conversion Agent, Registrar and Bid Solicitation Agent.
Initially, Citibank, N.A. (the "Trustee"), will act as Paying Agent,
Conversion Agent, Registrar and Bid Solicitation Agent. The Company may appoint
and change any Paying Agent, Conversion Agent, Registrar or co-registrar or Bid
Solicitation Agent without notice, other than notice to the Trustee. The Company
or any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent, Registrar or co-registrar. None of the Company, any of its
Subsidiaries or any of their Affiliates shall act as Bid Solicitation Agent.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
November 21, 2002 (the "Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust
A-1-5
Indenture Act of 1939, as in effect from time to time (the "TIA"). Capitalized
terms used herein and not defined herein have the meanings ascribed thereto in
the Indenture. The Securities are subject to all such terms, and Securityholders
are referred to the Indenture for a statement of those terms.
The Securities are general unsecured and unsubordinated obligations of
the Company limited to $639,000,000 aggregate Principal Amount at Maturity
(subject to Section 2.07 of the Indenture). The Indenture does not limit other
indebtedness of the Company, secured or unsecured.
5. Contingent Interest.
Subject to the accrual and record date provisions specified in this
Paragraph 5, the Company shall pay contingent cash interest to the Holders
during any six-month period (a "Contingent Interest Period") from November 22 to
May 21 and from May 22 to November 21, commencing on or after November 22, 2007,
if the average LYON Market Price for the Applicable Five Trading Day Period with
respect to such Contingent Interest Period equals 130% or more of the sum of the
Issue Price of a Security and Original Issue Discount accrued thereon to the day
immediately preceding the first day of the relevant Contingent Interest Period.
The amount of contingent interest payable per $1,000 Principal Amount
at Maturity hereof in respect of any Quarterly Period within a Contingent
Interest Period shall equal the greater of (x) Regular Cash Dividends paid by
the Company per share of Common Stock during that Quarterly Period multiplied by
the number of shares of Common Stock into which $1,000 Principal Amount at
Maturity hereof is convertible pursuant to paragraph 9 hereof as of the accrual
date for such contingent interest or (y) $0.62 multiplied by 4.7301, provided
that if the Company does not pay cash dividends during a semiannual period, the
Company will pay contingent interest semiannually at a rate of 0.5% of the
average LYON Market Price for the Applicable Five Trading Day Period.
Contingent interest, if any, will accrue and be payable to Holders as
of the record date for the related Regular Cash Dividend or, if no Regular Cash
Dividend is paid by the Company during a Quarterly Period, to Holders as of the
15th day (whether or not a Business Day) preceding the last day of the relevant
Contingent Interest Period. Such payments shall be paid on the payment date of
the related Regular Cash Dividend or, if no Regular Cash Dividend is paid by the
Company during any Quarterly Period, on the last day of the relevant Contingent
Interest Period. Original Issue Discount will continue to accrue at 0.5% per
annum whether or not contingent interest is paid.
"Applicable Five Trading Day Period" means, with respect to any
Contingent Interest Period, the five Trading Days ending on the second Trading
Day immediately preceding the first day of such Contingent Interest Period;
provided, however, if the Company shall have declared a Regular Cash Dividend on
its Common Stock that is payable during such Contingent Interest Period but for
which the record date for determining stockholders entitled thereto precedes the
first day of such Contingent Interest Period, then "Applicable Five Trading Day
Period" shall mean, with respect to such Contingent Interest Period, the five
Trading Days ending on the second Trading Day immediately preceding such record
date.
A-1-6
"Regular Cash Dividends" means quarterly or other periodic cash
dividends on the Company's Common Stock as declared by the Company's Board of
Directors as part of its cash dividend payment practices and that are not
designated by them as extraordinary or special or other nonrecurring dividends.
"LYON Market Price" means, as of any date of determination, the average
of the secondary market bid quotations per $1,000 Principal Amount at Maturity
obtained by the Bid Solicitation Agent for $10 million Principal Amount at
Maturity of Securities at approximately 4:00 p.m., New York City time, on such
determination date from three recognized securities dealers in The City of New
York (none of which shall be an Affiliate of the Company) (which shall be J.P.
Morgan Securities Inc., Goldman Sachs & Co. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, unless instructed otherwise by the Company) selected by the
Company; provided, however, if (a) at least three such bids are not obtained by
the Bid Solicitation Agent or (b) in the Company's reasonable judgment, the bid
quotations are not indicative of the secondary market value of the Securities as
of such determination date, then the LYON Market Price for such determination
date shall equal (i) the Conversion Rate in effect as of such determination date
multiplied by (ii) the average Sale Price of the Common Stock for the five
Trading Days ending on such determination date, appropriately adjusted to take
into account the occurrence, during the period commencing on the first of such
Trading Days during such five Trading Day period and ending on such
determination date, of any event described in Section 10.06, 10.07 or 10.08
(subject to the conditions set forth in Sections 10.09 and 10.10) of the
Indenture.
The term "Quarterly Period" shall mean, with respect to any Contingent
Interest Period, any quarterly period within such Contingent Interest Period
extending from November 22 to February 21, from February 22 to May 21, from May
22 to August 21 or from August 22 to November 21.
Upon determination that Holders will be entitled to receive contingent
interest which may become payable during a Contingent Interest Period, on or
prior to the first day of such Contingent Interest Period, the Company shall
promptly notify the Trustee of such determination and shall issue a press
release and publish such information on its web site on the World Wide Web or
through such other public medium as the Company may use at that time as soon as
practicable. The Company shall also notify the Trustee of the declaration of any
Regular Cash Dividends and the related record and payment dates.
The determination of the amount of contingent interest, if any, and the
payment thereof is the sole responsibility of the Company.
6. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. The Securities are
redeemable for cash as a whole, at any time, or in part from time to time at the
option of the Company in accordance with the Indenture at the Redemption Prices
set forth below, provided that the Securities are not redeemable prior to
November 21, 2007.
A-1-7
The table below shows Redemption Prices of a Security per $1,000
Principal Amount at Maturity on the dates shown below and at Stated Maturity,
which prices reflect accrued Original Issue Discount calculated to each such
date. The Redemption Price of a Security redeemed between such dates shall
include an additional amount reflecting the additional Original Issue Discount
accrued since the preceding date in the table and until, but not including, the
Redemption Date.
(2) (3)
(1) ACCRUED REDEMPTION
LYON ORIGINAL PRICE
REDEMPTION DATE ISSUE PRICE ISSUE DISCOUNT (1)+(2)
November 21: ----------- -------------- ----------
2007...................... $860.87 $21.77 $882.64
2008...................... $860.87 $26.18 $887.05
2009...................... $860.87 $30.62 $891.49
2010...................... $860.87 $35.09 $895.96
2011...................... $860.87 $39.57 $900.44
2012...................... $860.87 $44.08 $904.95
2013...................... $860.87 $48.61 $909.48
2014...................... $860.87 $53.16 $914.03
2015...................... $860.87 $57.74 $918.61
2016...................... $860.87 $62.34 $923.21
2017...................... $860.87 $66.96 $927.83
2018...................... $860.87 $71.61 $932.48
2019...................... $860.87 $76.27 $937.14
2020...................... $860.87 $80.97 $941.84
2021...................... $860.87 $85.68 $946.55
2022...................... $860.87 $90.42 $951.29
2023...................... $860.87 $95.18 $956.05
2024...................... $860.87 $99.97 $960.84
2025...................... $860.87 $104.78 $965.65
2026...................... $860.87 $109.61 $970.48
2027...................... $860.87 $114.47 $975.34
2028...................... $860.87 $119.35 $980.22
2029...................... $860.87 $124.26 $985.13
2030...................... $860.87 $129.19 $990.06
2031...................... $860.87 $134.15 $995.02
At Stated Maturity........ $860.87 $139.13 $1,000.00
In addition to the Redemption Price payable with respect to all
Securities or portions thereof to be redeemed as of a Redemption Date, the
Holders of such Securities (or portions thereof) shall be entitled to receive
accrued and unpaid contingent interest, if any, with respect thereto, which
interest shall be paid in cash on the Redemption Date.
A-1-8
7. Purchase by the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Securities held
by such Holder on the following Purchase Dates and at the following Purchase
Prices per $1,000 Principal Amount at Maturity, upon delivery of a Purchase
Notice containing the information set forth in the Indenture, at any time from
the opening of business on the date that is 20 Business Days prior to such
Purchase Date until the close of business on the Business Day immediately
preceding such Purchase Date and upon delivery of the Securities to the Paying
Agent by the Holder as set forth in the Indenture.
November 21, 2005 $873.86
November 21, 2007 882.64
November 21, 2012 904.95
November 21, 2017 927.83
November 21, 2022 951.29
November 21, 2027 975.34
The Company may, from time to time, declare additional Purchase Dates
and corresponding Purchase Prices.
The Purchase Price (equal to the Issue Price plus accrued Original
Issue Discount to the Purchase Date) may be paid, at the option of the Company,
in cash or by the issuance and delivery of shares of Common Stock of the
Company, or in any combination thereof.
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase the Securities
held by such Holder no later than 35 Business Days after the occurrence of a
Change in Control of the Company, but in no event prior to the date on which
such Change in Control occurs, on or prior to November 21, 2007 for a Change in
Control Purchase Price equal to the Issue Price plus accrued Original Issue
Discount to the Change in Control Purchase Date, which Change in Control
Purchase Price shall be paid in cash.
A third party may make the offer and purchase of the Securities in lieu
of the Company in accordance with the Indenture.
In addition to the Purchase Price or Change in Control Purchase Price,
as the case may be, payable with respect to all Securities or portions thereof
to be purchased as of the Purchase Date or the Change in Control Purchase Date,
as the case may be, the Holders of such Securities (or portions thereof) shall
be entitled to receive any accrued and unpaid contingent interest with respect
thereto, which shall be paid in cash promptly following the later of the
Purchase Date or the Change in Control Purchase Date, as the case may be and the
time of delivery of such Securities to the Paying Agent pursuant to the
Indenture.
A-1-9
Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture.
If cash (and/or securities if permitted under the Indenture) sufficient
to pay the Purchase Price or Change in Control Purchase Price, as the case may
be, of, together with any accrued and unpaid contingent interest with respect
to, all Securities or portions thereof to be purchased as of the Purchase Date
or the Change in Control Purchase Date, as the case may be, is deposited with
the Paying Agent on the Business Day following the Purchase Date or the Change
in Control Purchase Date, as the case may be, Original Issue Discount and any
contingent interest shall cease to accrue on such Securities (or portions
thereof) immediately after such Purchase Date or Change in Control Purchase
Date, as the case may be, and the Holder thereof shall have no other rights as
such (other than the right to receive the Purchase Price or Change in Control
Purchase Price, as the case may be, and any accrued and unpaid contingent
interest upon surrender of such Security).
8. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Securities to be redeemed
at the Holder's registered address. If money sufficient to pay the Redemption
Price of, and accrued and unpaid contingent interest, if any, with respect to,
all Securities (or portions thereof) to be redeemed on the Redemption Date is
deposited with the Paying Agent prior to or on the Redemption Date, on such
Redemption Date, Original Issue Discount and contingent interest, if any, shall
cease to accrue on such Securities or portions thereof. Securities in
denominations larger than $1,000 of Principal Amount at Maturity may be redeemed
in part but only in integral multiples of $1,000 of Principal Amount at
Maturity.
9. Conversion.
Subject to the provisions of this Paragraph 9, a Holder of a Security
may convert it into Common Stock of the Company at any time before the close of
business on November 20, 2032. If the Security is called for redemption, the
Holder may convert it only until the close of business on the second Business
Day immediately preceding the Redemption Date. A Security in respect of which a
Holder has delivered a Purchase Notice or Change in Control Purchase Notice
exercising the option of such Holder to require the Company to purchase such
Security may be converted only if such notice of exercise is withdrawn in
accordance with the terms of the Indenture.
The initial Conversion Rate is 4.7301 shares of Common Stock per $1,000
Principal Amount at Maturity, subject to adjustment in certain events described
in the Indenture. The Company will deliver cash or a check in lieu of any
fractional share of Common Stock.
(a) CONVERSION BASED ON COMMON STOCK PRICE. Subject to the
provisions of this Paragraph 9, Holders may convert the Securities into Common
Stock in any calendar quarter commencing after March 31, 2003, if, as of the
last day of the preceding calendar quarter, the Sale Price of the Common Stock
for at least 20 Trading Days in a period of 30 consecutive
A-1-10
Trading Days ending on the last Trading Day of such preceding calendar quarter
is more than 130% of the accreted conversion price per share of Common Stock on
the last day of such preceding calendar quarter.
The "accreted conversion price" per share of Common Stock as of any day
equals the quotient of:
o the Issue Price of a Security and Accrued Original Issue Discount
to that day, divided by
o the number of shares of Common Stock issuable upon conversion of
$1,000 Principal Amount at Maturity of Securities on that day.
(b) CONVERSION BASED ON CREDIT RATING DOWNGRADE. Subject to the
provisions of this Paragraph 9, Holders may convert the Securities into Common
Stock on a Conversion Date during any period in which the credit rating assigned
to the Securities by a Rating Agency is at or below the Applicable Rating.
"Rating Agency" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies Inc., and its successors ("Standard & Poor's"), or Moody's
Investors Service ("Moody's"), or if neither Standard & Poor's nor Moody's are
making ratings of the Securities publicly available, a nationally recognized
U.S. rating agency or agencies, as the case may be, selected by the Company,
which will be substituted for Standard & Poor's or Moody's, as the case may be.
"Applicable Rating" means, in the case of Standard & Poor's, BBB+, or in the
case of Moody's, Baa1 (or their respective equivalents under any successor
ratings categories of Standard & Poor's or Moody's), or the equivalent in
respect of ratings categories of any Rating Agencies substituted for Standard &
Poor's or Moody's.
(c) CONVERSION BASED ON REDEMPTION. Subject to the provisions of
this Paragraph 9, a Holder may convert into Common Stock a Security or portion
of a Security which has been called for redemption pursuant to Paragraph 6
hereof, even if the Securities are not otherwise convertible at such time, but
such Securities may be surrendered for conversion only until the close of
business on the second Business Day immediately preceding the Redemption Date.
(d) CONVERSION UPON OCCURRENCE OF CERTAIN CORPORATE TRANSACTIONS.
Subject to the provisions of this Paragraph 9, in the event the Company is a
party to a consolidation, merger or binding share exchange or a transfer of all
or substantially all assets of the Company pursuant to which the Common Stock
would be converted into cash, securities or other property as set forth in
Section 10.14 of the Indenture, the Securities may be surrendered for conversion
at any time from and after the date which is 15 days prior to the anticipated
effective date until 15 days after the actual effective date of such
transaction, and at the effective date of such transaction the right to convert
a Security into Common Stock will be deemed to have changed into a right to
convert it into the kind and amount of cash, securities or other assets of the
Company or another person which the holder would have received if the holder had
converted its Security immediately prior to the transaction.
A-1-11
A Holder's right to convert the Securities into Common Stock of the
Company is also subject to the Company's right to elect to pay such Holder the
amount of cash set forth in the next succeeding sentence (or an equivalent
amount in a combination of cash and shares of Common Stock), in lieu of
delivering all or part of such Common Stock; provided, however, that if such
payment of cash is not permitted pursuant to the provisions of the Indenture,
the Company shall deliver Common Stock (and cash in lieu of fractional shares of
Common Stock) in accordance with the Indenture, whether or not the Company has
delivered a notice pursuant to the Indenture to the effect that the Securities
will be paid in cash. The amount of cash to be paid for each $1,000 Principal
Amount at Maturity of Securities shall be equal to the average Sale Price of a
share of Common Stock of the Company for the five consecutive Trading Days
immediately following (i) the date of the Company's notice of its election to
deliver cash upon conversion, if the Company has not given a notice of
redemption pursuant to the Indenture, or (ii) the Conversion Date, in the case
of a conversion following such a notice of redemption specifying an intent to
deliver cash or a combination of cash and Common Stock upon conversion, in
either case multiplied by the Conversion Rate in effect on such Conversion Date.
If the Company shall elect to make such payment wholly in shares of Common
Stock, then such shares shall be delivered through the Conversion Agent to
Holders surrendering Securities as promptly as practicable but in any event no
later than the fifth Business Day following the Conversion Date. If, however,
the Company elects to make any portion of such payment in cash, then the
payment, including any delivery of shares of Common Stock, shall be made to
Holders surrendering Securities no later than the tenth Business Day following
the Conversion Date.
The Company may not pay cash in lieu of delivering all or part of such
share of Common Stock upon the conversion of any Securities pursuant to the
terms of the Indenture (other than cash in lieu of fractional shares) if there
has occurred (prior to, on or after, as the case may be, the Conversion Date or
the date on which the Company delivers its notice specifying whether each
Conversion shall be converted into shares of Common Stock or cash) and is
continuing an Event of Default (other than a default in such payment on such
Securities).
Accrued and unpaid contingent interest will not be paid in cash on
Securities that are converted but will be paid in the manner provided in the
following paragraph; provided, however that Securities surrendered for
conversion during the period from the close of business on any date on which
contingent interest accrues to the opening of business on the date on which such
contingent interest is payable, shall be entitled to receive such contingent
interest payable on such Securities on the corresponding Interest Payment Date
or the date on which such contingent interest is payable and (except Securities
with respect to which the Company has mailed a notice of redemption) Securities
surrendered for conversion during such periods must be accompanied by payment of
an amount equal to the contingent interest with respect thereto that the
registered Holder is to receive.
A Holder may convert a portion of a Security if the Principal Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. No payment
or adjustment will be made for dividends on the Common Stock except as provided
in the Indenture. On conversion of a Security, accrued Original Issue Discount
attributable to the period from the Issue Date through the Conversion Date,
accrued Tax OID and (except as provided above) accrued contingent interest with
respect to the converted Security shall not be cancelled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the Holder thereof
through the delivery of the
A-1-12
Common Stock (together with the cash payment, if any, in lieu of fractional
shares), or cash or a combination of cash and Common Stock in lieu thereof, in
exchange for the Security being converted pursuant to the terms hereof; and the
fair market value of such shares of Common Stock (together with any such cash
payment in lieu of fractional shares), or cash or a combination of cash and
Common Stock in lieu thereof, shall be treated as delivered, to the extent
thereof, first in exchange for Original Issue Discount and Tax OID accrued
through the Conversion Date and accrued contingent interest, if any, and the
balance, if any, of such cash and/or the fair market value of such Common Stock
(and any such cash payment in lieu of fractional shares), or cash in lieu
thereof, shall be treated as delivered in exchange for the Issue Price of the
Security being converted pursuant to the provisions hereof.
The Company agrees, and each Holder and any beneficial owner of a
Security by its purchase thereof shall be deemed to agree, to treat, for United
States federal income tax purposes, the fair market value of the Common Stock
received upon the conversion of a Security (together with any cash payment in
lieu of fractional shares) or cash, or a combination of cash and Common Stock as
a contingent payment on the Security for purposes of Treasury Regulation Section
1.1275-4(b).
To convert a Security, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the
Security to the Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (4) pay any transfer or similar tax, if required.
The Conversion Rate will be adjusted for dividends or distributions on
Common Stock payable in Common Stock or other Capital Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock for a period
expiring within 60 days of the record date for such distribution at less than
the Sale Price of the Common Stock at the Time of Determination; and
distributions to such holders of assets (including shares of Capital Stock of a
Subsidiary) or debt securities of the Company or certain rights to purchase
securities of the Company (excluding certain cash dividends or distributions).
However, no adjustment need be made if Securityholders may participate in the
transaction or in certain other cases. The Company from time to time may
voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a
Security into Common Stock may be changed into a right to convert it into the
kind and amount of securities, cash or other assets of the Company or another
person which the Holder would have received if the Holder had converted its
Securities immediately prior to the transaction.
10. Conversion Arrangement on Call for Redemption.
Any Securities called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such Securities at an amount not less than the
Redemption Price, by one or more investment bankers
A-1-13
or other purchasers who may agree with the Company to purchase such Securities
from the Holders, to convert them into Common Stock of the Company and to make
payment for such Securities to the Trustee in trust for such Holders.
11. Defaulted Interest.
Except as otherwise specified with respect to the Securities, any
Defaulted Interest on any Security shall forthwith cease to be payable to the
registered Holder thereof on the relevant accrual date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company as provided
for in Section 11.02 of the Indenture.
12. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount at Maturity and integral multiples
of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Securities selected for redemption (except, in
the case of a Security to be redeemed in part, the portion of the Security not
to be redeemed) or any Securities in respect of which a Purchase Notice or
Change in Control Purchase Notice has been given and not withdrawn (except, in
the case of a Security to be purchased in part, the portion of the Security not
to be purchased) or any Securities for a period of 15 days before the mailing of
a notice of redemption of Securities to be redeemed.
13. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of
this Security for all purposes.
14. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property laws. After return to the Company,
Holders entitled to the money or securities must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another person.
15. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding and (ii) certain Defaults may be waived with
the written consent of the Holders of a majority in aggregate Principal Amount
at Maturity of the Securities at the time outstanding. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or
A-1-14
inconsistency, or to comply with Article 5 or Section 10.14 of the Indenture, to
secure the Company's obligations under this Security or to add to the Company's
covenants for the benefit of the Securityholders or to surrender any right or
power conferred, or to comply with any requirement of the SEC in connection with
the qualification of the Indenture under the Trust Indenture Act of 1939 and any
amendment thereof, or as necessary in connection with the registration of the
Securities under the Securities Act or to make any change that does not
adversely affect the rights of any Holders.
16. Defaults and Remedies.
Under the Indenture, Events of Default include (i) default in the
payment of contingent interest when the same becomes due and payable, which
default continues for 30 days; (ii) default in payment of the Principal Amount
at Maturity, Issue Price plus accrued Original Issue Discount, Redemption Price,
Purchase Price or Change in Control Purchase Price, as the case may be, in
respect of the Securities when the same becomes due and payable; (iii) failure
by the Company to comply with other agreements in the Indenture or the
Securities, subject to notice and lapse of time; (iv) the acceleration of Debt
in an amount in excess of $20,000,000 because of a default with respect to such
Debt without such Debt having been discharged or such acceleration having been
cured, waived, rescinded or annulled, subject to notice and lapse of time;
provided, however, that if any such failure or acceleration referred to above
shall cease or be cured, waived, rescinded or annulled, then the Event of
Default by reason thereof shall be deemed not to have occurred; and (v) certain
events of bankruptcy or insolvency. If an Event of Default occurs and is
continuing, the Trustee, or the Holders of at least 25% in aggregate Principal
Amount at Maturity of the Securities at the time outstanding, may declare the
Issue Price plus the Original Issue Discount through the date of such
declaration, and any accrued and unpaid interest (including contingent interest)
if any, through the date of such declaration, on all the Securities to be due
and payable immediately. Certain events of bankruptcy or insolvency are Events
of Default which will result in the Issue Price plus the Original Issue Discount
on the Securities, and any accrued and unpaid interest (including contingent
interest) if any, through the occurrence of such event, becoming due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security reasonably satisfactory
to it. Subject to certain limitations, Holders of a majority in aggregate
Principal Amount at Maturity of the Securities at the time outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default (except a Default
in payment of amounts specified in clause (i) or (ii) above) if it determines
that withholding notice is in their interests.
17. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
A-1-15
18. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
19. Authentication.
This Security shall not be valid until an authorized officer of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
20. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. Original Issue Discount Information Reporting Requirements.
In accordance with the United States Treasury Regulation Section
1.1275-3, a Holder may obtain the projected payment schedule by submitting a
written request for such information to the following representative of the
Company: 3M Company, 3M Center, St. Paul, Minnesota 55144, Attention: Corporate
Secretary.
22. GOVERNING LAW.
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
-----------------
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
3M Company
3M Office of General Counsel
3M Center
St. Paul, MN 55133
Telephone No.: [ ]
Facsimile No.: (651) 736-9469
A-1-16
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's soc. sec. or tax ID no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint
___________________________ agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check the box: [ ]
To convert only part of this Security, state the Principal Amount at Maturity to
be converted (which must be $1,000 or an integral multiple of $1,000):
$______________
If you want the stock certificate made out in another person's name, fill in the
form below:
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's soc. sec. or tax ID no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
___________________________________________________________________________Date:
________________________________Your Signature:_________________________________
________________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
A-1-17
EXHIBIT A-2
[FORM OF IAI GLOBAL SECURITY]
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT AND THE ISSUE DATE OF THIS SECURITY IS NOVEMBER 21, 2002. IN ADDITION,
THIS SECURITY IS SUBJECT TO UNITED STATES FEDERAL INCOME TAX REGULATIONS
GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272,
1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH SECURITY IS
$860.87 PER $1,000 OF PRINCIPAL AMOUNT AND THE COMPARABLE YIELD IS 4.55%,
COMPOUNDED SEMI-ANNUALLY (WHICH WILL BE TREATED AS THE YIELD FOR UNITED STATES
FEDERAL INCOME TAX PURPOSES). THE YIELD FOR ACCRUING ORIGINAL ISSUE DISCOUNT FOR
NON-TAX PURPOSES IS 0.5% PER YEAR (COMPUTED ON A SEMI-ANNUAL BOND EQUIVALENT
BASIS) CALCULATED FROM NOVEMBER 21, 2002, EXCLUDING ANY CONTINGENT INTEREST.
THE ISSUER AGREES, AND BY ACCEPTING A BENEFICIAL OWNERSHIP INTEREST IN
THIS SECURITY EACH HOLDER OF THIS SECURITY WILL BE DEEMED TO HAVE AGREED, FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO TREAT THIS SECURITY AS A DEBT
INSTRUMENT THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE "CONTINGENT PAYMENT
REGULATIONS"), (2) TO TREAT THE FAIR MARKET VALUE OF ANY STOCK RECEIVED UPON ANY
CONVERSION OF THIS SECURITY AS A CONTINGENT PAYMENT FOR PURPOSES OF THE
CONTINGENT PAYMENT REGULATIONS, AND (3) TO ACCRUE INTEREST WITH RESPECT TO THE
SECURITY AS ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES ACCORDING TO THE "NONCONTINGENT BOND METHOD," SET FORTH IN THE
CONTINGENT PAYMENT REGULATIONS, AND TO BE BOUND BY THE ISSUER'S DETERMINATION OF
THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE," WITHIN THE MEANING OF
THE CONTINGENT PAYMENT REGULATIONS, WITH RESPECT TO THIS SECURITY. THE ISSUER
AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF THIS SECURITY, UPON WRITTEN REQUEST,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD TO MATURITY, COMPARABLE
YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO
THE ISSUER AT THE FOLLOWING ADDRESS: 3M COMPANY, 3M CENTER, ST. PAUL, MN 55144,
ATTENTION: CORPORATE SECRETARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
A-2-1
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.
[INCLUDE IF SECURITY IS A CERTIFICATED SECURITY TO BE HELD BY AN
INSTITUTIONAL ACCREDITED INVESTOR IN CONNECTION WITH ANY TRANSFER, THE HOLDER
WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOLLOWING RESTRICTIONS.]
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED
THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH 3M COMPANY (THE "COMPANY"
OR THE "ISSUER") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO
AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
A-2-2
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
ABOVE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
A-2-3
3M COMPANY
Liquid Yield OptionTM Note due 2032
(Zero Coupon-Senior)
No. R-3 CUSIP: 88579YAC5
Issue Date: November 21, 2002 Original Issue Discount: $285.77
Issue Price: $860.87 (for each $1,000
Principal (for each $1,000 Principal
Amount at Maturity) Amount at Maturity)
3M COMPANY, a Delaware Corporation, promises to pay to Cede &
Co. or registered assigns, the Principal Amount at Maturity of NO DOLLARS
($0.00) on November 21, 2032.
This Security shall not bear interest except as specified on
the other side of this Security. Original Issue Discount will accrue as
specified on the other side of this Security. This Security is convertible as
specified on the other side of this Security.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated: November 21, 2002. 3M COMPANY
By:
------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated: November 21, 2002
Citibank, N.A.,
as Trustee, certifies that this
is one of the Securities referred
to in the within-mentioned Indenture.
By:__________________________________
Authorized Officer
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[FORM OF REVERSE SIDE OF LYON]
Liquid Yield OptionTM Note due 2032
(Zero Coupon-Senior)
1. Interest.
This Security shall not bear interest, except as specified in this
paragraph or in paragraph 5 hereof. If the Principal Amount at Maturity hereof
or any portion of such Principal Amount at Maturity is not paid when due
(whether upon acceleration pursuant to Section 6.02 of the Indenture, upon the
date set for payment of the Redemption Price pursuant to paragraph 6 hereof,
upon the date set for payment of the Purchase Price or Change in Control
Purchase Price pursuant to paragraph 7 hereof or upon the Stated Maturity of
this Security) or if any contingent interest due hereon is not paid when due in
accordance with paragraph 5 hereof, then in each such case the overdue amount
shall, to the extent permitted by law, bear interest at the rate of 0.5% per
annum, compounded semiannually, which interest shall accrue from the date such
overdue amount was originally due to the date payment of such amount, including
interest thereon, has been made or duly provided for. All such interest shall be
payable on demand. The accrual of such interest on overdue amounts shall be in
lieu of, and not in addition to, the continued accrual of Original Issue
Discount.
Original Issue Discount (the difference between the Issue Price and the
Principal Amount at Maturity of the Security), in the period during which a
Security remains outstanding, shall accrue at [ ]% per annum, on a semiannual
bond equivalent basis using a 360-day year composed of twelve 30-day months,
from the Issue Date of this Security.
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of Redemption Prices, Purchase Prices, Change in
Control Purchase Prices and Principal Amount at Maturity to Holders who
surrender Securities to a Paying Agent to collect such payments in respect of
the Securities. The Company will pay any cash amounts in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may make such cash payments by check payable
in such money.
3. Paying Agent, Conversion Agent, Registrar and Bid Solicitation Agent.
Initially, Citibank, N.A. (the "Trustee"), will act as Paying Agent,
Conversion Agent, Registrar and Bid Solicitation Agent. The Company may appoint
and change any Paying Agent, Conversion Agent, Registrar or co-registrar or Bid
Solicitation Agent without notice, other than notice to the Trustee. The Company
or any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent, Registrar or co-registrar. None of the Company, any of its
Subsidiaries or any of their Affiliates shall act as Bid Solicitation Agent.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
November 21, 2002 (the "Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust
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Indenture Act of 1939, as in effect from time to time (the "TIA"). Capitalized
terms used herein and not defined herein have the meanings ascribed thereto in
the Indenture. The Securities are subject to all such terms, and Securityholders
are referred to the Indenture for a statement of those terms.
The Securities are general unsecured and unsubordinated obligations of
the Company limited to $639,000,000 aggregate Principal Amount at Maturity
(subject to Section 2.07 of the Indenture). The Indenture does not limit other
indebtedness of the Company, secured or unsecured.
5. Contingent Interest.
Subject to the accrual and record date provisions specified in this
paragraph 5, the Company shall pay contingent cash interest to the Holders
during any six-month period (a "Contingent Interest Period") from November 22 to
May 21 and from May 22 to November 21, commencing on or after November 22, 2007,
if the average LYON Market Price for the Applicable Five Trading Day Period with
respect to such Contingent Interest Period equals 130% or more of the sum of the
Issue Price of a Security and Original Issue Discount accrued thereon to the day
immediately preceding the first day of the relevant Contingent Interest Period.
The amount of contingent interest payable per $1,000 Principal Amount
at Maturity hereof in respect of any Quarterly Period within a Contingent
Interest Period shall equal the greater of (x) Regular Cash Dividends paid by
the Company per share of Common Stock during that Quarterly Period multiplied by
the number of shares of Common Stock into which $1,000 Principal Amount at
Maturity hereof is convertible pursuant to paragraph 9 hereof as of the accrual
date for such contingent interest or (y) $0.62 multiplied by 4.7301, provided
that if the Company does not pay cash dividends during a semiannual period, the
Company will pay contingent interest semiannually at a rate of [0.125]% of the
average LYON Market Price for the Applicable Five Trading Day Period.
Contingent interest, if any, will accrue and be payable to Holders as
of the record date for the related Regular Cash Dividend or, if no Regular Cash
Dividend is paid by the Company during a Quarterly Period, to Holders as of the
15th day (whether or not a Business Day) preceding the last day of the relevant
Contingent Interest Period. Such payments shall be paid on the payment date of
the related Regular Cash Dividend or, if no Regular Cash Dividend is paid by the
Company during any Quarterly Period, on the last day of the relevant Contingent
Interest Period. Original Issue Discount will continue to accrue at 1.125% per
annum whether or not contingent interest is paid.
"Applicable Five Trading Day Period" means, with respect to any
Contingent Interest Period, the five Trading Days ending on the second Trading
Day immediately preceding the first day of such Contingent Interest Period;
provided, however, if the Company shall have declared a Regular Cash Dividend on
its Common Stock that is payable during such Contingent Interest Period but for
which the record date for determining stockholders entitled thereto precedes the
first day of such Contingent Interest Period, then "Applicable Five Trading Day
Period" shall mean, with respect to such Contingent Interest Period, the five
Trading Days ending on the second Trading Day immediately preceding such record
date.
A-2-6
"Regular Cash Dividends" means quarterly or other periodic cash
dividends on the Company's Common Stock as declared by the Company's Board of
Directors as part of its cash dividend payment practices and that are not
designated by them as extraordinary or special or other nonrecurring dividends.
"LYON Market Price" means, as of any date of determination, the average
of the secondary market bid quotations per $1,000 Principal Amount at Maturity
obtained by the Bid Solicitation Agent for $10 million Principal Amount at
Maturity of Securities at approximately 4:00 p.m., New York City time, on such
determination date from three recognized securities dealers in The City of New
York (none of which shall be an Affiliate of the Company) (which shall be J.P.
Morgan Securities Inc., Goldman Sachs & Co. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, unless instructed otherwise by the Company) selected by the
Company; provided, however, if (a) at least three such bids are not obtained by
the Bid Solicitation Agent or (b) in the Company's reasonable judgment, the bid
quotations are not indicative of the secondary market value of the Securities as
of such determination date, then the LYON Market Price for such determination
date shall equal (i) the Conversion Rate in effect as of such determination date
multiplied by (ii) the average Sale Price of the Common Stock for the five
Trading Days ending on such determination date, appropriately adjusted to take
into account the occurrence, during the period commencing on the first of such
Trading Days during such five Trading Day period and ending on such
determination date, of any event described in Section 10.06, 10.07 or 10.08
(subject to the conditions set forth in Sections 10.09 and 10.10) of the
Indenture.
The term "Quarterly Period" shall mean, with respect to any Contingent
Interest Period, any quarterly period within such Contingent Interest Period
extending from November 22 to February 21, from February 22 to May 21, from May
22 to August 21 or from August 22 to November 21.
Upon determination that Holders will be entitled to receive contingent
interest which may become payable during a Contingent Interest Period, on or
prior to the first day of such Contingent Interest Period, the Company shall
promptly notify the Trustee of such determination and shall issue a press
release and publish such information on its web site on the World Wide Web or
through such other public medium as the Company may use at that time as soon as
practicable. The Company shall also notify the Trustee of the declaration of any
Regular Cash Dividends and the related record and payment dates.
The determination of the amount of contingent interest, if any, and the
payment thereof is the sole responsibility of the Company.
6. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. The Securities are
redeemable for cash as a whole, at any time, or in part from time to time at the
option of the Company in accordance with the Indenture at the Redemption Prices
set forth below, provided that the Securities are not redeemable prior to
November 21, 2007.
A-2-7
The table below shows Redemption Prices of a Security per $1,000
Principal Amount at Maturity on the dates shown below and at Stated Maturity,
which prices reflect accrued Original Issue Discount calculated to each such
date. The Redemption Price of a Security redeemed between such dates shall
include an additional amount reflecting the additional Original Issue Discount
accrued since the preceding date in the table and until, but not including, the
Redemption Date.
(2) (3)
(1) ACCRUED REDEMPTION
LYON ORIGINAL PRICE
REDEMPTION DATE ISSUE PRICE ISSUE DISCOUNT (1)+(2)
November 21: ----------- -------------- ----------
2007....................... $860.87 $21.77 $882.64
2008....................... $860.87 $26.18 $887.05
2009....................... $860.87 $30.62 $891.49
2010....................... $860.87 $35.09 $895.96
2011....................... $860.87 $39.57 $900.44
2012....................... $860.87 $44.08 $904.95
2013....................... $860.87 $48.61 $909.48
2014....................... $860.87 $53.16 $914.03
2015....................... $860.87 $57.74 $918.61
2016....................... $860.87 $62.34 $923.21
2017....................... $860.87 $66.96 $927.83
2018....................... $860.87 $71.61 $932.48
2019....................... $860.87 $76.27 $937.14
2020....................... $860.87 $80.97 $941.84
2021....................... $860.87 $85.68 $946.55
2022....................... $860.87 $90.42 $951.29
2023....................... $860.87 $95.18 $956.05
2024....................... $860.87 $99.97 $960.84
2025....................... $860.87 $104.78 $965.65
2026....................... $860.87 $109.61 $970.48
2027....................... $860.87 $114.47 $975.34
2028....................... $860.87 $119.35 $980.22
2029....................... $860.87 $124.26 $985.13
2030....................... $860.87 $129.19 $990.06
2031....................... $860.87 $134.15 $995.02
At Stated Maturity......... $860.87 $139.13 $1,000.00
In addition to the Redemption Price payable with respect to all
Securities or portions thereof to be redeemed as of a Redemption Date, the
Holders of such Securities (or portions thereof) shall be entitled to receive
accrued and unpaid contingent interest, if any, with respect thereto, which
interest shall be paid in cash on the Redemption Date.
A-2-8
7. Purchase by the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Securities held
by such Holder on the following Purchase Dates and at the following Purchase
Prices per $1,000 Principal Amount at Maturity, upon delivery of a Purchase
Notice containing the information set forth in the Indenture, at any time from
the opening of business on the date that is 20 Business Days prior to such
Purchase Date until the close of business on the Business Day immediately
preceding such Purchase Date and upon delivery of the Securities to the Paying
Agent by the Holder as set forth in the Indenture.
Purchase Date Purchase Price
----------------- --------------
November 21, 2005 $873.86
November 21, 2007 882.64
November 21, 2012 904.95
November 21, 2017 927.83
November 21, 2022 951.29
November 21, 2027 975.34
The Company may, from time to time, declare additional Purchase Dates
and corresponding Purchase Prices.
The Purchase Price (equal to the Issue Price plus accrued Original
Issue Discount to the Purchase Date) may be paid, at the option of the Company,
in cash or by the issuance and delivery of shares of Common Stock of the
Company, or in any combination thereof.
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase the Securities
held by such Holder no later than 35 Business Days after the occurrence of a
Change in Control of the Company, but in no event prior to the date on which
such Change in Control occurs, on or prior to November 21, 2007 for a Change in
Control Purchase Price equal to the Issue Price plus accrued Original Issue
Discount to the Change in Control Purchase Date, which Change in Control
Purchase Price shall be paid in cash.
A third party may make the offer and purchase of the Securities in lieu
of the Company in accordance with the Indenture.
In addition to the Purchase Price or Change in Control Purchase Price,
as the case may be, payable with respect to all Securities or portions thereof
to be purchased as of the Purchase Date or the Change in Control Purchase Date,
as the case may be, the Holders of such Securities (or portions thereof) shall
be entitled to receive any accrued and unpaid contingent interest with respect
thereto, which shall be paid in cash promptly following the later of the
Purchase Date or the Change in Control Purchase Date, as the case may be and the
time of delivery of such Securities to the Paying Agent pursuant to the
Indenture.
A-2-9
Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture.
If cash (and/or securities if permitted under the Indenture) sufficient
to pay the Purchase Price or Change in Control Purchase Price, as the case may
be, of, together with any accrued and unpaid contingent interest with respect
to, all Securities or portions thereof to be purchased as of the Purchase Date
or the Change in Control Purchase Date, as the case may be, is deposited with
the Paying Agent on the Business Day following the Purchase Date or the Change
in Control Purchase Date, as the case may be, Original Issue Discount and any
contingent interest shall cease to accrue on such Securities (or portions
thereof) immediately after such Purchase Date or Change in Control Purchase
Date, as the case may be, and the Holder thereof shall have no other rights as
such (other than the right to receive the Purchase Price or Change in Control
Purchase Price, as the case may be, and any accrued and unpaid contingent
interest upon surrender of such Security).
8. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Securities to be redeemed
at the Holder's registered address. If money sufficient to pay the Redemption
Price of, and accrued and unpaid contingent interest, if any, with respect to,
all Securities (or portions thereof) to be redeemed on the Redemption Date is
deposited with the Paying Agent prior to or on the Redemption Date, on such
Redemption Date, Original Issue Discount and contingent interest, if any, shall
cease to accrue on such Securities or portions thereof. Securities in
denominations larger than $1,000 of Principal Amount at Maturity may be redeemed
in part but only in integral multiples of $1,000 of Principal Amount at
Maturity.
9. Conversion.
Subject to the provisions of this Paragraph 9, a Holder of a Security
may convert it into Common Stock of the Company at any time before the close of
business on November 20, 2032. If the Security is called for redemption, the
Holder may convert it only until the close of business on the second Business
Day immediately preceding the Redemption Date. A Security in respect of which a
Holder has delivered a Purchase Notice or Change in Control Purchase Notice
exercising the option of such Holder to require the Company to purchase such
Security may be converted only if such notice of exercise is withdrawn in
accordance with the terms of the Indenture.
The initial Conversion Rate is 4.7301 shares of Common Stock per $1,000
Principal Amount at Maturity, subject to adjustment in certain events described
in the Indenture. The Company will deliver cash or a check in lieu of any
fractional share of Common Stock.
(a) CONVERSION BASED ON COMMON STOCK PRICE. Subject to the
provisions of this Paragraph 9, Holders may convert the Securities into Common
Stock in any calendar quarter commencing after March 31, 2003, if, as of the
last day of the preceding calendar quarter, the Sale Price of the Common Stock
for at least 20 Trading Days in a period of 30 consecutive
A-2-10
Trading Days ending on the last Trading Day of such preceding calendar quarter
is more than 130% of the accreted conversion price per share of Common Stock on
the last day of such preceding calendar quarter.
The "accreted conversion price" per share of Common Stock as of any day
equals the quotient of:
o the Issue Price of a Security and Accrued Original Issue Discount
to that day, divided by
o the number of shares of Common Stock issuable upon conversion of
$1,000 Principal Amount at Maturity of Securities on that day.
(b) CONVERSION BASED ON CREDIT RATING DOWNGRADE. Subject to
the provisions of this Paragraph 9, Holders may convert the Securities into
Common Stock on a Conversion Date during any period in which the credit rating
assigned to the Securities by a Rating Agency is at or below the Applicable
Rating. "Rating Agency" means Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies Inc., and its successors ("Standard & Poor's"), or
Moody's Investors Service ("Moody's"), or if neither Standard & Poor's nor
Moody's are making ratings of the Securities publicly available, a nationally
recognized U.S. rating agency or agencies, as the case may be, selected by the
Company, which will be substituted for Standard & Poor's or Moody's, as the case
may be. "Applicable Rating" means, in the case of Standard & Poor's, BBB+, or in
the case of Moody's, Baa1 (or their respective equivalents under any successor
ratings categories of Standard & Poor's or Moody's), or the equivalent in
respect of ratings categories of any Rating Agencies substituted for Standard &
Poor's or Moody's.
(c) CONVERSION BASED ON REDEMPTION. Subject to the provisions
of this Paragraph 9, a Holder may convert into Common Stock a Security or
portion of a Security which has been called for redemption pursuant to Paragraph
6 hereof, even if the Securities are not otherwise convertible at such time, but
such Securities may be surrendered for conversion only until the close of
business on the second Business Day immediately preceding the Redemption Date.
(d) CONVERSION UPON OCCURRENCE OF CERTAIN CORPORATE
TRANSACTIONS. Subject to the provisions of this Paragraph 9, in the event the
Company is a party to a consolidation, merger or binding share exchange or a
transfer of all or substantially all assets of the Company pursuant to which the
Common Stock would be converted into cash, securities or other property as set
forth in Section 10.14 of the Indenture, the Securities may be surrendered for
conversion at any time from and after the date which is 15 days prior to the
anticipated effective date until 15 days after the actual effective date of such
transaction, and at the effective date of such transaction the right to convert
a Security into Common Stock will be deemed to have changed into a right to
convert it into the kind and amount of cash, securities or other assets of the
Company or another person which the holder would have received if the holder had
converted its Security immediately prior to the transaction.
A-2-11
A Holder's right to convert the Securities into Common Stock of the
Company is also subject to the Company's right to elect to pay such Holder the
amount of cash set forth in the next succeeding sentence (or an equivalent
amount in a combination of cash and shares of Common Stock), in lieu of
delivering all or part of such Common Stock; provided, however, that if such
payment of cash is not permitted pursuant to the provisions of the Indenture,
the Company shall deliver Common Stock (and cash in lieu of fractional shares of
Common Stock) in accordance with the Indenture, whether or not the Company has
delivered a notice pursuant to the Indenture to the effect that the Securities
will be paid in cash. The amount of cash to be paid for each $1,000 Principal
Amount at Maturity of Securities shall be equal to the average Sale Price of a
share of Common Stock of the Company for the five consecutive Trading Days
immediately following (i) the date of the Company's notice of its election to
deliver cash upon conversion, if the Company has not given a notice of
redemption pursuant to the Indenture, or (ii) the Conversion Date, in the case
of a conversion following such a notice of redemption specifying an intent to
deliver cash or a combination of cash and Common Stock upon conversion, in
either case multiplied by the Conversion Rate in effect on such Conversion Date.
If the Company shall elect to make such payment wholly in shares of Common
Stock, then such shares shall be delivered through the Conversion Agent to
Holders surrendering Securities as promptly as practicable but in any event no
later than the fifth Business Day following the Conversion Date. If, however,
the Company elects to make any portion of such payment in cash, then the
payment, including any delivery of shares of Common Stock, shall be made to
Holders surrendering Securities no later than the tenth Business Day following
the Conversion Date.
The Company may not pay cash in lieu of delivering all or part of such
share of Common Stock upon the conversion of any Securities pursuant to the
terms of the Indenture (other than cash in lieu of fractional shares) if there
has occurred (prior to, on or after, as the case may be, the Conversion Date or
the date on which the Company delivers its notice specifying whether each
Conversion shall be converted into shares of Common Stock or cash) and is
continuing an Event of Default (other than a default in such payment on such
Securities).
Accrued and unpaid contingent interest will not be paid in cash on
Securities that are converted but will be paid in the manner provided in the
following paragraph; provided, however that Securities surrendered for
conversion during the period from the close of business on any date on which
contingent interest accrues to the opening of business on the date on which such
contingent interest is payable, shall be entitled to receive such contingent
interest payable on such Securities on the corresponding Interest Payment Date
or the date on which such contingent interest is payable and (except Securities
with respect to which the Company has mailed a notice of redemption) Securities
surrendered for conversion during such periods must be accompanied by payment of
an amount equal to the contingent interest with respect thereto that the
registered Holder is to receive.
A Holder may convert a portion of a Security if the Principal Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. No payment
or adjustment will be made for dividends on the Common Stock except as provided
in the Indenture. On conversion of a Security, accrued Original Issue Discount
attributable to the period from the Issue Date through the Conversion Date,
accrued Tax OID and (except as provided above) accrued contingent interest with
respect to the converted Security shall not be cancelled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the Holder thereof
through the delivery of the
A-2-12
Common Stock (together with the cash payment, if any, in lieu of fractional
shares), or cash or a combination of cash and Common Stock in lieu thereof, in
exchange for the Security being converted pursuant to the terms hereof; and the
fair market value of such shares of Common Stock (together with any such cash
payment in lieu of fractional shares), or cash or a combination of cash and
Common Stock in lieu thereof, shall be treated as delivered, to the extent
thereof, first in exchange for Original Issue Discount and Tax OID accrued
through the Conversion Date and accrued contingent interest, and the balance, if
any, of such cash and/or the fair market value of such Common Stock (and any
such cash payment in lieu of fractional shares), or cash in lieu thereof, shall
be treated as delivered in exchange for the Issue Price of the Security being
converted pursuant to the provisions hereof.
The Company agrees, and each Holder and any beneficial owner of a
Security by its purchase thereof shall be deemed to agree, to treat, for United
States federal income tax purposes, the fair market value of the Common Stock
received upon the conversion of a Security (together with any cash payment in
lieu of fractional shares) or cash, or a combination of cash and Common Stock as
a contingent payment on the Security for purposes of Treasury Regulation Section
1.1275-4(b).
To convert a Security, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the
Security to the Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (4) pay any transfer or similar tax, if required.
The Conversion Rate will be adjusted for dividends or distributions on
Common Stock payable in Common Stock or other Capital Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock for a period
expiring within 60 days of the record date for such distribution at less than
the Sale Price of the Common Stock at the Time of Determination; and
distributions to such holders of assets (including shares of Capital Stock of a
Subsidiary) or debt securities of the Company or certain rights to purchase
securities of the Company (excluding certain cash dividends or distributions).
However, no adjustment need be made if Securityholders may participate in the
transaction or in certain other cases. The Company from time to time may
voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a
Security into Common Stock may be changed into a right to convert it into the
kind and amount of securities, cash or other assets of the Company or another
person which the Holder would have received if the Holder had converted its
Securities immediately prior to the transaction.
10. Conversion Arrangement on Call for Redemption.
Any Securities called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such Securities at an amount not less than the
Redemption Price, by one or more investment bankers
A-2-13
or other purchasers who may agree with the Company to purchase such Securities
from the Holders, to convert them into Common Stock of the Company and to make
payment for such Securities to the Trustee in trust for such Holders.
11. Defaulted Interest.
Except as otherwise specified with respect to the Securities, any
Defaulted Interest on any Security shall forthwith cease to be payable to the
registered Holder thereof on the relevant accrual date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company as provided
for in Section 11.02 of the Indenture.
12. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount at Maturity and integral multiples
of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Securities selected for redemption (except, in
the case of a Security to be redeemed in part, the portion of the Security not
to be redeemed) or any Securities in respect of which a Purchase Notice or
Change in Control Purchase Notice has been given and not withdrawn (except, in
the case of a Security to be purchased in part, the portion of the Security not
to be purchased) or any Securities for a period of 15 days before the mailing of
a notice of redemption of Securities to be redeemed.
13. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of
this Security for all purposes.
14. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property laws. After return to the Company,
Holders entitled to the money or securities must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another person.
15. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding and (ii) certain Defaults may be waived with
the written consent of the Holders of a majority in aggregate Principal Amount
at Maturity of the Securities at the time outstanding. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or
A-2-14
inconsistency, or to comply with Article 5 or Section 10.14 of the Indenture, to
secure the Company's obligations under this Security or to add to the Company's
covenants for the benefit of the Securityholders or to surrender any right or
power conferred, or to comply with any requirement of the SEC in connection with
the qualification of the Indenture under the Trust Indenture Act of 1939 and any
amendment thereof, or as necessary in connection with the registration of the
Securities under the Securities Act or to make any change that does not
adversely affect the rights of any Holders.
16. Defaults and Remedies.
Under the Indenture, Events of Default include (i) default in the
payment of contingent interest when the same becomes due and payable, which
default continues for 30 days; (ii) default in payment of the Principal Amount
at Maturity, Issue Price plus accrued Original Issue Discount, Redemption Price,
Purchase Price or Change in Control Purchase Price, as the case may be, in
respect of the Securities when the same becomes due and payable; (iii) failure
by the Company to comply with other agreements in the Indenture or the
Securities, subject to notice and lapse of time; (iv) the acceleration of Debt
in an amount in excess of $20,000,000 because of a default with respect to such
Debt without such Debt having been discharged or such acceleration having been
cured, waived, rescinded or annulled, subject to notice and lapse of time;
provided, however, that if any such failure or acceleration referred to above
shall cease or be cured, waived, rescinded or annulled, then the Event of
Default by reason thereof shall be deemed not to have occurred; and (v) certain
events of bankruptcy or insolvency. If an Event of Default occurs and is
continuing, the Trustee, or the Holders of at least 25% in aggregate Principal
Amount at Maturity of the Securities at the time outstanding, may declare the
Issue Price plus the Original Issue Discount through the date of such
declaration, and any accrued and unpaid interest (including contingent interest)
if any, through the date of such declaration, on all the Securities to be due
and payable immediately. Certain events of bankruptcy or insolvency are Events
of Default which will result in the Issue Price plus the Original Issue Discount
on the Securities, and any accrued and unpaid interest (including contingent
interest) if any, through the occurrence of such event, becoming due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security reasonably satisfactory
to it. Subject to certain limitations, Holders of a majority in aggregate
Principal Amount at Maturity of the Securities at the time outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default (except a Default
in payment of amounts specified in clause (i) or (ii) above) if it determines
that withholding notice is in their interests.
17. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
A-2-15
18. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
19. Authentication.
This Security shall not be valid until an authorized officer of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
20. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. Original Issue Discount Information Reporting Requirements.
In accordance with the United States Treasury Regulation Section
1.1275-3, a Holder may obtain the projected payment schedule by submitting a
written request for such information to the following representative of the
Company: Corporate Secretary, 3M Office of General Counsel, 3M Center, St. Paul,
MN 55133.
22. GOVERNING LAW.
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
---------------
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
3M Company
3M Office of General Counsel
3M Center
St. Paul, MN 55133
Telephone No.: [ ]
Facsimile No.: (651) 736-9469
A-2-16
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's soc. sec. or tax ID no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint
___________________________ agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check the box: [ ]
To convert only part of this Security, state the Principal Amount at Maturity to
be converted (which must be $1,000 or an integral multiple of $1,000):
$______________
If you want the stock certificate made out in another person's name, fill in the
form below:
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's soc. sec. or tax ID no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
___________________________________________________________________________Date:
________________________________Your Signature:_________________________________
________________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
A-2-17
EXHIBIT B-1
3M COMPANY
Liquid Yield Option Notes due 2032
(Zero Coupon - Senior)
Transfer Certificate
In connection with any transfer of any of the Securities within the
period prior to the expiration of the holding period applicable to the sales
thereof under Rule 144(k) under the Securities Act of 1933, as amended (the
"Securities Act") (or any successor provision), the undersigned registered owner
of this Security hereby certifies with respect to $__________ Principal Amount
at Maturity of the above-captioned securities presented or surrendered on the
date hereof (the "Surrendered Securities") for registration of transfer, or for
exchange where the securities deliverable upon such exchange are to be
registered in a name other than that of the undersigned registered owner (each
such transaction being a "transfer"), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Securities for the
reason checked below:
[_] A transfer of the Surrendered Securities is made to the
Company or any subsidiaries; or
[_] The transfer of the Surrendered Securities complies with Rule
144A under the U.S. Securities Act of 1933, as amended (the
"Securities Act"); or
[_] The transfer of the Surrendered Securities is to an
institutional accredited investor, as described in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to an
effective registration statement under the Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to an
offshore transaction in accordance with Rule 904 of Regulation
S under the Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to
another available exemption from the registration requirement
of the Securities Act.
and unless the box below is checked, the undersigned confirms that, to
the undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").
[_] The transferee is an Affiliate of the Company.
DATE:_________________________ _________________________________
Signature(s)
B-1-1
(If the registered owner is a corporation, partnership or
fiduciary, the title of the Person signing on behalf of
such registered owner must be stated.)
B-1-2
EXHIBIT B-2
3M COMPANY
Liquid Yield Option Notes due 2032
(Zero Coupon - Senior)
Form of Letter to be Delivered by Accredited Investors
3M Company
3M Center
St. Paul, MN 55133 Telephone No.:
Facsimile No.: (651) 736-9469
Attention: Corporate Secretary
Citibank, N.A.
111 Wall Street
14th Floor, Zone 3
New York, New York 10043
Facsimile No.: (212) 657-4009
Attention: Citibank Agency and Trust
Ladies and Gentlemen:
We are delivering this letter in connection with the proposed transfer
of beneficial interests in an amount equal to $__________ Principal Amount at
Maturity of the Liquid Yield Option Notes due November 21, 2032 ("LYONs") of 3M
Company (the "Company"), a Delaware corporation, which are convertible into
shares of the Common Stock, $.01 par value per share (the "Common Stock"), of
the Company.
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act") (an "Institutional Accredited Investor");
(ii) the purchase of beneficial interests in LYONs by us is
for our own account or for the account of one or more other
Institutional Accredited Investors or as fiduciary for the account of
one or more trusts, each of which is an "accredited investor" within
the meaning of Rule 501(a)(7) under the Securities Act and for each of
which we exercise sole investment discretion, or (B) we are a "bank,"
within the meaning of Section 3(a)(2) of the Securities Act, or a
"savings and loan association" or other institution described in
Section 3(a)(5)(A) of the Securities Act that is acquiring beneficial
interests in LYONs as fiduciary for the account of one or more
institutions for which we exercise sole investment discretion;
B-2-1
(iii) we will acquire beneficial interests in LYONs having a
minimum principal amount at maturity of not less than $250,000 for our
own account or for any separate account for which we are acting;
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks
of purchasing beneficial interests in LYONs;
(v) on each day from the date on which we acquire the
beneficial interests in LYONs through and including the date on which
we dispose of our beneficial interests in such LYONs or the LYONs are
exchanged for the Common Stock, either: (i) we are not (A) an "employee
benefit plan" subject to the fiduciary responsibility provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
(B) a "plan" subject to Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"), (C) an entity whose underlying assets
include the assets of any such employee benefit plan or plan by reason
of Department of Labor Regulation Section 2510.3-101 or otherwise, or
(D) a governmental plan that is subject to any federal, state or local
law which is substantially similar to the provisions of Section 406 of
ERISA or Section 4975 of the Code, or (ii) our acquisition, holding and
subsequent disposition of LYONs or interest therein will not result in
a prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code (or, in the case of a governmental plan, any substantially
similar federal, state or local law) for which an exemption is not
available, all the conditions of which are satisfied; and
(vi) we are not acquiring beneficial interests in LYONs with a
view to distribution thereof or with any present intention of offering
or selling beneficial interests in LYONs or the Common Stock
deliverable upon exchange thereof, except as permitted below; provided
that the disposition of our property and property of any accounts for
which we are acting as fiduciary shall remain at all times within our
control.
We understand that the LYONs were originally offered and sold in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the LYONs and the shares of Common
Stock (the "Securities") deliverable upon exchange thereof have not been
registered under the Securities Act, and we agree, on our own behalf and on
behalf of each account for which we acquire any beneficial interests in LYONs,
that if in the future we decide to resell or otherwise transfer such Securities
prior to the Resale Restriction Termination Date (as defined below), such
Securities may be resold or otherwise transferred only (i) to the Company or any
Subsidiary thereof, (ii) for as long as the LYONs are eligible for resale
pursuant to Rule 144A under the Securities Act ("Rule 144A"), to a person it
reasonably believes is a "qualified institutional buyer" (as defined in Rule
144A) that purchases for its own account or for the account of a qualified
institutional buyer to which notice is given that the transfer is being made in
reliance on Rule 144A, (iii) to an Institutional Accredited Investor that is
acquiring the Security for its own account, or for the account of such
Institutional Accredited Investor for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution in violation of
the Securities Act, (iv) pursuant to another available exemption from
registration under the Securities Act (if applicable) or (v) pursuant to a
registration statement which has been declared effective under the Securities
Act and, in each
B-2-2
case, in accordance with any applicable securities laws of any State of the
United States or any other applicable jurisdiction and in accordance with the
legends set forth on the Securities. We further agree to provide any person
purchasing any of the Securities other than pursuant to clause (v) above from us
a notice advising such purchaser that resales of such securities are restricted
as stated herein. We understand that the trustee or the transfer agent, as the
case may be, for the Securities will not be required to accept for registration
of transfer any Securities pursuant to (iii) or (iv) above except upon
presentation of evidence satisfactory to the Company that the foregoing
restrictions on transfer have been complied with. We further understand that the
global security representing the Securities will bear a legend reflecting the
substance of this paragraph until the Resale Restriction Termination Date other
than certificates representing Securities transferred pursuant to clause (v)
above. As used herein, "Resale Restriction Termination Date" means (a) with
respect to any LYONs, the date that is two years after the later of the date of
the original issuance of the LYONs and the last date on which the Company or any
affiliate of the Company was the owner of such LYONs and (b) with respect to
Common Stock delivered upon exchange of a LYON, the date that is two years after
the later of the date on which such shares were so delivered upon exchange and
the last date on which the Company or any affiliate of the Company was the owner
of such shares of Common Stock. We understand that we may not, directly or
indirectly, engage in any hedging transaction with regard to the LYONs except as
permitted by the Securities Act.
We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
_____________________________________
(Name of Purchaser)
By:__________________________________
Name:
Title:
Address:
B-2-3
[ANNEX C]
Projected Payment Schedule*
Comparable Yield = 4.55%, compounded semiannually
QUARTERLY PERIOD ENDING PROJECTED PAYMENT PER LYON
----------------------- --------------------------
Thursday, December 12, 2002 -
Wednesday, March 12, 2003 -
Thursday, June 12, 2003 -
Friday, September 12, 2003 -
Friday, December 12, 2003 -
Friday, March 12, 2004 -
Friday, June 11, 2004 -
Monday, September 13, 2004 -
Monday, December 13, 2004 -
Friday, March 11, 2005 -
Monday, June 13, 2005 -
Monday, September 12, 2005 -
Monday, December 12, 2005 -
Monday, March 13, 2006 -
Monday, June 12, 2006 -
Tuesday, September 12, 2006 -
Tuesday, December 12, 2006 -
Monday, March 12, 2007 -
Tuesday, June 12, 2007 -
Wednesday, September 12, 2007 -
Wednesday, December 12, 2007 -
Wednesday, March 12, 2008 -
Thursday, June 12, 2008 -
Friday, September 12, 2008 -
Friday, December 12, 2008 -
Thursday, March 12, 2009 -
Friday, June 12, 2009 -
Friday, September 11, 2009 -
Friday, December 11, 2009 -
- ---------------------------
* The comparable yield means the annual yield the Company would pay, as of the
Issue Date, on a noncontingent, nonconvertible, fixed-rate debt security with
terms and conditions otherwise comparable to those of the Securities. The
schedule of projected payments has been determined on the basis of an assumption
of linear growth of the stock price and a constant dividend yield and has not
been determined for any purpose other than for the determination of interest
accruals and adjustments thereof in respect of the Securities for United States
federal income tax purposes. The comparable yield and the schedule of projected
payments do not constitute a projection or representation regarding the amounts
payable on the Securities.
-1-
QUARTERLY PERIOD ENDING PROJECTED PAYMENT PER LYON
----------------------- --------------------------
Friday, March 12, 2010 -
Friday, June 11, 2010 -
Monday, September 13, 2010 -
Monday, December 13, 2010 -
Friday, March 11, 2011 -
Monday, June 13, 2011 -
Monday, September 12, 2011 -
Monday, December 12, 2011 -
Monday, March 12, 2012 -
Tuesday, June 12, 2012 -
Wednesday, September 12, 2012 -
Wednesday, December 12, 2012 -
Tuesday, March 12, 2013 -
Wednesday, June 12, 2013 -
Thursday, September 12, 2013 -
Thursday, December 12, 2013 -
Wednesday, March 12, 2014 -
Thursday, June 12, 2014 -
Friday, September 12, 2014 -
Friday, December 12, 2014 -
Thursday, March 12, 2015 -
Friday, June 12, 2015 -
Friday, September 11, 2015 -
Friday, December 11, 2015 -
Friday, March 11, 2016 -
Monday, June 13, 2016 -
Monday, September 12, 2016 -
Monday, December 12, 2016 -
Monday, March 13, 2017 -
Monday, June 12, 2017 5.99
Tuesday, September 12, 2017 5.99
Tuesday, December 12, 2017 5.99
Monday, March 12, 2018 6.29
Tuesday, June 12, 2018 6.29
Wednesday, September 12, 2018 6.29
Wednesday, December 12, 2018 6.29
Tuesday, March 12, 2019 6.59
Wednesday, June 12, 2019 6.59
Thursday, September 12, 2019 6.59
Thursday, December 12, 2019 6.59
Thursday, March 12, 2020 6.91
Friday, June 12, 2020 6.91
Friday, September 11, 2020 6.91
Friday, December 11, 2020 6.91
Friday, March 12, 2021 7.25
-2-
QUARTERLY PERIOD ENDING PROJECTED PAYMENT PER LYON
----------------------- --------------------------
Friday, June 11, 2021 7.25
Monday, September 13, 2021 7.25
Monday, December 13, 2021 7.25
Friday, March 11, 2022 7.61
Monday, June 13, 2022 7.61
Monday, September 12, 2022 7.61
Monday, December 12, 2022 7.61
Monday, March 13, 2023 7.98
Monday, June 12, 2023 7.98
Tuesday, September 12, 2023 7.98
Tuesday, December 12, 2023 7.98
Tuesday, March 12, 2024 8.37
Wednesday, June 12, 2024 8.37
Thursday, September 12, 2024 8.37
Thursday, December 12, 2024 8.37
Wednesday, March 12, 2025 8.77
Thursday, June 12, 2025 8.77
Friday, September 12, 2025 8.77
Friday, December 12, 2025 8.77
Thursday, March 12, 2026 9.20
Friday, June 12, 2026 9.20
Friday, September 11, 2026 9.20
Friday, December 11, 2026 9.20
Friday, March 12, 2027 9.65
Friday, June 11, 2027 9.65
Monday, September 13, 2027 9.65
Monday, December 13, 2027 9.65
Monday, March 13, 2028 10.12
Monday, June 12, 2028 10.12
Tuesday, September 12, 2028 10.12
Tuesday, December 12, 2028 10.12
Monday, March 12, 2029 10.62
Tuesday, June 12, 2029 10.62
Wednesday, September 12, 2029 10.62
Wednesday, December 12, 2029 10.62
Tuesday, March 12, 2030 11.13
Wednesday, June 12, 2030 11.13
Thursday, September 12, 2030 11.13
Thursday, December 12, 2030 11.13
Wednesday, March 12, 2031 11.68
Thursday, June 12, 2031 11.68
Friday, September 12, 2031 11.68
Friday, December 12, 2031 11.68
Friday, March 12, 2032 12.25
Friday, June 11, 2032 12.25
Monday, September 13, 2032 12.25
Monday, November 22, 2032 2,567.97